Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.
One big feature of cryptocurrencies is volatility, which can either excite you or give you heartburn. Probably both. It’s a reason that the fastest growing cryptocurrencies can change by the minute. It’s also the reason that no one can predict which cryptos will see the biggest or fastest growth in the future. But we can tell you about some of the coins that saw immense growth in 2021.
One of the most exciting features of the cryptocurrency market is that it is always on, twenty-four hours a day and seven days a week. That means you can see individual coins rise and fall in response to the most minute of market events. Evergrande sows doubt about its real estate credit? Bitcoin dips. News breaks that Xi Jinping has praised Bitcoin in a speech? Bitcoin rises.
But determining the fastest growing cryptocurrencies over a longer period of time is a much harder task. And by much harder we mean impossible. Remember that volatility we mentioned? Crypto performance is not the same as stock performance. You can’t analyze a token like you can a company, identifying markers of potential growth. But you can observe trends. So what we’ve done in this story is identify some of the coins to have experienced large increases in value in 2021. Maybe that’ll help you determine what coins to watch in 2022. Or maybe not!Buy and Sell Bitcoin, Ethereum, and over a dozen other cryptocurrencies with Wealthsimple. Sign up and Trade here.
Solana experienced enormous gains in value between 2020 and 2021. Launched in spring 2020 as a competitor to Ethereum, Solana positioned itself as a scalable, faster, and cheaper alternative. One of its main innovations was proof-of-history, a novel consensus mechanism that has all the validators on the network agree on the time of the transactions according to a universal cryptographic clock. Like Ethereum, Solana also supports smart contracts, self-enforcing financial contracts that support decentralized applications.
Decentralized finance smart contracts on Solana support about $21 billion in value, according to December 2021 data from The Block. A lot of these do the same things as Ethereum. Solana’s coin, also known as SOL, has a market cap of $57 billion, as of December 8, 2021. That’s up from a market capitalization of $7 billion in June 2021.
Avalanche blew up around the same time as Solana. Its market cap rose from $1.87 billion in July 2021 to peaks of $30 billion in November 2021. Avalanche is built on three chains, the P, the C and the X chain. One handles smart contracts, the other the token minting and consensus protocol, and a final one for AVAX, the protocol’s native currency. Like Solana, Avalanche is a competitor to Ethereum that tries to beat it out on speed, scalability, and cost. Avalanche was built by a team of engineers led by Emin Gün Sirer, an associate professor of computer science at Cornell. Avalanche has huge backing from a Singaporean hedge fund called Three Arrows Capital.
The Sandbox is one of a handful of platforms that use so-called metaverse tokens — cryptocurrencies that are tied to an ambitious vision for the future of virtual reality, where interfacing in virtual spaces becomes as natural and rich as meeting in real life. The Sandbox is slightly more prosaic. It’s a 3D sandbox multiplayer game that looks a bit like Minecraft. The difference is that it’s all powered by cryptocurrencies; you can buy NFT-based virtual land in the game and build whatever you want on it.
The Sandbox’s native currency, SAND, rose sharply after Mark Zuckerberg renamed Facebook to Meta in October 2021. Its token rose from about $0.78 in late October to highs of $8.40 by the end of November, bringing its market cap to a total of $11 billion. Another currency called MANA, the native token of a similar game called Decentraland, also rose during this period. It rose from $0.8 in early October to highs of $5.9 in late November, bringing it to a market cap of $10.2 billion.
Axie Infinity is another game that’s tied to the metaverse. Specifically, it’s a Pokémon-inspired “fantasy creature” battling game powered by NFTs. It grew to prominence during the summer of 2021, and became so popular that it cost well over $1,000 just to buy the NFTs needed to play it. Despite the high prices, the game became a runaway success. By December 8, 2021, Axie Infinity NFTs had generated $3.6 billion in sales, according to CryptoSlam, a site that tracks the top NFT sales. But by February 2022, Axie’s market had crashed and it had become about ten times cheaper to get started. Shortly after that, it was the unfortunate victim of a $600 million hack.
The game has been so popular that there are shadow economies in developing nations like the Philippines and Venezuela where people rent out their NFTs to people who are willing to put in the hours to play the game. These workers keep a cut of the fungible Axie Infinity tokens they earn from playing Axie Infinity.
A separate governance token for the game, AXS, rose from $3.42 in late June 2021 to $160 in early November, when the market cap for AXS tokens peaked at $9.77 billion. Since it’s a governance token that lives on Ethereum, you can also use AXS to vote on the future of the game; the developers of Axie Infinity, Sky Mavis, have proposed taking a backseat role to development, should the community wish.
Axie Infinity’s success has spawned a whole genre of “play-to-earn” games—games that let players earn cryptocurrencies for playing them. Large gaming studios, among them Ubisoft, have started integrating NFT technology into video games, starting with the most recent Ghost Recon game. Working out which play-to-earn coin will be the next cryptocurrency to explode is a fulltime job, but the list of novel crypto games will surely contain some crypto movers.
Shiba Inu and Dogecoin
Some coins became the fastest-rising cryptocurrencies because of the power of memes. Shiba Inu and Dogecoin are two of the best-known examples.
In 2021, Dogecoin blew up, at one point amassing a market cap of just over $90 billion. It’s a fork of a fork of a fork (plus a couple more) of Bitcoin, and its main difference was to have an infinitely expanding supply of coins, plus the mascot of a chubby Shiba Inu dog that comes straight from the memes of the early 2010s. The coin attracted high profile investors, including Elon Musk, Mark Cuban, Snoop Dogg, and Gene Simmons.
Dogecoin has spawned several dozen offshoots, but the most popular one was an Ethereum token called Shiba Inu (SHIB). This token innovates on Dogecoin by attaching a suite of decentralized finance protocols, such as a decentralized exchange and a yield farm (a way of earning more tokens).
There are a couple of other key innovative differences between Dogecoin and SHIB. Since SHIB is a token that runs on Ethereum, not the native coin of its own blockchain, it can’t be generated with mining software. And SHIB has a unique piece of tokenonomics that “burns” a portion of the tokens in each transaction.
However, these coins were not really burned but instead sent to the wallet of Ethereum’s co-founder, Vitalik Buterin, who in one fell swoop donated billions of dollars worth of SHIB tokens to charity in the spring.
SHIB rose sharply until October 2021, at which point its market cap was about $41 billion, then sank like a stone until December 2021. At the end of 2021, SHIB’s market cap was about $20 billion. Like a lot of Dogecoin offshoots and top rising meme cryptocurrencies, some people would claim that SHIB never had legs and its high price is simply the result of its ebullient community.
Polygon, formerly known as MATIC (which is still the coin’s ticker name on cryptocurrency exchanges), is a cryptocurrency network designed to help blockchains scale. It grew to popularity in 2021 as a way to help Ethereum users cut down on transaction fees, which can hit highs of up to $200 at peak hours of network congestion.
Like other scaling solutions, Polygon incorporates a network of side chains that process some of the transactions elsewhere, then sends a data-efficient signal to the Ethereum blockchain to confirm batches of transactions all at once. Rival scaling solutions include Arbitrum, OMG Network and Boba.
MATIC’s market cap rose to $17 billion in December 2021, up from about $90 million at the start of the year. Progress has not been steady, and MATIC crashed from a market cap of about $15 billion in May 2021 to just under $5 billion by July.
Frequently Asked Questions
Growth can be measured by multiple metrics, not just price, and not all growth is sustainable. Also, given crypto’s volatility, the answer to this question depends on the day (or even the time of day) that you’re reading this. Cryptocurrencies that grew significantly in 2021 include Ethereum competitors like Fantom, Solana and Avalanche, scaling solutions like Polygon, stablecoin networks like Tether and USDC, and metaverse and play-to-earn tokens.
This depends on the specific cryptocurrency — and the whims of the market. It can also depend on the size of a token’s community, or even something so mundane as Elon Musk’s Twitter account.
Unlike stocks, cryptocurrencies don’t have measures by which you can estimate future performance. But that doesn’t keep people from trying. Some market analysts point to high-profile backers, star developers, a charismatic CEO, or an excellent use case. But no one really knows.
This depends on the metrics you use to assess growth. It also depends on the day and moment you’re looking at the market. But if you look at sheer percentage growth alone, the top fastest rising cryptocurrencies when this article was written in February 2022 are tiny meme coins like ElonFlokiInu, Christmas Floki X, Cross Chain Capital, Stream Smart Business, and ArbiNYAN. However, these markets are very small and may not be around in the next day, let alone the next week, month or year.
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