When Bitcoin was created in January 2009, it ushered in a new era of decentralized finance. It allowed for swifter, safer, and cheaper cross-border transactions. Bitcoin also paved the way for many new cryptocurrencies. There are now over 1,600 cryptocurrencies across large, medium-sized, and specialist exchanges. The top traded cryptocurrencies of 2021 lead the pack.

However, only a small number of these cryptos are truly significant. The most traded digital currencies with the highest liquidity are in a select group. The easiest way to identify the top cryptocurrencies is by their market capitalization and investor interest. Below are some cryptocurrencies that had the highest trading volumes in 2021.

Bitcoin

Bitcoin (BTC) was the first cryptocurrency to emerge. It remains the most valued and widely traded digital currency in the world. Despite its high volatility, investors continue to prefer it. Many view it as a hedge against inflation due to the cap on the total number of Bitcoin tokens in circulation.

Bitcoin was originally intended as a digital payment system, although many financial specialists still consider it too volatile to be used for this purpose. Nonetheless, it remains the most traded and popular cryptocurrency on exchanges. There are different types of Bitcoin markets and Bitcoin price fluctuations continue to have a pronounced impact on the cryptomarket as a whole. It currently has a market cap of $937 billion and a total exchange volume of $1.12 billion.

Tether

Initially known as Realcoin, the stablecoin Tether (USDT) is unique in that it was the first cryptocurrency to bind its market value to that of a regular fiat currency, the USD. All Tether tokens circulating on the market are backed by an equal amount of dollars, earning it the name “stablecoin.” Investors prefer Tether to avoid the extreme volatility of other cryptocurrencies.

Its value peaked in the summer of 2018 when the USDT price reached $1.32. However, Tether doesn’t experience significant price swings and has largely remained close to $1, making it popular among crypto investors. Tether was one of the top-traded cryptocurrencies of 2021, reaching a market cap of $79 billion and a total exchange volume of $59 billion in December 2021.

Ripple

Created in 2012, Ripple (XRP) is unlike many other cryptocurrencies because it relies on consensus protocols rather than on the traditional blockchain mining process. It confirms transactions with the help of bank-owned servers, which makes it less energy-demanding and more cost-efficient than Bitcoin, for example.

Additionally, the consensus mechanisms behind this cryptocurrency facilitate near-instant transactions, with confirmation taking a few seconds only. Throw the lower transaction costs into the mix and you will see why Ripple is so popular among traders and investors. As of December 2021, Ripple has a market capitalization of $85 billion and an overall exchange volume of $3.6 billion.

Ether

The Ethereum open-source network launched in the summer of 2015. It is home to the cryptocurrency Ether (ETH). Ether’s price has increased dramatically since its debut. However, it is still far behind Bitcoin in terms of value. Unlike Bitcoin, Ether was not intended to replace standard fiat currencies.

People trade Ether as an asset, but they also use it to pay for services on the Ethereum platform. This is why Ether is often called a utility cryptocurrency. Since Ether is a relatively young cryptocurrency, it experiences more price fluctuations than Bitcoin.

These fluctuations create opportunities for investors, especially those who want to capitalize on future price movements. Ether remains one of the most popular cryptocurrencies of 2021, with a market cap of $504 billion and a total exchange volume of $1.2 billion.

Solana

Solana, launched in spring 2019, is a new blockchain platform with SOL as its native cryptocurrency. Experienced investors see it as an alternative to Ethereum. Both platforms support smart contracts.

However, Solana has several advantages over its rival, starting with the fact it ensures significantly quicker processing speeds. Transaction costs are also smaller than those for Ethereum. In September 2021, Solana’s native currency SOL reached an all-time high after its value jumped by 12% to $145.

The SOL token consequently knocked off Dogecoin from its position as the seventh-biggest altcoin in terms of market value. With a market cap of $96.1 billion and a total exchange volume of $1.92 billion, Solana ranked as one of the top traded cryptocurrencies of 2021.