Here’s how much money you’d have if you invested $1,000 in 4 of the top cryptocurrencies this year.
Cryptocurrency had a fantastic year in 2021, with digital currencies like bitcoin and dogecoin achieving all-time highs and making investors millionaires. The whole crypto market momentarily reached $3 trillion in value, and the rising popularity of digital assets such as nonfungible tokens, or NFTs, has helped to mainstream the once-niche technology.
While the technological advancement and scarcity of tokens like bitcoin and dogecoin differ, both enjoyed substantial growth in 2021, along with other leading coins. Check out what a $1,000 investment in four prominent cryptocurrencies would be worth now if you made it at the start of the year. (All prices are current as of December 28 at 3:30 p.m.)
But take that with a grain of salt: when it comes to cryptocurrencies, keep in mind that past success is no guarantee of future results, and experts advise investors to only invest as much as they are willing to lose.
If you do decide to get into crypto, try dollar-cost averaging by spreading it out into smaller purchases over time rather than making a large purchase all at once.
#1 Bitcoin
Price on Jan. 1: $29,290
Price on Dec. 28: $47,795.40
At the beginning of the year, a $1,000 investment in bitcoin at a price of $29,290 would have purchased you 0.034 tokens, which would be worth around $1,632 at the current price of $49,150 per coin on Tuesday afternoon.
The world's largest cryptocurrency by market capitalization had a successful year in 2021, with a 65 percent increase in value between January 1 and late December. It reached a market capitalization of $1 trillion for the first time in February, but has since dropped to around $900 billion.
#2 Ether
Price on Jan. 1: $730.30
Price on Dec. 28: $3,816.67
Over the last year, the value of a single ether, the Ethereum blockchain's token, has increased by more than 400%. A $1,000 ether buy on Jan. 1 for $730.30 would now be worth around $5,226.16 at the price of $3,816.67 on Tuesday afternoon.
Ethereum supporters claim that the blockchain will become more scalable, safe, and long-lasting following the Eth2 upgrade in 2022, when the network will switch to a proof-of-stake (PoS) paradigm. Ethereum currently uses a proof-of-work architecture, in which miners compete to solve hard problems in order to validate transactions. Because it necessitates a large amount of computer power, this paradigm is regularly chastised for its environmental impact.
Users will be able to validate transactions based on how many bitcoin they own, rather than the energy-intensive mining equipment that are now in use.
#3 Solana
Price on Jan. 1: $1.53
Price on Dec. 28: $181.18
At Tuesday's price of $181.18, a $1,000 investment in the Solana blockchain's native cryptocurrency SOL at the beginning of 2021, when one coin cost $1.53, would have risen to nearly $118,418.
Solana, which only launched in 2020, has grown by more than 13,800 percent in the last year and now has a market cap of over $57 billion, making it the fifth largest cryptocurrency. Solana is viewed as a rival to Ethereum's blockchain.
Solana was created by its founder, Anatoly Yakovenko, to allow the production of decentralised applications, or dapps, and smart contracts, which are collections of code that carry out a set of instructions on the blockchain.
#4 Dogecoin
Price on Jan. 1: $0.0056
Price on Dec. 28: $0.18
If you invested $1,000 in dogecoin at $0.0056 per coin at the start of the year, it would now be worth $32,142 at the current price of 18 cents. Not bad for a digital token that began as a joke inspired by a meme.
In the first half of 2021, the cryptocurrency, whose popularity was fuelled in part by Elon Musk, rose by as much as 12,000 percent. The value of dogecoin, on the other hand, dropped in the second half of the year.
