Some cryptocurrencies saw big gains in 2021, but these cryptocurrencies produced astronomical price increases.
Even factoring in the recent price crash, the performance of certain cryptocurrencies this year has been off the charts. Some cryptos have gained over 1,000% since the start of the year. And a handful have seen price increases of over 10,000%.
For example, if you’d bought $100 of Solana (SOL) on Jan. 1, it would be worth about $12,860 today, according to CoinMarketCap data. Here are six coins in the top 100 by market cap that have gained over 10,000%. Do you have any of them in your portfolio?
1. Gala (GALA) — up over 47,600%
Gala Games’ mission is to create blockchain games people want to play. There are several different games on the platform, all of which use the GALA token. Players control their in-game assets in this community-driven project.
2. Axie Infinity (AXS) — up over 18,300%
Axie Infinity pioneered play-to-earn gaming. Axie Infinity players earn two in-game tokens, AXS and SLP (Smooth Love Potion), they can swap on crypto exchanges for real money. Both Gala and Axie are changing the way gaming works by giving rewards that have value outside the game itself.
3. Sandbox (SAND) — up over 15,000%
Metaverse tokens are all the rage right now, and none more so than Sandbox, which just opened an alpha version of its virtual world. The SAND token is the currency in this metaverse, where people can build, own, and monetize their environments.
4. Polygon (MATIC) — up almost 13,800%
Polygon is a layer 2 solutions aggregator for Ethereum (ETH). Layer 2 cryptos sit on top of an existing blockchain to improve performance. Ethereum hosts the lion’s share of decentralized applications, but until it completes its upgrade to Eth2, developers struggle with high transaction fees and network congestion. Polygon offers several different solutions, so developers can choose the right one for their project. This has been a key driver behind its growth.
5. Terra (LUNA) — up over 10,900%
Terra has created various stablecoins that are pegged to different currencies, including dollars, euros, and Japanese yen. Its LUNA token is the backbone of its network and is crucial for maintaining the prices of the stablecoins. Terra hopes to create a digital payment system that’s independent of banks and centralized authorities.
6. Solana (SOL) — up over 10,700%
Solana has captured developer and investor attention with its super fast ecosystem and low transaction costs. Unlike Polygon, Solana is a layer 1 protocol. This means it is a whole new ecosystem that’s designed to be faster and cheaper than Ethereum from the outset.
Is it too late to buy them?
With over 15,000 cryptocurrencies on the market, this is an unpredictable asset class with huge amounts of misinformation and scams. For every coin that produced eye-watering returns, others will have lost value or failed completely.
As to whether it’s too late to buy the coins above, bear in mind that past performance is not an indicator of future success, especially in the topsy turvy world of crypto. Some of the top performing coins of 2020, such as Chainlink (LINK), have had a lackluster 2020.
If you’re a long-term investor, the real question to consider is which cryptocurrencies will deliver gains in the coming five or 10 years. Personally, I hold some of these tokens because I think they might continue to perform well. There are several interesting projects that solve important problems and have good teams behind them. But if you want them to give you more gains of over 10,000%, that ship has most likely sailed.
We don’t know what will happen to cryptocurrencies in 2022 and whether any of them will produce the crazy gains of 2021. However, if you’re looking for the next big thing, one approach might be to consider possible market trends. For example, smart contract and metaverse cryptos have seen considerable gains in 2021. Next year, we might see gains in web3 and social media cryptos.
Do your own research into any coin before you invest. Look at the management team, the problem the coin plans to solve, the number of people it might impact, and how it stands up against the competition.
Finally, and most importantly, don’t invest money you can’t afford to lose. When you see stories of incredible gains, it’s very tempting to put all your money into crypto in the hope of getting rich. But even if you carefully research each investment, crypto returns are not guaranteed. It’s never wise to buy crypto at the cost of meeting other financial goals.
Emma Newbery owns Axie Infinity, Sandbox, Polygon, Ethereum, Terra, Solana and Chainlink. The Motley Fool owns shares of and recommends Bitcoin.