The emergence of institutional investors and their interest in Bitcoin (BTC) and Ethereum (ETH) have fundamentally changed the landscape of the cryptocurrency market. Bitcoin and Ethereum dominate, but some digital tokens have surpassed these lead assets, as evidenced by a recent report from CoinMetrics.
From December 1, 2020, to January 17, 2021, Cardano (ADA), Dogecoin (DOGE), and Decred (DCR) posted returns of 146.31%, 174.96%, 126.59%, respectively while Bitcoin and Ethereum posted returns of 91.65% and 111.14%, respectively.
Other rival L1 blockchains, such as Litecoin (LTC) and Bitcoin Cash (BCH), reported 68.07% and 67.68% gains each, which is comparatively lower than BTC. Both continue to see market dominance decline as the narrative shifts from paying capacity to saving.
So-called Ethereum killer blockchains such as Tron (TRX) and EOS fell short of expectations, reporting negative and zero returns within the specified time frame.
Polkadot has grown significantly in 2021 to become the main outstanding Tier 1 blockchain. Interoperable blockchain and the brainchild of Ethereum co-founder Gavin Wood flipped Ripple’s XRP to rank the fourth-largest cryptocurrency by market capitalization.
Cardano is also substantiating its value as an L1 blockchain through betting and discussions with creator Charles Hoskinson about the implementation of DeFi in Africa after fully integrating smart contract functionality. These developments have helped propel the 100% rise in the ADA price since the beginning of 2020, making it the sixth-largest, unseating Bitcoin Cash.
The Decred Token (DCR) mirrors Bitcoin with a maximum supply of 21 million tokens, the network combines PoW with PoS to allow all community members to participate and receive rewards.
The built-in governance mechanism gives token holders a direct vote in the future of the project, and the release of the Decred Decentralized Exchange (DCRDEX) on October 21, 2020, triggered a rise in the DCR price from $11.68 to a new high of $67.80 on January 8th.
DeFi Returns from Dec 2020-Jan 2021. Courtesy: Coin MetricsThe DeFi boom has become incredibly attractive for investors looking for a more hands-on approach to interacting with emerging blockchain projects. This sector is the clear driving force behind the market, and since December 1, 2020, Uniswap (UNI), AAVE, Synthetix (SNX), MakerDAO (MKR), SushiSwap (SUSHI), and Curve (CRV) have surpassed Ethereum and BTC. The total value locked in DeFi recently hit an all-time high of $25 billion.
The latest data from Messari shows that 157 crypto assets that hit record highs in 2018 are still trading at prices more than 90% below their ATH.
However, despite the poor performance of many Altcoins in previous years compared to their all-time highs, many older Altcoins still posted huge percentage gains after bottoming out.
Since hitting a bottom in the market bloodbath on March 13, 2020, Cardano (ADA) is up nearly 1,700%, Zilliqa (ZIL) surged by 2,670%, and Decred (DCR) is up 14,130% from their respective March lows.
Image Credit: Coin Metrics, Shutterstock
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