Bitcoin and Ether remain the top two cryptocurrencies by market cap — but there have been some surprising entries... and a fair few notable departures.
We've spent a lot of time reflecting on the highs and lows of 2021 — a year punctuated by all-time highs, adoption milestones and audacious hacks.
Over the past 12 months, the top cryptocurrencies by market cap have changed immeasurably. Established digital assets that have been a mainstay of the markets slid down the rankings, with surprising alternatives taking their place.
In this article, we're going to shine a spotlight on the 10 cryptocurrencies at the start of 2022, reveal their percentage gains over the past year, and find out whether their rankings have improved or worsened.
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1. BITCOIN (RANKING UNCHANGED)
January 1, 2021 price: $29,374.15
January 1, 2022 price: $47,686.81 (+62.3%)
As we explained in our look back at 2021, Bitcoin has had a blockbuster year. And indeed, analysts including Bloomberg Intelligence's Mike McGlone are exceedingly bullish about what lies in store for 2022. That being said, BTC's gains of 62.3% over the past 12 months do pale into comparison to the 308% surge during 2020, a year when prices kicked off at a mere $7,200.17.
Setting out his 2022 predictions for Bitcoin, El Salvador President Nayib Bukele says he believes the world's biggest cryptocurrency will hit $100,000 — and two more countries will embrace it as legal tender. He also vowed that construction on Bitcoin City will commence, with volcano bonds oversubscribed. Bukele went on to suggest there will be a "huge surprise" at the Bitcoin 2022 conference in Miami, which is due to be held in April.
This tweet will age well 😎
— Nayib Bukele 🇸🇻 (@nayibbukele) January 2, 2022
2. ETHEREUM (RANKING UNCHANGED)
January 1, 2021 price: $730.37
January 1, 2022 price: $3,769.70 (+416.1%)
Despite an ever-growing number of so-called "Ethereum killers" breathing down its neck, ETH handily outperformed BTC in 2021. Indeed, December saw the ETH/BTC trading pair reach its highest level in three-and-a-half years. A lot of this has been attributed to the upgrades that have been made to the Ethereum blockchain, with the supply of new ETH entering the market being slashed dramatically.
There's still a lot of work to be done. The full transition to a Proof-of-Stake blockchain is yet to be completed, and this is seen as crucial for alleviating pressure on the network and bringing transaction fees down to affordable levels.
3. BINANCE COIN (UP SIX PLACES)
January 1, 2021 price: $37.91
January 1, 2022 price: $527.35 (+1,291%)
Binance Coin dramatically surged up the rankings in 2021. The BNB token can be used for transactions on the Binance crypto exchange, delivering lower fees. It's also at the beating heart of Binance Smart Chain, which has quickly become the home of crypto projects seeking a sanctuary from high transaction costs.
4. TETHER (DOWN ONE PLACE)
Given it's a stablecoin — meaning that it's always supposed to be worth $1 — there's little point in checking out how USDT's price has changed over the past year.
However, there's one interesting metric we can look at: how Tether's market cap has evolved. Back in January 2021, this stood at $21.1 billion. One year on, and the total value of USDT in circulation stands at $78.3 billion — up 271%.
Some avid watchers of the crypto markets find all of this extremely concerning, and argue that the stablecoin issuer has failed to prove that USDT is fully backed by cash that's held in reserve. There are fears that, if Tether was to collapse, it would drag down the rest of the cryptocurrency sector with it.
5. SOLANA (UP 115 PLACES)
January 1, 2021 price: $1.84
January 1, 2022 price: $178.52 (+9,602%)
We're now starting to get to the altcoins that had an astounding performance in 2021. Solana was a relative unknown — No. 120 in CoinMarketCap's rankings — at the start of last year. A parabolic bull run would change all of that.
Billed as the fastest blockchain in the world, Solana says the typical transaction on its network costs $0.00025. That's infinitely cheaper than Bitcoin's $2.25, and Ether's $3. All of this could make SOL a compelling choice for decentralized finance projects especially.
However, there have been teething problems. A major outage in September meant that the Solana network was offline for a whopping 17 hours. (At this point, Bitcoiners would smugly point out that the BTC blockchain had 100% uptime for the whole of 2021.)
6. CARDANO (UP 2 PLACES)
January 1, 2021 price: $0.17
January 1, 2022 price: $1.38 (+711%)
Continuing with the theme of Ethereum killers now, and our attention turns to Cardano. One particularly bullish development here comes in the form of a report from Santiment, which reveals this blockchain was No. 1 in terms of aggregated development activity for the whole of 2021. Cardano saw off competition from the likes of Kusama, Polkadot and Ethereum to claim the top prize.
A big milestone for the project, founded by Charles Hoskinson, led to smart contract functionality being successfully rolled out back in September. Cardano currently boasts 2 million users — but Hoskinson believes this can surge to 20 million in the coming 12 months.
7. USD COIN (UP 4 PLACES)
USD Coin is another stablecoin that has seen its market cap balloon over the past 12 months. At the start of 2021, there were about 4 billion USDC in circulation. This has now risen by more than 950% to 42 billion USDC.
All of this comes despite the prospect of stablecoins being subject to tighter regulation in the U.S. Six prominent crypto executives appeared in front of the House Financial Services Committee as 2021 drew to a close. During one especially enlightening exchange, they argued that stablecoins aren't attempting to undermine the U.S. dollar, but reinforce its dominance — making it easier for consumers in emerging economies around the world to access it.
8. XRP (DOWN 4 PLACES)
January 1, 2021 price: $0.23
January 1, 2022 price: $0.85 (+269%)
On the face of it, gains of 269% seem incredibly impressive. But dig a little underneath the surface, and you'll begin to see that XRP has suffered a great deal of turmoil over the past 12 months.
All of this links back to a lawsuit that the U.S. Securities and Exchange Commission filed against Ripple, the company that founded it. The regulator alleges that the sale of XRP amounts to an unregistered securities offering.
These legal proceedings began back in December 2020, prompting the value of XRP to plunge precipitously. As we saw, XRP mounted an impressive recovery in 2021 as Ripple entered into partnerships with a number of high-profile businesses and central banks — especially in emerging economies.
Crypto watchers will be keeping a close eye on whether a settlement is reached in this long-running, bitter legal dispute as 2022 gets underway.
9. TERRA (UP 50 PLACES)
January 1, 2021 price: $0.69
January 1, 2022 price: $91.36 (+13,140%)
When it comes to astronomical price gains, Terra (known by its ticker LUNA) is in a class of its own in the top 10 cryptocurrencies.
What's all the more remarkable about LUNA's ascendancy is how the token managed to shrug off the woes that seemed to grip the rest of the crypto markets — especially in November and December.
Terra is becoming an increasingly major player in the world of decentralized finance, especially in algorithmic stablecoins. It also operates on a Proof-of-Stake blockchain — the exact same consensus mechanism that Ethereum is currently transitioning to.
Algorithmic stablecoins have raised eyebrows because of how they aren't backed by any collateral sitting in a bank — such as a precious metal or a fiat currency. Instead, complex codes are used to ensure that prices remain at a steady level. There can be disastrous consequences if things go wrong.
10. POLKADOT (DOWN 4 PLACES)
January 1, 2021 price: $8.31
January 1, 2022 price: $28.58 (+243%)
We round off the list with another Ethereum killer: Polkadot.
The latter part of 2021 has been dominated by parachain auctions. Parachains are layer-one blockchains that boast their own tokens and governance mechanisms, but they can connect to Polkadot's central chain. Dubbed as a "protocol for protocols," Polkadot was launched by Ethereum's co-founder Gavin Wood.
New Entrants in the Top 20… and Major Casualties
Of course, there were some notable (and rather furry entrants) to the top 20 in 2021. Dogecoin and SHIBA INU remain in No. 12 and No. 13 — despite the value of both altcoins cooling substantially in recent months. They've come a long way over the past 12 months. DOGE was No. 38 at the start of 2021, while SHIB was nowhere to be seen.
Crypto.com Coin also made its way into the top 20. Brand recognition was fueled by a number of major partnerships, with the exchange becoming the brand-new sponsor of Staples Center in a multimillion-dollar deal.
