In 2021 cryptos stood out for their remarkable performance. At one point in November, the industry’s market value exceeded $3 trillion. But the recent bloodbath on the Street has since knocked the total market capitalization (cap) down to around $2 trillion.
Regular InvestorPlace.com readers would know that Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD) are two largest digital assets with respective market caps of about $807 billion and $385 billion. Meanwhile, the number of cryptos now stands close to 8,000.
Understandably, not all these digital assets have real-life utility. In fact, quite a few are meme coins that have come to prominence in recent months. For instance, many crypto enthusiasts pay attention to tweets by Elon Musk, CEO of Tesla (NASDAQ:TSLA), who uses the Twitter (NYSE:TWTR) platform regularly. He is credited with the interest behind meme coins like Dogecoin (CCC:DOGE-USD) and Shiba Inu (CCC:SHIB-USD).
Most digital assets have been growing primarily due to their increasing mainstream adoption and innovation. In addition, both individuals and prominent brands, such as Kellogg (NYSE:K), Starbucks (NASDAQ:SBUX) Yum! Brands (NYSE:YUM), have been embracing non-fungible tokens (NFTs). Finally, the growth of decentralized finance (DeFi) platforms have also contributed to the increase in the number of cryptos.
With that information, here is our list of seven cryptos that could gain further traction in the months ahead:
As always, investors should be careful when investing in cryptocurrency, as the sector as a whole is prone to volatility.
Up-and-Coming Cryptos to Buy Early: Avalanche (AVAX-USD)
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52-Week Range: $7.19 — $146.22
Ava Labs launched Avalanche in 2020 to host decentralized smart contracts. This open-source network is highly regarded for settling transactions rapidly via proof-of-stake (PoS) consensus mechanisms.
Like many of its peers, Avalanche wants to become the most prominent name hosting decentralized applications (dApps). Recent metrics show close to 4,000 dApps across various blockchains and Ethereum leads the space with 75% market share. Although Avalanche is still a newcomer to this space, it has lofty goals.
Its native coin, AVAX-USD, is currently trading around $90.50, up about 1,070% in the past year. Despite the recent slide in prices of digital coins, Avalanche returned about 6% over the past month as well. With a market cap of $22.1 billion, it is the 11th largest cryptocurrency.
Cardano (ADA-USD)
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52-Week Range: $0.1692 — 3.0992
Launched in 2017, Cardano is one of the third-generation blockchains. Like Avalanche, it also competes with Ethereum and other dApp platforms. The cryptocurrency likewise strives to become the ultimate blockchain platform for smart contracts and decentralized finance (DeFi) apps.
Cardano is well-known as the only peer-reviewed blockchain platform in the industry and ADA-USD is the native currency powering the Cardano platform. It is used for rewards, transactions, and participation in network governance.
In September, the protocol launched its Alonzo hard fork upgrade, adding smart contract functionality to its blockchain. As a result, Cardano says the platform has become more efficient, scalable and secure.
ADA-USD started 2021 at $0.18. The altcoin reached an all-time high (ATH) of $3.10 in early September. Currently off the highs, it trades at $1.22, still up more than 300% over the past year. Its market capitalization of $39 billion positions Cardano as the seventh-largest coin in the crypto market.
Cosmos (ATOM-USD)
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52-Week Range: $5.03 — $44.70
Launched in 2014, Cosmos is a decentralized network that allows blockchains to connect with each other. The platform provides developers with open-source tools to create their own interoperable blockchains. It aims to create an entire ecosystem of interconnected blockchains that freely share data and tokens across the blockchains in the Cosmos ecosystem.
ATOM-USD is the native token powering the network. Users can stake their ATOM-USD to earn rewards, just like depositing cash into a bank account to earn interest over time. Cosmos’s annual reward rate fluctuates between 7% and 20%, depending on how much money is currently staked in the network.
Each blockchain in the Cosmos ecosystem is hooked up to its inter-blockchain communication (IBC) protocol, which connects all blockchains. In February 2021, Cosmos launched a Stargate upgrade that activated the IBC protocol. This move has allowed hundreds of blockchains on its platform to communicate with each other for the first time.
ATOM-USD started 2021 at around $5.41. The crypto then saw a record high of $44.79 in September. It currently hovers slightly above $40. Over the past year, ATOM-USD is up 550%. Its market capitalization of $11.6 billion currently positions Cosmos as the 17th largest cryptocoin.
Filecoin (FIL-USD)
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52-Week Range: $20.93 — $236
Launched in 2017, Filecoin is a decentralized peer-to-peer (P2P) network for file storage. The network leverages its decentralized nature to protect the integrity of a data’s location, making it both easily retrievable and difficult to censor.
Unlike centralized data storage providers like Amazon (NASDAQ:AMZN) Web Services, Filecoin has developed a publicly verifiable storage system that doesn’t rely on a single central entity. The platform instead uses proof-of-replication and proof-of-spacetime protocols to safeguard the integrity of its file storage network.
FIL-USD is the native digital token that powers the network. The token is offered as an economic incentive to ensure the reliability of Filecoin, where users pay fees to ‘storage miners’ for storing their files on the network. These storage miners use internet-connected computers assigned to store files. Anyone can receive FIL-USD rewards for offering their storage capacity as a storage provider.
The altcoin began 2021 at $22.22 before surging to an all-time high of $237 in April. Currently, FIL-USD trades around $31, up 40% over the past year, though the crypto has declined about 25% in the past month. Its market cap of $4.5 billion makes FIL-USD the 40th largest altcoin in the crypto space.
Polkadot (DOT-USD)
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52-Week Range: $7.29 — $54.84
Launched in 2016 by Gavin Wood, Polkadot was created by the Swiss-based Web3 Foundation as an open-source sharded blockchain that connects various chains in a single network. Polkadot allows separate chains to process transactions simultaneously and securely exchange data between chains.
The crypto space contains thousands of coins that normally can’t communicate with each other. Polkadot facilitates the cross-chain transfer of any data or digital asset. User-created blockchains that connect to Polkadot’s central blockchain are called “parachains.” Polkadot builds a framework that interconnects parachains even if they perform different functions. The result is transparent cross-chain connectivity and customization of blockchains.
DOT-USD is the native cryptocurrency of Polkadot. The token is used for making transactions, staking, providing network governance, and creating parallel chains via bonding. Polkadot has no limit on its total supply; new tokens are released into circulation at a predetermined annual inflation rate of 10%.
The crypto started 2021 around $8.50. In May 2021, the altcoin hit an ATH of $54.94. DOT-USD currently hovers at $25, up 160% over the past 12 months. With a market cap of almost $26.7 billion, DOT-USD is now the ninth-largest digital coin in the crypto space.
Solana (SOL-USD)
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52-Week Range: $2.03 — $260
Launched in March 2020 by Anatoly Yakovenko, Solana is a smart contract blockchain with a robust DeFi ecosystem that facilitates DApp creation and boasts a high-throughput, low-fee platform.
The network is powered by a hybrid architecture of PoS and proof-of-history (PoH) protocols. This hybrid architecture makes Solana a robust destination for dApps and NFT projects. Furthermore, as a PoH protocol does not need validators to communicate with each other, Solana can handle up to 50,000 transactions per second.
Network fees stand at around $0.00025 per transaction, substantial savings compared to Ethereum’s high gas fees. Hence, the digital coin has seen significant interest from retail traders and institutional players alike.
SOL-USD, Solana’s native token, powers the platform. The crypto started 2021 at around $2.16. It recently rallied to an ATH of $260 in early November. Currently hovering at $139, Solana has seen a 5,800% gain over the past 12 months. With a market cap of $43.2 billion, SOL-USD is currently the fifth largest coin in the crypto space.
Terra (LUNA-USD)
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52-Week Range: $ 0.70 — $102.00
Launched in April 2019, the Terra network uses fiat-pegged stablecoins to power price-stable global payments systems. Coins are algorithmically pegged to their respective currencies rather than fiat currency reserves. And the algorithm uses LUNA-USD to stabilize the price of the protocol’s stablecoins.
TerraUSD is one such stablecoin, created by Terraform Labs. Its stability is maintained indirectly via the TerraSDR coin, which is pegged to the value of the International Monetary Fund’s (IMF) special drawing rights (SDR) due to the underlying asset’s relatively low volatility.
The Terra network is a proof-of-stake blockchain. The network rewards validators with a small fee for every transaction. Transaction fees and validator rewards are denominated in TerraSDR.
In July 2021, Terraform Labs raised $150 million from investors. The funding was allocated for Terra’s Ecosystem Fund to sponsor projects built on the Terra blockchain. Additionally, Terra completed its Columbus-5 upgrade in September. The upgrade allows users to transfer Terra assets onto other blockchains.
LUNA-USD started 2021 at around $0.6314. It currently trades at $70 territory, up more than 8,100% over the past 12 months. With a market cap of $25.3 billion, it ranks as the tenth largest altcoin in the crypto space.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.
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