The digital asset market is booming, with bitcoin hitting a total market capitalization of over $1 trillion in Q1/2021.
In this guide, you will discover the top ten digital assets by market capitalization to give you insight into what crypto investors are the most excited about in early 2021.
Bitcoin has a 61.2 percent dominance in the crypto market and the highest market capitalization of over $1 trillion. Bitcoin’s dominance is attributed to its popularity across the globe and its potential as an alternative to traditional investments like gold and stocks.
Institutional investors have been keen to stock up on their bitcoin holdings in 2021. For instance, MicroStrategy’s total BTC holdings have reached around $4.4 billion. Moreover, companies like Tesla have not been left behind in the recent bitcoin buying mania. In February 2021, the electric car company revealed that it had purchased $1.5 billion in bitcoin and “may acquire more and hold digital assets from time to time.”
In the past twelve months, bitcoin has outperformed all major asset classes by a margin. The latest Goldman Sachs US Weekly Kickstart report showed that bitcoin’s year-to-date return is about 70 percent, roughly twice the returns of the energy sector, which is the closest competitor at about 35 percent.
On January 1, 2021, bitcoin closed at $29,374.15. Eight days later, the cryptocurrency surpassed $40,000 only to drop back below this price by the close of January 10. The bitcoin price stayed in the $40,000s range for several days until February 16 when it hit $50,341.10. In mid-March, bitcoin reached a new all-time high of over $61,000.
Ethereum came out really strong in 2021, hitting new all-time highs and securing a market dominance of about 12 percent. The market cap of ETH at present is $205.4 billion.
In 2021, the price of ether was $730.37 at the close of January 1. Two days later, ETH hit $1,006.57 for the first time. On February 2, ETH skyrocketed to more than $1,500, then reached $2,036.29 later that month, hitting a new ATH.
The explosion of DeFi in 2020 and non-fungible tokens (NFTs) in 2021 have made Ethereum very popular. However, DeFi projects, decentralized apps, and the NFT craze are heavily congesting the Ethereum network. As a result, Ethereum gas fees have soared tenfold over the last twelve months.
Ethereum developers are planning a network upgrade that should come into effect in the summer. The upgrade, EIP-1559, is part of the larger Ethereum 2.0 improvement plan. The upgrade will change the transaction fee system. Rather than sending the fees to the miners, users will send the fees to the network. These fees will then be burned to decrease the overall supply of ETH.
Some miners are opposing this upgrade and are rallying to disrupt the network upgrade. Ethereum mining pool, SparkPool, is one of the opposers of the overhaul.
That said, Ethereum has impacted the blockchain space positively since it was released in 2015. It will be interesting to see how it progresses in light of the current challenges and increasing competition from other blockchain platforms.
Binance Coin (BNB)
Binance Coin is the third-largest digital asset by market capitalization on Coinmarketcap. The native cryptocurrency of Binance Chain has been performing well in 2021, hitting a market cap of $39.5 billion.
On January 1, 2021, BNB recorded a closing price of $37.91. The cryptocurrency reached $51.61 on February 1 and closed at $107.90 on February 9. The next day, BNB hit a new all-time high of $148.07 followed by another ATH of $342.88 on February 19. Since then, the BNB price has mostly stayed above $200.
The rise of BNB could be a reflection of the speculation that Binance will dominate the crypto industry in the future. Furthermore, the BNB price increase on February 19 could have been fuelled by the rising interest in PancakeSwap, which flipped Uniswap to become the top DeFi token. PancakeSwap is a decentralized exchange (DEX) that runs on Binance Smart Chain (BSC). BSC is a smart contract-enabled blockchain that runs parallel to Binance Chain.
Tether is the largest dollar-backed stablecoin with a market capitalization of $38.5 billion.
Unlike the other cryptoassets in the top ten, USDT provides price stability as the coin’s goal is to act as a digital dollar for the crypto capital markets.
While Tether offers a solution to cryptocurrency volatility, it has long been shrouded in controversies, with its dollar backing regularly being questioned. The most recent controversy involved a case where crypto exchange Bitfinex used funds from Tether to conceal $850 million in losses. The exchange then falsely declared that the funds were safeguarded. In February 2021, Tether and Bitfinex, which share a parent company (iFinex), agreed to pay a penalty of $18.5 million to resolve the situation.
Cardano is another smart contract-enabled blockchain with a market capitalization of over $33 billion.
Cardano’s performance has been impressive over the last 12 months, recording an ADA token price surge of 2000+ percent. Consequently, Cardano has caught the attention of investors like Billionaire Michael Novogratz, who sought to crowdsource information on the asset.
On March 1, 2021, Cardano’s developers conducted a protocol update dubbed “Mary” that allows users to create tokens. Cardano is now a multi-asset chain that can support the tokenization of assets.
The opening ADA price on January 1, 2021, was $0.18. The price surged to $0.37 on the last day of January, then reached an all-time high of $1.48 on February 27.
Cardano does not have a popular application yet, which makes some individuals surprised that it is enjoying so much popularity.
“I am not aware of a single popular application deployed on Cardano, nor have I seen any enthusiasm for the platform among developers,” said Nic Carter, co-founder of Coin Metrics.
Polkadot, an open-source sharding protocol that allows the cross-chain transfer of data and tokens, is another potential “Ethereum Killer.” Some people in the industry believe that it could steal Ethereum’s thunder to become the top smart contract platform in the market. The cryptocurrency, DOT, currently ranks sixth with a market capitalization of $32.6 billion.
DOT kicked off 2021 at $9.29 only to more than double to $19.32 on January 16. On the sixth day of the next month, the crypto asset rose to a high of $21.30. DOT then reached an all-time high of $42.32 on February 20. Since then, the digital asset has maintained a price above $30.
Polkadot is popular because it makes the innovation process simple. According to Derek Yoo, the founder of Moonbeam, which operates on Polkadot, people are enthusiastic about this protocol.
“Most of the people using Polkadot are developers. They are building new blockchains or new decentralized applications and finding ways to link existing chains to Polkadot’s new way of doing things,” he said.
Ripple’s XRP was previously a top-three ranking cryptoasset but has since dropped in the rankings. Despite facing a legal suit from the US SEC, XRP has managed to maintain its spot among the top ten cryptocurrencies. XRP has a market cap of $19.9 billion.
Ripple kicked 2021 off with a high of $0.24 on January 1 followed by a high of $0.74 on February 1. However, XRP has not broken beyond this price point since then. Additionally, it has failed to surpass its January 4, 2018, all-time high of $3.84.
Ripple Labs has ended its partnership with Moneygram and moved to get rid of the stake it holds in the money transfer company.
“We are proud of the work we were able to accomplish in a short amount of time, as well as the impact we were able to achieve in bringing this first-of-its-kind product to market. Together, we processed billions of dollars through RippleNet and On-Demand Liquidity (ODL),” Ripple wrote in a statement.
Interestingly, Banque de France is reportedly considering the XRP blockchain for the launch of its central bank digital currency (CBDC).
Uniswap is the largest decentralized exchange (DEX) on the Ethereum network and its token, UNI, has a market cap of $15.6 billion. The DEX does not charge companies for listing their tokens and lists as many as 845 digital assets.
UNI recorded a high of $5.27 on January 1, 2021. Over the next few weeks, the price soared to a high of $20.69 on February 1 followed by an all-time high of $34.87 on March 8, 2021. This was a gain of over 8,000 percent since the September 17, 2020 low of $0.41.
Litecoin is the ninth-largest asset by market capitalization and one that has been around since the early days of cryptocurrencies.
LTC started 2021 with a high of $133.19 on January 1. It then gained momentum and achieved highs of $173.03 and $180.87 on January 4 and 7, respectively. On February 18, LTC hit a high of $238. The crypto asset has, however, not broken the December 19, 2017 ATH of $375.29. LTC has a market cap of $13.4 billion.
The founder of Litecoin, Charlie Lee, sold and donated all of his LTC holdings in 2017 to expel conflict of interest. “It is a conflict of interest for me to hold LTC and tweet about it because I have so much influence,” he stated.
Chainlink, a decentralized oracle network, ranks tenth with a market cap of $11.3 billion.
LINK began 2021 with a high of $12.39 and attained an all-time high of $36.83 on February 20. The price has since been ranging between $20 to slightly over $30. To date, LINK has enjoyed a price increase of more than 21,000 percent since its all-time low of $0.12 on September 23, 2017.
One of the reasons Chainlink is popular is because it offers secure, up-to-date crypto price data feeds that are essential for DeFi applications. In February 2021, Chainlink launched Off-Chain Reporting (OCR) on the mainnet to scale its oracle network.
While BTC and ETH have maintained their ranks for a long time, other digital assets are constantly shifting from one rank to the other. Therefore, it will be interesting to see if any of the above cryptoassets can hold onto their current positions.
The information in this article is for informational and educational purposes only and should not be considered financial or investment advice. Investing in ICOs, IEO’s, cryptocurrencies, or tokens is highly speculative, and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.