Which are the hottest names in the crypto space this year?

Cryptocurrencies have been selling like hot cakes this year. It has been one of the most talked-about asset classes, of late. From Tesla Inc (NASDAQ:TSLA) CEO Elon Musk-backed rally of the meme cryptocurrency – Dogecoin, to the controversy surrounding the environmental concerns about Bitcoin mining – there hasn’t been a single week this year when an update related to cryptocurrency hasn’t hit headlines.

And that is not it. The volatility in prices of cryptocurrency has been huge – and more worryingly, quick. This would mean that investors planning a long-term position in digital currencies would be skeptical, owing to the huge price fluctuations. Some asset managers, in private, have been comparing the fluctuations in cryptocurrency prices to the swings of a golf club.

While many of the cryptocurrencies would have seen all their year-to-date gains being wiped off by this time, there are some that are still holding the fort. There could be many other factors that can determine the choice of an investor. If an investor is looking for more security, he/she would opt for the higher market capitalisation – where Bitcoin is the leader, followed by Ether, XRP, Cardano and Stellar. However, if an investor is looking for stability, his or her obvious choice would be Tether – the cryptocurrency that has mostly remained flat. On the other hand, if an investor is staring at easy liquidation at the time of selling the digital asset, he/she may opt for a cryptocurrency that has high volumes – led by Ether (at the time of filing this copy), followed by Bitcoin, Bitcoin Cash, Litecoin and Chainlink.

But, in the current scenario, where global liquidity is flush, most, if not all, investors are chasing high returns. The better the returns, the better the chances of investors buying the cryptocurrency. The demand, currently, seems to be directly proportional to the return being offered by each digital asset. So, here is a list of the hottest cryptocurrencies this year:

Image Source. © Kalkine Research

1. Dogecoin: This meme cryptocurrency is the perfect example of the phrase “a joke that became real”. Initially tipped as a meme, the cryptocurrency started surging after Mr Musk started publicly backing it, on his social media profiles. Even as the digital currency has seen two-thirds of its early year gains being wiped off, it is still giving investors a year-to-date return of mind-boggling 4,484.52%.
2. Ether: This is the world’s second largest cryptocurrency, and one of the only two to have crossed US$100-billion mark in market capitalisation. Faster and more flexible than Bitcoin, it has many advantages that might have probably driven its rally over the years: it runs smart contracts, it's a DeFi platform and it has an upgrade in the pipeline. As on date, the cryptocurrency has rallied 212.35% on a year-to-date basis.
3. XRP: This is the world’s third largest cryptocurrency in terms of market capitalisation. The digital currency has rallied 188.80% on a year-to-date basis. The cryptocurrency had peaked in sync with world’s largest cryptocurrency – Bitcoin.
4. Bitcoin Cash: Launched in 2017 by forking the Bitcoin blockchain and changing the size limit of blocks added to the blockchain, it was supported by few high-profile early bitcoin investors like Roger Ver. Four years later, in 2021, it has outperformed Bitcoin, and is giving year-to-date return of 44.06%.
5. Bitcoin: It is the king, when it comes to cryptocurrencies – at least for the foreseeable future. With a value three times that of the second-placed Ether, this cryptocurrency is the world’s largest by market cap. Being a pioneer in digital currencies, its name is synonymous with cryptocurrency. Despite witnessing a slump after environmental concerns over its mining, Bitcoin is still managing to give a year-to-date return of 14.36%
6. Litecoin: It was launched in late 2011 by former Google and Coinbase engineer Charlie Lee – who copied the Bitcoin codebase, increased the total supply, and then, changed the speed at which new blocks are added to the blockchain. This cryptocurrency is the world’s fourth largest when it comes to volumes and has, till now, given a year-to-date return of 8.34%.
7. USD Coin: It is an Ethereum-based stablecoin launched in September, 2018. It is redeemable on a 1:1 basis for US dollars and is issued by regulated financial institutions and backed by fully reserved assets – audited by accounting firm Grant Thornton LLP every month. Since it’s a stablecoin, there hasn’t been much of swing like others in this list, yet it’s up 0.14% on a year-to-date basis, even as cryptocurrencies are witnessing a massive bearish trend in past two months.