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The returns of the main cryptocurrencies in 2021

2021 has seen crypto markets explode and mature, with different sectors flourishing and vastly outperforming the market leader, bitcoin.

While bitcoin only managed to return 59.8% last year, the total market capitalization of the crypto sector grew by 187.5%, with many of the top coins offering four-percentage returns, even five digits.

2021 Crypto Market Overview

Last year was not only an exceptional year for crypto in terms of returns, but also the growing maturity of infrastructure and the resulting decorrelation of industries and individual crypto coins.

Crypto’s infrastructure has grown tremendously and now there are many other on-ramps for people to buy altcoins that don’t require buying and using bitcoins in the process. As a result, many cryptocurrency prices were dictated more by the value and functionality of their protocol and applications than their correlation to bitcoin.

Cryptocurrency Category Returns 2021
Bitcoin Cryptocurrency 59.8%
Ethereum Smart contract platform 399.2%
Binance Coin Exchange token 1,268.9%
Solana Smart contract platform 11,177.8%
gimbal Smart contract platform 621.3%
XRP Cryptocurrency 277.8%
Earth Smart contract platform 12,967.3%
avalanche Smart contract platform 3,334.8%
Peas Smart contract platform 187.9%
Dogecoin Meme Coin 3,546.0%

Sources: TradingView, Binance, Uniswap, FTX, Bittrex

Bitcoin wasn’t the only cryptocurrency that failed to achieve triple-digit returns in 2021. Litecoin and Bitcoin Cash also provided meager double-digit return percentages as cryptocurrencies focused on the payment were largely ignored for projects with smart contract capabilities.

Other older projects like Stellar Lumens (109%) and XRP (278%) provided triple-digit returns, with Cardano (621%) being the best performer of the old guard despite failing to shipping its smart contract functionality last year.

The Rise of Ethereum Competitors

Ethereum has easily overtaken bitcoin in 2021, returning 399.2% as the boom in popularity of NFTs and the creation of DeFi 2.0 protocols like Olympus (OHM) have expanded possible use cases.

But with the surge in network activity, a 50% increase in transfers in 2021, Ethereum gas fees have surged. From a low of $20 for a single trade to NFT prices starting at around $40 and reaching into the hundreds on days of network congestion, the crowd of crypto retailers have migrated to other contract platforms smart with lower fees.

Alternative budding smart contract platforms like Solana (11,178%), Avalanche (3,335%), and Fantom (13,207%) all had 4-5 digit percentage returns as these protocols built their own decentralized financial ecosystems and NFT markets.

With Ethereum set to merge with the beacon chain this year, which uses proof-of-stake instead of proof-of-work, we’ll see if 2022 sees gas fees drop and retail return to Ethereum if the merger is successful.

Dog Coins Meme their way to the top

While many new cryptocurrencies with powerful features and unique use cases have been rewarded with strong returns, it was memes that generated the biggest cryptocurrency returns last year.

Dogecoin’s surge after Elon Musk’s “adoption” saw many other dog coins follow, with SHIB benefiting the most and returning an incredible 19.85 million percent.

But since Dogecoin surged from $0.07 to a high of $0.74 in the second quarter of last year, the price of the original meme coin has slowly declined -77% to $0.17 at the time of writing. After last year’s rollercoaster ride, 2022 has started with a positive catalyst for Dogecoin holders, as Elon Musk announced that DOGE can be used to purchase Tesla merchandise.

Crypto industry gamification

The intersection between crypto, gaming, and the metaverse has become more than just a pipe dream in 2021. Axie Infinity was the first native crypto game to successfully establish a gaming structure to win that combines its native token (AXS) and in-game NFTs, becoming a sensation and source of income for many in the Philippines.

Other crypto gaming projects like Defi Kingdoms put recognizable gaming interfaces on decentralized financial applications, with the decentralized exchange becoming the “marketplace” of the city and the yield farms being the “gardens” where the yield is harvested. This fantastical aesthetic is more than just a fresh coat of paint, as the project with $1.04 billion in total value locked develops an underlying game of play to win.

Along with gamification, 2021 has seen both crypto-native and non-crypto developers place particular emphasis on the digital worlds or metaverses that users will inhabit. Facebook’s renaming to Meta drove two top metaverse projects The Sandbox (SAND) and Decentraland (MANA) up another few hundred percent to end the year at 16,261% and 4,104% yields respectively.

With so many eyes on the crypto sector after the breakout year of 2021, we will see how developing US regulations and changing macro conditions will affect cryptocurrencies in 2022.

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