2021’s biggest cryptocurrencies: Here’s how much money you could have made

Short-term volatility is common in the cryptocurrency market. While that does translate to higher risk versus other investment instruments, there’s also plenty of upside potential. The past year, for instance, saw the cryptocurrency market’s total valuation briefly top $3 trillion for the first time. While this impressive growth was sometimes offset by slowdowns and even major dips, most tokens are still trading higher than they were only a few short months ago.

With the year now coming to an end, here’s a retrospective look at the performance of the 15 largest cryptocurrencies by market capitalization — sorted from the highest returns to the lowest, as of December 30. We’ve also visualized just how far a hypothetical $1,000 investment in each cryptocurrency at the start of the year would’ve gone over the course of 2021. Of course, we left out any stablecoins since they can’t be held as an investment.

See also: The best cryptocurrency apps for Android Shiba Inu (SHIB)

Year-to-date return: ~ 86,570%

$1,000 invested at the start of 2021 would be worth ~ $866,700

Shiba Inu skyrocketed in 2021 thanks to an influx of new retail investors and heightened speculation. It’s hard to estimate SHIB’s exact year-to-date returns because the token appeared out of nowhere in February of this year. Assuming January 31 as the starting point, though, estimates peg SHIB’s total 2021 gains at just over 86,500%.

That said, Shiba Inu was also the most volatile cryptocurrency this year, with its total market capitalization routinely swinging billions of dollars in either direction, depending on market sentiment. If you perfectly timed your entry and exit points, it could have outperformed all of the other tokens on this list. Practically speaking, however, it continues to be one of the riskiest investments in the cryptocurrency market, which by itself is already very volatile. Polygon (MATIC)

Year-to-date return: ~ 14,000%

$1,000 invested at the start of 2021 would be worth ~ $141,000

Polygon is one of the most popular Ethereum scaling solutions. It aims to alleviate long-standing usability issues such as high fees and network congestion by offering “side chains” that run alongside the primary Ethereum blockchain. In other words, it’s a second layer scaling solution that’s faster and cheaper to transact with than the base Ethereum layer.

Polygon’s primary chain operates on the Proof of Stake consensus mechanism, which allows it to operate far more efficiently than Ethereum. Even better, developers can easily transition their decentralized applications to Polygon. Today, most popular Ethereum apps are already available on the Polygon network, including Aave and SushiSwap. A bridge also exists for users to “port” their existing Ethereum-based assets and tokens over to the Polygon ecosystem. Terra (LUNA)

Year-to-date return: ~ 12,940%

$1,000 invested at the start of 2021 would be worth ~ $130,400 today

Terra is a decentralized stablecoin project that aims to upend existing private solutions like Tether (USDT) and USD Coin (USDC). Instead of cash reserves, it achieves its peg and price stability through two distinct token types — Terra and Luna (LUNA). Terra is the stablecoin, while Luna is used to manage supply and prevent price fluctuations. How does it work? Here’s how the developers explain it: “Imagine the whole Terra economy as two pools: one for Terra and one for Luna. To maintain the price of Terra, the Luna supply pool adds to or subtracts from Terra’s supply. Users burn Luna to mint Terra and burn Terra to mint Luna.” In theory, users are incentivized to hold Luna because its supply should contract over time as demand for Terra increases. Solana (SOL)

Year-to-date return: ~ 11,720%

$1,000 invested at the start of 2021 would be worth ~ $118,200

Solana is an Ethereum competitor that promises better scalability — lower fees and faster settlement times. Solana’s value exploded in 2021, thanks to the development team’s keen focus on building an expansive ecosystem of decentralized applications and NFT marketplaces. These advantages over Ethereum have allowed Solana to gain market share in the decentralized finance (DeFi) and non-fungible token (NFT) ecosystems.

Unfortunately, Solana was also the subject of major controversies in 2021. In September, the network went offline for several hours — a phenomenon pretty much unheard of in the decentralized cryptocurrency ecosystem. While Solana can process transactions much faster than some of its rivals, including Ethereum, it has yet to prove that it can stand the test of time. Dogecoin (DOGE)

Year-to-date return: ~ 3,600% $1,000 invested at the start of 2021 would be […]

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