For the past year, Ethereum has been on a winning streak in outperforming the world-renowned cryptocurrency, Bitcoin. Although the altcoin is seven years younger than Bitcoin, it has already experienced much success during its time, so much so that its returns on investment are now more than Bitcoin’s.
This has been a recurring situation since Ethereum became a popular blockchain, and it appears that it was able to bring its A-game through the end of 2021 with an outperformance of 400%.
Ethereum Surpasses Bitcoin
Many cryptocurrencies hit new all-time highs throughout 2021. Of course, Ethereum and Bitcoin investors also benefited from these rallies too. The various crypto assets increased by 100% at the very least at some point within the year.
However, when comparing this year’s performance between Ethereum and Bitcoin, the former undoubtedly was more successful this year. For one thing, Ethereum had a multi-year range breakout on the ETHBTC pair. This breakout left a mark on the market as one of the biggest trends of 2021.
Looking at it from a year-to-year perspective, Ethereum grew by almost 500% in 2021. On the other hand, Bitcoin only increased by 95% around the same timeframe. This year marks the widest performance gap in five years for the two popular assets, with the rivalry going back as far as 2015 during ETH’s initial launch.
Ethereum has since proven itself to be a worthy competitor to Bitcoin, an asset that we shouldn’t take lightly in this unpredictable market. And it’s primarily thanks to its consistent outstanding yearly performances that more and more investors have been adopting it.
Nevertheless, Ethereum is still far behind Bitcoin in market cap even though it continues to outperform. At present, Bitcoin’s market cap is around $1 trillion, while Ethereum’s is only at $490 billion. As you can see, there’s a massive gap between these two numbers.
Layers 1s Are the Stars of the Year
That said, Ethereum isn’t the only crypto that has outperformed this year. Although Ethereum is undoubtedly the most renowned layer 1s, other digital assets have surpassed Ethereum.
2021 has seen these Layer 1 protocols grow so much, especially since NFTs and decentralized finance (DeFi) gained traction and boomed in popularity. These successful networks include Fantom, Solana, Harmony, Terra Luna, and Avalanche.
These protocols dared to go against the big names and didn’t lose. So much so that their excellent performance overshadowed that of Ethereum’s.
In only a year, these Layer 1 protocols took a significant amount of market share from Ethereum, and they’re expected to continue to do the same in 2022. These networks have grown so much in various ways, and we believe that they won’t be going away anytime soon.
The networks’ native tokens have also seen growth throughout the year, especially since more people have adopted the protocols. Because of that, their tokens’ prices have skyrocketed and reached new all-time highs. This shows that overall, the real winners of the year are the Layer 1s.
