What goes up can come down. We've seen that happen toward the end of this year with several cryptocurrencies.
However, those declines weren't enough to wipe out jaw-dropping returns in many cases. And even with the pullbacks, some of the impressive performers seem likely to continue their winning ways. Here are three cryptocurrencies that delivered fivefold gains or more in 2021 and are still worth buying now.
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1. Solana
Solana (SOL 0.86%) has generated a monster gain so far in 2021. The cryptocurrency is up nearly 124 times -- and that's after declining 30% from its high point over the past few weeks.
The developers of Solana claim that it's "the fastest blockchain in the world." There's no question that Solana is fast. It can process up to 65,000 transactions per second. But that's a theoretical number. In reality, Solana usually handles close to 3,000 transactions per second -- which is still much faster than other top blockchains.
Solana also bills itself as "the fastest growing ecosystem in crypto." This ecosystem currently includes more than 400 projects.
These advantages, plus a super-low transaction cost, could enable Solana to gain more momentum in the new year. It's already the fifth biggest cryptocurrency based on market cap, according to CoinMarketCap. With Solana now grabbing the attention of institutional investors and hedge funds, this cryptocurrency could just be getting started.
2. Avalanche
With only a few days left in the year, Avalanche (AVAX 0.04%) has delivered a return of more than 39 times. In the process, the digital token has catapulted into the No. 10 spot for cryptocurrencies based on market cap.
How has Avalanche achieved such success? The credit goes to its underlying blockchain technology. Avalanche features three integrated blockchains that can process more than 4,500 transactions per second. It also has a super-fast time to finality (the time required to irreversibly add a transaction to the blockchain) of less than two seconds.
These advantages have attracted increasingly more developers to the Avalanche platform. Its ecosystem currently includes nearly 160 projects. Accounting and consulting firm Deloitte will soon be on the list, with plans to develop a disaster recovery platform on the Avalanche blockchain.
Could buying Avalanche make you a fortune in the coming year? I think it's quite possible. If more developers jump aboard the bandwagon, the price of the AVAX native token will continue to move even higher.
3. Ethereum
Ethereum (ETH 0.81%) hasn't produced the mind-blowing returns that Solana and Avalanche have this year. However, I doubt that any investors are complaining about the cryptocurrency's gain of more than 460%.
What's remarkable about Ethereum's solid performance is that it was made despite several challenges. Some developers have switched to other blockchains because of Ethereum's sluggish transaction speed and high gas fees.
But a major upgrade is on the way for Ethereum. This upgrade will convert the blockchain to a proof-of-stake model, significantly increasing transaction speeds and lowering transaction costs. The first phase of this upgrade has already been completed. The second phase is planned for 2022 with the third phase slated for 2023.
With the promise of these big improvements in the not-too-distant future, Ethereum should easily maintain its position as the second-largest cryptocurrency based on market cap. And it will probably gain ground on the No. 1 cryptocurrency -- Bitcoin.
