The 10 Best Performing Cryptocurrencies of 2021

These 10 cryptocurrencies climbed more than 400% in 2021.

As 2021 comes to a close, one of the biggest defining features of the year is the explosion of cryptocurrencies and their growing acceptance in the mainstream world. Bitcoin broke $68,000, and the first exchange-traded funds emerged to give investors exposure to it. Non-fungible tokens of bored apes sold for astounding amounts, and decentralized autonomous organizations popped up. All that is not to mention the explosion of whimsical pet-related coins. All in all, the total crypto market capitalization grew from $750 billion to more than $3 trillion in November and stood at $2.24 trillion on Dec. 16. A list of the best performing cryptocurrencies by percentage gain would include many that were valued at a fraction of a cent on Jan. 1, 2021, so we narrowed it down to the 10 best performing cryptocurrencies that had a market cap of more than $10 billion as of Dec. 16.

Ethereum (ETH)

Coming in at number 10 is the largest cryptocurrency by market cap on this list by a long shot. Ethereum is a distributed blockchain computing platform that was created as an alternative to Bitcoin that had utility, not just value, and included a scripting language for applications on the Ethereum network. The more than 300% increase in the size of the decentralized finance market in 2021, along with the the rise of non-fungible tokens and other decentralized applications, or dApps, pushed Ethereum to make plans to switch from proof-of-work (PoW) validation, where mining computers ensure the integrity of the crypto, to the more energy efficient proof-of-stake (PoS) model, where owners put up their tokens as collateral to validate the blockchain data. Ethereum 2.0, which refers to its shift to PoS, is scheduled to happen sometime in the first half of 2022, though there have been delays. As the platform with by far the largest number of dApps — nearly nine times as many as the second-place contender, according to State of the dApps — Ethereum justified its meteoric rise in 2021.

Cardano (ADA)

The Cardano platform is similar to Ethereum in that it is an open-source blockchain, and it is so far the largest cryptocurrency using the proof-of-stake model. It saw its largest increase in August before a policy change that allows smart contracts using the Plutus smart contract language and financial contracts using the Marlowe language, designed for nonprogrammers in the financial sector. Since its peak in early September, the price of the ADA token dropped by more than half, and it is trading around the range it stayed in between February and July 2021.

Crypto.com Chain (CRO)

The CRO token is the native token to the Crypto.com chain operated by the cryptocurrency exchange of the same name. The blockchain is used to build projects and develop ways for merchants and financial institutions to accept crypto. It is partnering with Visa Inc. (ticker: V) on a prepaid card that requires holders to stake CRO tokens for 180 days to apply. The token started its sharpest rise in November when it purchased the naming rights to the Staples Center in Los Angeles for $700 million, renaming it the Crypto.com Arena for 20 years. Several other sponsorship deals with the UFC, Formula One and Philadelphia 76ers, as well as signing on Matt Damon as a brand ambassador, helped bring the token to new heights in late November before it came back down.

Binance Coin (BNB)

Though BNB is similar to CRO in that they are both connected to crypto exchanges, the Binance Exchange is far and away the largest and most liquid. The Binance Coin has expanded its uses to include payments for transaction fees, travel arrangements and financial services, including investing in stocks and exchange-traded funds. The Binance Smart Chain (BSC) — separate but parallel to the Binance Chain — was built to give more capabilities to developers and opened up the option for smart contracts. BNB has seen more steady growth in 2021 than other tokens, but its largest growth was in March and April. In May, the token lost half of its value in two weeks following an announcement by the Justice Department and IRS of an investigation into possible money laundering.

Shiba Inu (SHIB)

Though it is named after the same breed of dog used as a mascot for Dogecoin, has been dubbed the “Dogecoin killer” and has followed a similar memelike trajectory over the year, the Shiba Inu Coin is different in that it has utility. What is that utility? Good question. The crypto was created on the Ethereum blockchain and has its own native decentralized exchange with the usual offerings: token swapping using the SHIB token, governance using the BONE token and staking using the LEASH token, as well as Shiba Inu nonfungible tokens called Shiboshis. However, in its initial white paper, charmingly called a “woof paper,” its pseudonymous creator Ryoshi left the coin’s purpose entirely up to its users, calling it an “experiment in decentralized spontaneous community building.”

Avalanche (AVAX)

“Like Ethereum, but faster” has been the pitch for Avalanche, which promises faster smart contracts and boasts the most validators of any PoS protocol. Proponents have touted its ability to scale while remaining secure and decentralized as the reason for its increased adoption. Those same traits are what led Deloitte to partner with Ava Labs, the team developing the Avalanche blockchain, to use Avalanche as a way for local and state governments in disaster areas to quickly demonstrate their eligibility for funds from the Federal Emergency Management Agency. Its consensus protocol, which verifies the transactions, is considered a hybrid of old and new consensus protocols and is spread across three blockchains built for specific tasks.

Dogecoin (DOGE)

Dogecoin is similar to many other currencies around the world in that it is backed by belief. But instead of belief in an issuing nation’s ability to cover its liabilities, here there’s belief in the potential of a compelling meme, which DOGE’s 1,000% run from mid-April to mid-May proved is no empty belief. There’s also a belief in the potential of Tesla Inc. (TSLA) CEO Elon Musk, who has repeatedly promoted the altcoin on Twitter and dubbed himself “The Dogefather” for it. On Dec. 14, Musk tweeted that Tesla would allow customers to purchase merchandise with Dogecoin, and it rocketed over 35% in a few hours. While traditional investors may criticize meme stocks and cryptocurrencies as “pump and dump” schemes — and they are wildly volatile — fellow meme investments AMC Entertainment Holdings Inc. (AMC) and GameStop Corp. (GME) also remain far above the price where they traded to begin the year.

Solana (SOL)

Solana has held its gains better than other cryptocurrencies after more than quadrupling between August and September, then pulling back slightly after “intermittent instability” issues on the blockchain and then recovering to run again in November. Similar to Avalanche, Solana also has been dubbed the “Ethereum killer,” uses PoS, has faster transactions and has lower fees. All of these smart contract platforms allow applications to be built on their network, but while Ethereum uses PoW to gain consensus on transactions, Solana uses a mix of PoS and an innovation called proof-of-history (PoH), which is described as a cryptographic timestamp that removes the need for validators to verify the timestamps on each transaction. The protocol solves a key delay in other systems — and investors have piled in.

Terra (LUNA)

Terra is at its heart a way to create stablecoins — cryptos whose value is tied to a tangible asset — for different currencies. There is a stablecoin pegged to the U.S. dollar, Korean won and euro, to name a few. The purpose of the project is to facilitate the mass adoption of cryptocurrencies, and it is backed by several Asian e-commerce companies, including Chai, whose CEO is also the co-founder of Terra. It achieves price stability by trading its Luna token back and forth with the stablecoins, reducing or adding to their supply to achieve the price target.

Polygon (MATIC)

Polygon makes the top of the list of the best performing cryptocurrencies in 2021 for several reasons, with one being that it started the year valued at less than 2 cents and eclipsed $2 in May, then regained the $2 level again in October and December. It achieved that by directly addressing Ethereum’s overused and clogged blockchain by acting as an add-on layer that will scale as user activity increases. It’s been alternatively described as “Ethereum’s internet of blockchains” and “a Swiss Army knife for scaling solutions” and can connect Ethereum-compatible blockchains.

10 best performing cryptocurrencies of 2021

— Ethereum (ETH)

— Cardano (ADA)

— Crypto.com Chain (CRO)

— Binance (BNB)

— Shiba Inu (SHIB)

— Avalanche (AVAX)

— Dogecoin (DOGE)

— Solana (SOL)

— Terra (LUNA)

— Polygon (MATIC)

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