What a year for the coins.
Few could have predicted that Bitcoin’s bull run—which began at the end of 2020 and pulled the entire market up by its bootstraps—would have collapsed and annihilated virtually all of its gains.
Still, in a year that saw an industry-wide liquidity crisis catalyzed by the collapses of Terra’s UST stablecoin, FTX’s bankruptcy, and the ensuing contagion, some observers might say they’re lucky to still be standing.
According to data from CoinGecko, Bitcoin (BTC), the world’s biggest coin by market cap, trades at a 75% discount from its all-time high of $69,045, posted on November 10, 2021. It has also dropped more than 60% from its price of $46,320 on New Year’s Day.
The second largest cryptocurrency, Ethereum (ETH), which began the year at $3,686, trades at $1,215 as of December 21.
Credit has to be given where it's due, and the two market leaders were not the sturdiest crypto assets this year. Decrypt consulted data from across the industry to round up this year’s best-performing coins, DeFi tokens, and equities for your reading pleasure (or pain).
Given the wild unknowns of the market, this list certainly does not constitute investment advice, but it does throw light on not only some of the biggest stories of the year but also perhaps some of the more surprising.
For the second year running, Lido Staked ETH has held the throne as our top DeFi token of the year on a per market capitalization basis. It’s also proven the most robust. It began the year with a market capitalization of $5,985,253,189 and now heads into Christmas at $5,793,073,401, meaning its corner of the market has only contracted by about 3%.
What is it
Lido is a staking protocol that allows people to stake any amount of ETH through smart contracts–automated self-executing financial contracts. Users earn yield in stETH a token pegged to ETH that can be redeemed 1:1 for Ethereum. The token can also be lent, staked and traded for other tokens throughout DeFi.
It’s not just ETH either; users can also stake Solana, Polygon, Polkadot, and Kusama.
Lido was at the center of controversy this year after crypto lender Celsius froze withdrawals to stop a bank run that could have further depleted the price of stETH, after it slipped its peg by 6% back in June. It came to light that Celsius had staked customer funds on Lido. Similarly, bankrupt crypto hedge fund Three Arrows Capital (3AC) cited Lido as one of three trades that ultimately blew up the company.
Despite these controversies, stETH's performance has also been helped along this year in part due to users rushing to stake their ETH ahead of this year's merge event, which jettisoned Ethereum from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) mechanism.
Of the total 15.7 million in ETH deposited across all staking platforms, including Coinbase and Binance, roughly 30% of those tokens have been staked on Lido and converted to stETH.
How Ethereum Stakers on Lido Finance Are Trading the Merge
Lido Token Jumps 24% as Staked Ethereum Slowly Repegs
Dai (DAI) down 42% ($8,945,308,696 to $5,178,770,761)
Uniswap (UNI) down 48% ($7,753,293,079 to $3,987,950,916)
While various outlier cryptocurrencies made greater gains this year, for this category and the next, we stuck with cryptocurrencies that are in the top 100 by market cap. Given the flash-in-the-pan nature of many tokens, a high market cap is a good indicator of how many people have believed in the project enough to open their wallets for it.
Trust Wallet climbed 116% from $0.71 on New Year’s Day to a current price of around $1.54 as of December 21.
What is it
Trust Wallet is a governance token used to vote on new developments for the Binance-owned self-custody wallet. After the collapse of various centralized crypto lenders and exchanges this year, consumer and industry conversations turned firmly towards security, in particular towards self-custody solutions, like decentralized exchanges and self-custody wallets, which also include hardware wallets.
Binance acquired Trust Wallet back in 2018; its CEO, Changpeng Zhao, later shilled the project and helped pump the price of the wallet’s native token after FTX’s collapse.
Trust Wallet Token Soars 47% as Binance CEO Shills Self-Custody Solution
GMX (GMX) up 103%, LEO Token (LEO) up 6.5%
Dogecoin didn’t fall off quite as steeply as its nearest rivals. This year’s top memecoin depreciated by about 58%, from $0.17 at the start of the year to around $0.07 as of December 20.
What is it
Dogecoin was created by software programmers Jackson Palmer and Billy Markus in 2013, who intended the project to be a tongue-in-cheek satire of the then-emergent craze of minting altcoins that have little value beyond mere novelty symbolism. The cryptocurrency picked up a rabid fanbase when Bitcoin began its bull run at the end of 2020. They’re known colloquially as the “Doge Army.”
The coin’s avatar is the iconic chubby Shiba Inu dog, whose face rose to prominence as a meme accompanied by adorable phrases in broken English, like “Much wow” and “Very impress.” It has since spawned waves of copycat coins, like the top 100 cryptocurrency Shiba Inu (SHIB) and has as its most famous fan and “Dogefather,” the Tesla, SpaceX and Twitter CEO Elon Musk, whose Doge-shilling tweets often pump the price.
Elon Musk and Crypto: No One Man Should Have All That Power
Shiba Inu (SHIB), down 75%, ($0.00003345 to $0.00000825)
Dogelon Mars (ELON), down 81% ($$0.00000156 to 0.000000296875)
SQ stock has decreased 56%, down from $141.54 at the start of January to $61.41 per share as of December 20.
What is it
Block, Inc, formerly known as Square, is a crypto-friendly payments company run by former Twitter CEO Jack Dorsey. Dorsey is an avid Bitcoin bull and, through the company, has spent hundreds of millions on Bitcoin so far. He has also avidly defended Bitcoin against criticism of the environmental impact of the network’s mining operations. Understandably, crypto companies fared little better than cryptocurrencies this year, with most of them in the red since the start of January.
Jack Dorsey's Block Reports $36M Impairment Loss on Bitcoin Holdings
Block's Bitcoin Revenue From Cash App Hit Nearly $2 Billion in Q4
Coinbase (COIN) fell 85% (from $232.33 to $35.12)
MicroStrategy (MSTR) fell 64.5% (from 482.95 to 171.52)
Visa’s stock price began the year at $216.96, and it only depreciated 4.9% to hit $206.28 as of December 21.
What is it
Visa is no stranger to the world of finance, leading the payments industry with Mastercard. Besides previous occasions to rope in crypto projects, this year was a particularly active one in terms of the firm turning to decentralized money. In October, for example, the payments giant filed several trademark applications which hinted at a cryptocurrency wallet, launching non-fungible tokens (NFTs), and much more.
On December 19, Visa announced its sustained interest in the industry despite getting burned by the collapse of FTX. “We want to have an opportunity to actively contribute to technical developments happening in the crypto ecosystem,” Catherine Gu, Visa’s Head of CBDC and Protocols, told Decrypt. “The best way to do that is learning by doing—actually getting deeper into Web3 infrastructures and blockchain protocols, areas I think are going to be really important for payments.”
Visa, PayPal, Western Union Among Fall Flurry of Crypto Trademark Filings
Visa Pulls Plug on FTX Partnership, Will Wind Down Debit Cards: Report
Western Union Company (WU) fell 28% (from $19.01 to $13.68)
Canaan Inc (CAN) stocks fell from $4.67 when markets opened this year on January 3 to $2.14 as of December 21, a depreciation of 54% in what has been a very tough year for mining companies.
What is it
China-based Canaan Inc. was one of the first movers in crypto. Founded in 2013, Canaan manufactures high-performance chips and other hardware for crypto mining rigs. It’s a popular company—its products are sold to over 150 countries—and it also recently launched a new line of mining rigs called the Avalon Made A13 (“A13”) Series. In 2018, it released what it claims was the world’s first 7-nanometre ASIC chip, setting a new standard for energy efficiency.
Bitcoin Mining Company Spending $10M to Buy Back Shares
Bitcoin mining firm Canaan faces investor suit over $90 million IPO
Riot Blockchain (RIOT) fell 81% (from $20.36 to $3.83)
Hive (HIVE) fell 85% (from $11.45 to $1.77)
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.