Bitcoin (BTC 0.25%)achieved impressive gains in 2021, even though it already was the market's largest cryptocurrency by far. The token's price surged more than 60% for the year, and it's now up more than 4,750% in the past five years.
Bitcoin's current market capitalization of roughly $900 billion is a testament to its ascendancy and staying power, but it wouldn't be surprising to see other tokens put up superior performance in the future. Read on for a look at three top cryptocurrencies that could outpace Bitcoin in 2022 and beyond.
Ethereum's (ETH -1.12%) ether token ranks as the second-largest cryptocurrency, a market value of about $450 billion. Although its market cap is just half that of Bitcoin's, ether significantly outperformed the market leader for the year, posting a gain of more than 400%.
While Bitcoin remains the top dog by a substantial margin, there are signs that Ethereum could be on track to seize the crown. This potential event has been dubbed "the flippening," and it could represent a major shift in the cryptocurrency market. Investor dollars have started heading toward tokens that are backed by application and service features as opposed to tokens that merely function as digital currencies and speculative investment vehicles.
Ethereum's blockchain network provides the foundation that thousands of other cryptocurrencies and blockchain applications are built on top of, and its leading position in the blockchain-services ecosystem has helped its token post stellar gains. The ether token is now up more than 56,700% during the past five years, surpassing Bitcoin by a wide margin in that stretch. That momentum seems likely to continue this year.
Solana (SOL -3.57%) had stunning gains in 2021. Its SOL token skyrocketed more than 10,000%, thanks to a combination of speculative momentum and the network's rise as a launching ground for blockchain-based applications. Like Ethereum, Solana's blockchain serves as a foundation for things such as non-fungible tokens (NFTs) and decentralized finance (DeFi) applications.
Solana is a direct competitor to Ethereum and has a notable advantage: rapid transaction-processing capacity. While Ethereum's blockchain can process transactions at a rate of about 13 per second, the Solana network can handle as many as 50,000 per second. Solana's potential has pushed the market capitalization for its token to roughly $54 billion -- making it the fifth-biggest cryptocurrency -- although its value still is dwarfed by that of Ethereum and Bitcoin.
If demand for DeFi applications continues to grow, Solana's transaction-processing capabilities could help it attract users and push its token price significantly above current levels. With its much smaller size and fast-growing application network, Solana could be primed to again significantly outperform Bitcoin in 2022.
3. Basic Attention Token
While Ethereum and Solana offer blockchain-based networks for carrying out smart contracts and building and executing applications, the value case for Brave Software's Basic Attention Token (BAT -1.76%) is quite different. Brave provides a web browser that allows people to keep a much tighter lid on their personal data and block advertisements across the internet.
If users opt to allow ads from Brave's partners, they can earn BAT, meaning ad viewers receive compensation for their attention and time -- a contrast to current business models in which advertisers pay the platforms for access to viewers. The company also offers a privacy- and security-focused crypto-wallet service, allowing storage of cryptocurrencies through its platform.
In addition to its compelling services, BAT's relatively small size is another reason that I think it stands a good chance of outperforming Bitcoin in 2022. With a market cap of about $1.9 billion, the token ranks as just the 69th largest overall cryptocurrency. Like Bitcoin, there's a hard cap set on the number of BAT tokens that will ever be in circulation. This sets up a potential supply scarcity that could power big gains for the digital currency if the Brave browser, crypto wallet, and new services continue to gain users.