4 Unstoppable Cryptos That Have Left Solana in the Dust – Motley Fool

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Solana has outperformed most other cryptocurrencies this year — but not all of them.


Key points

  • Only a few cryptocurrencies have outperformed Solana so far this year, which is not surprising given that Solana is up 11,700% since Jan. 1.
  • Right now, metaverse tokens like Axie Infinity and Sandbox are producing higher returns than Solana, but this may change.
  • In the long run, Ethereum and Bitcoin have both produced eye-watering returns since they launched, and only time will tell if Solana can keep up.

Solana (SOL) has been one of cryptocurrency’s rising stars this year. It’s risen over 11,700% since Jan. 1, which puts it in the top five performing coins so far. But what’s really striking about Solana is that it has continued to trend upward for a number of months. Since July, Solana’s price has hit all-time high after all-time high — even when other parts of the market were falling.

Solana is an extremely fast smart contract cryptocurrency. It was well placed to pick up the slack as investors and developers look for alternatives to Ethereum (ETH), which is struggling with network congestion.

The other top-performing cryptos so far this year are gaming and metaverse tokens. According to CoinMarketCap data, here are two that have outperformed Solana since Jan. 1 at time of writing.

1. Axie Infinity (AXS) — up over 21,500% since Jan. 1

Axie Infinity is the play-to-earn game that’s captured people’s time and attention, especially in the wake of the pandemic. Players can trade, breed, and battle with unique cartoon Axies. They earn AXS and Smooth Love Potion (SLP) tokens in the game, which have value in the real world.

Before blockchain gaming, the rewards you won in a game — whether points or in-game items — stayed in the game. Axie is leading the way in a new type of gaming, with transferable rewards. And in certain countries, people who’ve been struggling economically because of the pandemic have supplemented their income by playing Axie.

2. Sandbox (SAND) — up over 12,300% since Jan. 1

Sandbox is one of several metaverse tokens that have shot up the crypto charts recently. It is a virtual world with its own virtual SAND currency. Players can use SAND tokens to buy land and NFTs. Players can also use Sandbox’s tools to create their own NFTs and games.

In case you’re wondering, NFTs (non-fungible tokens) are tokens that are built into pieces of digital art or certain in-game items. The ownership information is recorded in the token that’s stored on the blockchain, so the items someone buys or builds in Sandbox can be used outside the game.

Will it last?

Those are extraordinary returns, even by the wild standards of cryptocurrencies. But as an investor, it’s important to keep a long term perspective. Solana, Axie, and Sandbox may have performed well in 2021, but can they continue to post strong returns into 2022 and beyond?

For example, Sandbox only shot into the top-100 cryptos by market cap in recent weeks as the idea of metaverses gained traction. It’s an interesting token, but there’s a lot of uncertainty about how the metaverse will develop and whether Sandbox can maintain that price.

On the other hand, if we look at some old favorites across their lifetimes, we find some battle-tested coins that have already grown more than Solana.

3. Ethereum — up almost 150,000% since launch

Ethereum was launched in 2015 and was the first cryptocurrency with smart contract capability. Smart contracts are tiny pieces of code that live on the blockchain and make it possible to build applications and other things.

Solana first started trading in April 2020 and is up over 25,800% since launch. It may have outperformed first-mover Ethereum this year, but it still has a long way to go if it’s to beat Ethereum — which still hosts the lion’s share of applications — over the next five years.

Ethereum is in the process of an upgrade to resolve some of its scalability issues, which should be completed next year. If it can successfully complete its move to Eth2, it will be better placed to keep its top-dog position and compete with newer players like Solana.

4. Bitcoin (BTC) — up almost 70,000,000% since launch

Bitcoin was the first-ever cryptocurrency and remains the crypto king. It has the biggest market cap by a long way and makes up over a third of the total crypto market cap. Bitcoin launched in 2009, but didn’t start trading until July 2010. By the end of that month, 1 BTC was trading at $0.08 — it is now worth around $57,000.

Bitcoin’s price has only risen about 100% since the start of this year. However, the granddaddy of cryptos has delivered over time, which is why some people see it as a form of digital gold.

Higher returns often come with higher risks

All the cryptocurrencies mentioned above are available from top cryptocurrency apps and exchanges. But be aware that chasing massive percentage increases is a high-risk investment strategy. It’s a bit like buying penny stocks — you might see bigger gains than you’d get when investing in big, established companies, but there’s also a much higher chance the stock will collapse. Established cryptocurrencies also carry risk, but they are more likely to stand the test of time.

Solana seems to have cemented its position in the top-10 cryptocurrencies by market cap for now. But bear in mind it was only launched last year. Only time will tell if it grew too fast, and whether it can continue to deliver.

Buy and sell crypto on an expert picked exchange

There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. And to find the one that’s right for you, you’ll need to decide what features that matter most to you.

To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2021. Check out the list here and get started on your crypto journey, today.

About the Author

Emma owns the English-language newspaper The Bogota Post. She began her editorial career at a financial website in the U.K. over 20 years ago and has been contributing to The Ascent since 2019.

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