For those who are still waiting for altcoins to pop, CoinMarketCap Academy has put together a list of the most interesting and best-performing altcoins in 2021.
Meme coins on late-night television, a billionaire shilling dog money, another billionaire telling the doubters to f*** off, anons starting a currency and trillion-dollar companies getting in the business of building virtual land. If you missed altseason or still think it did not happen yet, strap in for a few tales of eye-watering gains.
“Wen altseason” is the rallying cry of crypto influencers and those under their spell. Hoping to discover the next Bitcoin, they’re convinced (or in the business of convincing others) that only one good altcoin is enough to make it.
Newsflash: altseason has already happened and you missed it.
Don’t believe it? Ethereum is up over 500% in the last year.
For those who are still waiting for altcoins to pop, CoinMarketCap Academy has put together a list of the most interesting and best-performing altcoins in 2021.
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Shiba Inu (SHIB)
You can’t say altcoin and not say dogcoin. These two go together like beers and burgers, America and freedom or Elon Musk and Twitter. We’ll get to the last one in a minute, but the true breakout performance of this altseason has not been Elon’s favorite dogcoin, but Shiba Inu.
Started as a copycat of Dogecoin, Shiba planned to ride its coattails following a price explosion by the original dog coin in early 2021. SHIB surged to a May high of 0.0039 cents (yes, that’s cents, not dollars), but the wider market correction in the spring seemed to put an end to its already then mind-boggling run.
And to add insult to injury, Shiba’s burn strategy did not go quite as planned.
Gifting half of its supply to Ethereum co-founder Vitalik Buterin, the meme coin’s gutsy “burn strategy” was more an attempt to leverage Buterin’s enormous popularity.
It turns out no one told Vitalik about this new way of token burns, as he proceeded to donate his share of SHIB supply (worth well over eight figures back then) to a charity foundation. The price of SHIB bombed as a result — and with Dogecoin cooling down as wel, it seemed as if the dogcoin mania was over.
However, Shiba Inu came to an agreement with the charity foundation to hold onto its supply, and the memecoin never looked back from there. The community started focusing on building a DEX in the form of Shibaswap and adding real utility to its former joke currency.
After rumors of Robinhood considering adding SHIB to its app started spreading, SHIB went on yet another eye-popping run, stopping just short of 0.01 cents in early November. Although the price has retreated sharply since, the one-year return of SHIB is no less than 32 million percent. Most amazingly, SHIB minted a dollar billionaire at the peak of its run, with one wallet having caught all of the upside in this year’s historic run:
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Dogecoin (DOGE)
In for a SHIB, in for a DOGE. The OG dogcoin started the meme coin mania at the beginning of 2021, kicking off an avalanche of copycats, animal-themed coins (mostly dogs, though), and straight-up scamcoins that tried to cash in on Doge’s ascendence to internet popularity.
(Fun fact: Dogecoin has been around longer than Ethereum.)
Although its yearly return of 3,500% pales compared to Shiba Inu and some of the other altcoins still to follow, we shouldn’t forget that the price traded five times higher at the height of the Doge mania than it does now. Doge to a dollar went from a meme to a very real possibility, and it almost would have been memed into reality thanks to one man: Elon Musk.
This tweet started it all:
Just before the new year, Musk sent Doge on a moon mission. Quite literally so, in fact:
By becoming the de facto spokesman and main cheerleader of Dogecoin, Musk pumped the price to record highs in what was a testament to the market-making power of social media accounts. It all culminated in his appearance on Saturday Night Live on May 8, 2021, where many traders expected Doge to top out on the back of Musk drawing mainstream attention to it.
Lo and behold, that is more or less what happened — and Doge to a dollar did not. With an all-time high of just short of 80 cents, Doge has been on a steady downtrend ever since. And with Elon Musk tweeting less and less about his favorite meme coin, retail seems to have lost a lot of interest as well.
But don’t count either Doge or Musk out entirely, though, as a recent quick 25% pump of DOGE after another Musk tweet proved.
Solana (SOL)
On to the “more serious” altcoins we go.
The breakout performance has to go to Solana, up a cool 11,500% on the year. It has established itself as the most legitimate contender for challenging Ethereum’s DApp dominance and is the go-to solution for those fed up with Ethereum’s problems like sluggish transactions and extortionary gas fees.
Is Solana better than Ethereum? Depends on who you ask and what you need, but our Solana vs Ethereum comparison will help answer this question.
Solana has its very own billionaire cheerleader, too. Although Sam Bankman-Fried may not be as outspoken or colorful as Elon Musk, he certainly did not hold back when faced with FUD about Solana early this year. In fact, his response to it has aged as well as any tweet in 2021:
SBF’s answer has since become a meme in itself, and rightfully so, as Solana has surged to fifth position in market capitalization for cryptocurrencies. The coin’s TVL keeps expanding and sits just below $12 billion, as Solana has become home to highly promising projects like Audius.
Praised for its high-speed transactions that work at almost no transaction fee, Solana seems well-positioned to carve out its own little niche in the GameFi sector, starting with high-quality blockchain games like Star Atlas.
However, it’s not all milk and honey in SOL land either, as Solana continues to struggle with outages and DDoS attacks, giving its critics new ammunition to deny Solana’s aspirations of becoming “the next Ethereum.”
Polygon (MATIC)
Polygon is another blockchain success story, although it’s not a layer-one rival to Ethereum like Solana — but a layer-two scaling solution instead. Even though Polygon has been around for years and quietly chipping away at a solution for Ethereum’s woes, the wider market was not paying much attention to it until this year when, on the back of a surging DeFi ecosystem, the popularity of Ethereum DApps exploded and with it went the gas fees.
Enter Polygon and its sidechain scaling solution for Ethereum. In the spring altcoin run-up, MATIC pumped to well over $2, all the more impressive considering it had started the year at under $0.02. As the market took a beating, so did MATIC (Polygon’s name before its rebranding).
In recent weeks though, Polygon has looked as strong as ever, recording a new all-time high in December and looking primed for additional upside to its 11,900% yearly return in 2022.
MATIC holders must be fancying their chances, as Polygon has pivoted from providing a sidechain as a scaling solution to working on zk-rollups, the new darling and hope of the Ethereum ecosystem to finally relieve some of the pressure on the ETH mainnet. If the product and the narrative align for Polygon, we haven’t seen anything yet.
Terra (LUNA)
Terra is crashing the altcoin party late but hard. Its onslaught on the market in Q4 has boosted Terra’s yearly return from impressive to an eye-popping 17,000%.
LUNA has entered the top 10 cryptocurrencies by market capitalization and Terra currently boasts the second-highest blockchain TVL (although its $18 billion are still a far cry from Ethereum’s $150 billion).
It’s all been made possible by Terra’s clever tokenomics that implement LUNA as backing for its UST stablecoin, now the fourth-biggest stablecoin on the market and the biggest algorithmic stablecoin to boot. With the market finally catching up to what the Columbus-5 upgrade does for Terra — namely expand integration with other blockchains through its wormhole bridges — Terra could be another altcoin set for more upside in 2022, albeit less astronomic than its 2021 gains.
Deflationary pressure on LUNA through more UST adoption would be the main catalyst. Still, as with all altcoins, Terra will be at the mercy of Bitcoin and Ethereum holding their ground in an uncertain macro environment.
Avalanche (AVAX)
Avalanche has long been tipped to be a prime contender for an “alternative Ethereum.” So it was not quite as much of a dark horse as the other layer-one chains, if you may say so, at a 3,500% yearly gain. Its multichain solution was always going to be interesting from a technical perspective, but we all know, crypto is not always about the tech.
This year, though, AVAX delivered the goods, thanks to a flourishing ecosystem. At its forefront is Trader Joe, the ecosystem’s main DEX that stands out with an innovative and fast-moving approach to adopting to projects and infrastructure on Avalanche. Small wonder that Trader Joe is the second-biggest non-Ethereum DEX by TVL, right after PancakeSwap (which in itself would have been a contender for this list but did not make the cut this time around).
Boasting over $2 billion in TVL and a significantly lower mcap-to-TVL ratio than CAKE, TraderJoe may not be done with its growth yet either.
And probably neither is Avalanche, which enjoys the backing of whales like Zhu Su, CEO at one of the biggest investment funds in crypto.
Olympus (OHM)
Switching gears from layer-ones and layer-twos, we’re on to something entirely different.
And OHM is something entirely different indeed, something crypto and DeFi had not seen before. It looks like a ponzi, smells like a ponzi, and walks like a ponzi — but it’s not a ponzi? Those that knew of OHM early enough — and early was spring of 2021 because Olympus is not even a year old — may be excused for passing on a 59,000% gain in index-adjusted prices (that is, if you had held onto your stack till today).
Olympus not only went from zero to over $3 billion in market capitalization in a little over six months, but it also (unfortunately) incepted its own copycat mania: OHM forks. Even though those have died down a bit in the closing stages of 2021, OHM forks at one point were more ubiquitous than dogcoins and other meme currencies.
But the main innovation Olympus added to the DeFi space was undoubtedly its revolutionary (and hard-to-execute) mechanism of acquiring “protocol owned liquidity.” Aware that liquidity providers are only around as long as there is yield to farm, Olympus came up with an ingenious mechanism to weed out “mercenary liquidity” and get investors to buy in for the long run.
Read more about it in the deep dive into the Olympus DAO and our article about DeFi 2.0.
Axie Infinity (AXS)
The final altcoin trend of the year that bought more than one Lambo was blockchain games and metaverse projects.
And look no further for the former than Axie Infinity. At a 13,800% yearly gain, even a $1,000 investment would have bought an acceptable sports car. But who could have seen that astronomic rise of play-to-earn games coming?
Even if you did not, you could have made money by playing Axie Infinity in its early stages, as reportedly wades of people in developing countries did, swapping their daily jobs to become full-time crypto gaming professionals. In a country like the Philippines, monthly profits of $500 to $1,000 dollars go a long way — Axie may have started a development that could develop from a fleeting trend into a real job sector. Blockchain games may or may not be the future of the internet, but they are not going away anymore.
Metaverse Coins: Decentraland (MANA) and The Sandbox (SAND)
To cap it off, metaverse projects like Decentraland and The Sandbox have been late beneficiaries of mainstream companies fomo’ing into the metaverse trend (up 3,500% and 10,100% on the year).
If you’ve been living under a rock in 2021, here’s a quick explanation of the metaverse for you:
The metaverse is a virtual world that will be ownable through crypto assets that live on different blockchains — this world is also set to become more immersive and appealing with the rapid improvements in technologies like VR and AR.
If you have seen the movie Ready Player One, you will know what we mean. If you haven’t, it will be a good educational resource about the metaverse. (As is our YouTube channel).
So where do mainstream companies come in?
Again, in the unlikely case that you have missed it: legacy companies—some call them boomer companies—like Facebook and Microsoft are trying to board the metaverse train and build their own versions of it. Facebook even went as far as rebranding itself to Meta in an explainer video by Marc Zuckerberg that provided social media with plenty of memeable material:
Just like blockchain games, metaverse projects are not going anywhere, so altcoin hunters should be on the lookout for the few gems in a sea of exit scams trying to cash in on the hype.
The Wrap-Up
Altcoin season 2021 was a good one. Wen altcoin season 2022?
If and when we get one remains to be seen, but stay tuned for our series as we’ll be looking at 2022 altcoin predictions in the following days.
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