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Stocks Rise as Crypto Celebrates a Strong 2021

By Dan Caplinger – Dec 27, 2021 at 9:43AM

Key Points

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Gains for major digital assets were on the rise, capping a great year for the space.

Wall Street came back from the Christmas holiday in a good mood, and major market benchmarks looked poised to make what could potentially be a record run in the last week of 2021. As of just before 9 a.m. ET, futures contracts on the Dow Jones Industrial Average (^DJI 1.26%) were up 82 points to 35,914. S&P 500 (^GSPC 1.44%) futures rose 17 points to 4,733, and Nasdaq Composite (^IXIC 1.74%) futures moved upward by 76 points to 16,375.

Despite the upward trajectory on the last Monday of the year, most stocks were little changed to start the week. However, cryptocurrencies  were generally higher, putting a cap on what has been a fine 2021 for the digital asset class. Here are some of the crypto tokens making news today, along with some commentary on how top assets have performed throughout the year.

Person on couch looking at a chart on a laptop.

Image source: Getty Images.

Solid gains for top digital assets

Gains for cryptocurrencies started at the top. Bitcoin (BTC 1.13%) moved higher by almost 3%, topping the $51,000 mark and aiming to reverse a slump for the leading token that has lasted throughout much of the month.

Overall, Bitcoin has seen solid gains, having started 2021 near $29,000 and rising roughly 75% year to date. However, many Bitcoin investors are disappointed that since jumping to an all-time high of near $69,000 in early November, the cryptocurrency gave up as much as a third of its value before bouncing back. Nevertheless, others note that crypto volatility is a staple of the asset class and major advances have only followed big declines.

Ethereum (ETH 0.95%) saw smaller gains on Monday, rising about 1%. However, Ethereum's year-to-date gains have been much more impressive, with the token starting the year below $740 and currently fetching around $4,100, for a gain of more than 450%.

Investors have liked the fact that so many major crypto assets use the Ethereum network as a framework, as it bodes well for continued demand for ether despite complaints of high prices of conducting transactions over the network. A new upgrade could also address some of the concerns people have about Ethereum going forward.

Bigger boosts for crypto disruptors

Investors found larger gains in the crypto universe on Monday from other assets. Cardano (ADA 4.86%) rose 9%, while Polkadot (DOT 3.38%) gained 10%. Chainlink (LINK 3.52%) and Uniswap (UNI 2.53%) also moved higher, with gains of 8% and 13%, respectively.

Many see Cardano as an Ethereum-killer, with its origins coming from former members of the Ethereum Foundation. Starting the year at $0.17, Cardano has risen about 800% in 2021, as many see its potential to be more sustainable and friendlier to the environment than Bitcoin and Ethereum. Similarly, Polkadot has gone from $9.30 to $32.52, rising 250% in 2021 on hopes of capitalizing on demand to run different blockchains within a single network.

Chainlink and Uniswap have had more of an up-and-down year. Chainlink has roughly doubled in price in 2021, as interest in its capacity to link up data from outside sources to verify smart contracts has risen. News that former Alphabet CEO Eric Schmidt would be a strategic advisor for Chainlink Labs helped propel interest in the token earlier this month.

Uniswap's gains for the year are approaching 300%, as the decentralized exchange announced recently its success in moving its contracts to the Polygon network in order to reduce costs. Investors like the alternative that Uniswap offers, in comparison to more centralized exchanges like Coinbase.

Keep your eyes on crypto

There are plenty of opinions about how cryptocurrencies will do in 2022. Some predict massive gains, while others believe the digital asset class is due for a downward move. Either way, though, more investors are paying attention to crypto than ever before, and that's likely to sustain interest, regardless of the short-term direction crypto prices take.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Dan Caplinger owns Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns and recommends Alphabet (A shares), Alphabet (C shares), Bitcoin, Chainlink, Coinbase Global, Inc., and Ethereum. The Motley Fool has a disclosure policy.

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