The Best Cryptocurrencies of 2021: How Top Performers Reshaped the Crypto Market

Looking back at 2021, it was undoubtedly a transformative year for the best crypto assets, when the market capitalization surged from under $800 billion in January to $2.2 trillion in December. Bitcoin and Ethereum, riding on momentum from 2020’s gains, reached historic peaks during this unprecedented bull run. While most investors tracked Bitcoin’s 66% annual gains and Ethereum’s impressive 418% return, a wave of lesser-known tokens stole the spotlight, delivering returns that seemed almost too good to be true.

What made 2021 remarkable wasn’t just the bull market—it was the emergence of three distinct narratives that drove the best crypto performers to astronomical gains. These themes revealed how quickly investor sentiment could reshape the digital asset landscape, and how volatile fortunes in the crypto space truly were.

Metaverse Tokens: The Best Performers of 2021

The metaverse emerged as the hottest segment in 2021, especially after Meta’s rebranding from Facebook. This vision of virtual worlds captivated investors, and two gaming-related projects became the best-performing assets of the year.

The Sandbox (SAND) claimed the top spot with a mind-bending 16,265% annual surge, while the play-to-earn gaming phenomenon Axie Infinity (AXS) followed closely behind with 16,160% gains. Both tokens reflected investor optimism about virtual leisure and blockchain-based gaming. Axie Infinity particularly captured global attention when it became a lifeline for players in the Philippines and Venezuela, where unemployment drove many citizens to earn income through gameplay.

Decentraland (MANA) also made the year’s best-performer list, ranking seventh with nearly 3,943% gains. The entry of institutional players marked a turning point—major brands like Adidas and Under Armour announced partnerships with these metaverse platforms, signaling mainstream acceptance.

However, the story shifted dramatically by 2026. SAND has corrected by 71.76%, AXS by 63.22%, and MANA by 65.42%, underscoring how speculative the 2021 metaverse boom had become.

Layer 1 Alternatives: A New Generation of Best Crypto Performers

The second major theme of 2021 centered on “Ethereum killers”—alternative Layer 1 blockchains designed to overcome Ethereum’s notoriously high gas fees. These networks attracted massive capital flows as traders sought faster, cheaper transaction alternatives.

Polygon (MATIC), an Ethereum sidechain, delivered the third-best performance with 14,496% annual gains. Terra (LUNA) claimed the fourth spot with 13,808% returns, briefly becoming the second-largest DeFi ecosystem, buoyed by demand for its TerraUSD stablecoin. Fantom (FTM) surged 13,007%, while Solana (SOL) climbed 9,374%, and Avalanche (AVAX) gained 2,787%.

These best crypto performers in 2021 reflected a fundamental shift—investors were actively shopping for alternatives, betting that Ethereum’s dominance would be challenged. Yet like the metaverse tokens, most have since retracted considerably. Terra’s LUNA fell 71.76%, Fantom lost 38.83%, Solana declined 38.83%, and Avalanche dropped 57.37%.

Meme Coins: Speculative Best Bets of 2021

While serious traders debated technical innovations, a retail-driven revolution unfolded around meme coins. Dogecoin (DOGE), boosted by Elon Musk’s social media endorsements, reached an all-time high of $0.74 and delivered 2,943% annual returns. Later in the year, Shiba Inu (SHIB)—a Dogecoin derivative—captured the speculative wave with 1,608% gains, taking the tenth-best-performing slot.

Meme coins represented pure retail sentiment, where entertainment value competed with fundamentals. Yet the 2021 boom proved short-lived: DOGE is down 52.62% over the past year, and SHIB has declined 56.11%.

From Boom to Reality: Where the Best Crypto Performers Stand Today

Reviewing 2021’s best-performing cryptocurrencies reveals an important lesson about timing and speculation. While Bitcoin has weathered the downturn more gracefully, declining only 22.78% over the past year and holding around $68.56K, most of 2021’s explosive performers have faced significant corrections.

The year 2021 proved pivotal—it showcased how quickly market themes could shift investor capital and how quickly fortunes could reverse. The best crypto assets of 2021 weren’t necessarily built to last, but rather captured a specific moment in time when institutional players, retail enthusiasm, and technological narratives converged. Understanding 2021’s performance patterns remains essential for evaluating how the crypto market evolves through different cycles.