2021 is done, and we can check the performance of top cryptocurrencies compared with the main coin for the past year. I promised to build this leaderboard in my earlier post where I compared fiat currencies with gold.
The crypto universe repeatedly extends as new coins and tokens appear in the arena one by one. I put the top ten largest cryptocurrencies by the market cap against Bitcoin in this post. I skipped stablecoins and Shiba Inu coin as the latter has less than one year of history.
It was a good year for Bitcoin, gaining almost 60% against the U.S. dollar in 2021. However, in its own digital universe, it was the loser to all top cryptocurrencies, as you can see in the comparison above.
Let's check the top three leaders.
The champion of 2021 is the MATIC token, which has gained a fabulous 8,854%. This is a native coin of the Polygon platform, which represents the layer 2 scaling solution for the Ethereum blockchain. It offers quicker and cheaper transactions to the prominent but relatively slow and expensive Ethereum ecosystem. Therefore, it is exploding in popularity and price, especially compared to Ethereum itself.
Two things are worth noting here about Polygon. Firstly, we see that investors preferred scaling solutions for already established blockchains like Ethereum to the new layer 1 platforms. It could change once the newbies prove to be viable, overcoming existing limitations of matured blockchains and addressing environmental issues.
Secondly, this platform survived through a dangerous vulnerability situation that occurred last December when roughly 92% of the network was in danger. 801,601 MATIC (circa $2 million at the time) were stolen from the network before it was fixed. The Polygon foundation has since resolved to "bear the cost of the theft." The team swiftly fixed the problem within 2 days. MATIC's price rode a roller coaster those days falling from $2.4 to $1.55 (-35%) and bouncing back to $2.2 (+42%). Scary volatility! Despite the existential crisis, the price established the new all-time high later the same month at $2.923 amid the strong belief of investors.
The #2 spot is the LUNA coin of Terra blockchain that booked a huge profit of 8,087% in 2021. It is noteworthy that this protocol uses fiat-pegged stablecoins (U.S. dollar, South Korean won, Mongolian tugrik, and the International Monetary Fund's Special Drawing Rights basket of currencies) to power price-stable global payment systems.
At the end of December, the crucial milestone had been achieved, as Terra became the second-largest DeFi network after Ethereum with $18 billion worth of assets locked. This was the main driver of a huge organic demand for its LUNA token.
The Solana, aka "Ethereum killer," ranked #3 with a sweet +6,962% gain in 2021 against Bitcoin. It was the third crypto added to the Bloomberg Terminal after titans of the market Bitcoin and Ethereum. Besides that, the world's biggest digital currency asset manager, Grayscale Investments, has added Solana to its portfolio last year. Another outstanding result has been achieved at the end of last year when the count of monthly active users of Solana's Phantom wallet passed 1.8 million after nine months since the start.
Officially launched in March 2020, this "new kid on the block" was quick to break into the top market cap list at #4 (excluding Tether).
The full ranking for Y2021 follows:
1. Polygon (MATIC) +8,854%
2. Terra (LUNA) +8,087%
3. Solana (SOL) +6,962%
4. Dogecoin (DOGE) +2,071%
5. Avalanche (AVAX) +2,054%
6. Binance Coin (BNB) +757%
7. Cardano (ADA) +351%
8. Ethereum (ETH) +212%
9. Ripple (XRP) +136%
10. Polkadot (DOT) +80%
Please comment on your choices and spot uncovered options to expand our horizons on the Blog.
I wish a profitable year ahead to all of you!
INO.com Contributor, Metals
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.