Cryptocurrencies always capture the media’s attention when a token’s value increases by a few thousand per cent. Indeed, the Bitcoin bull run of 2017 was fuelled, in part, by an initial price surge and continuous coverage by the media. The general public soon adopted a FOMO (fear of missing out) mindset and jumped on the bandwagon. This trend has played out, albeit in a less significant way, multiple times since 2017. However, for all the attention cryptocurrencies such as Bitcoin attract, there are other assets out there.
From a price perspective, the value of Bitcoin increased 89% between January 1, 2021, and October 11, 2021 (£21,193 to £40,168). That makes it a tempting asset to invest in; however, we also know it’s volatile. For example, from its peak in April (£47,240), Bitcoin’s price dropped 53% to £21,869 in July. For a novice investor looking to make long-term gains, these types of swings can be too much to bear. Indeed, for those looking to invest in their futures via stocks and shares ISA, cryptos aren’t the way to go. Firstly, ISA rules don’t allow you to add cryptocurrencies to your portfolio. However, different products such as ETFs and US real estate investment trusts (REITs) can go within the ISA wrapper. Secondly, the volatility may be too much for people wanting to use a low-risk investment strategy.
That’s important. The benefit of a stocks and shares ISA is that investments made within your annual allowance (£20,000 in 2021/2022) can grow free of income tax and capital gains charges. Therefore, the aim here is to establish long-term growth. Cryptos don’t always suit this strategy. So it pays to look at the best-performing stocks of the year and consider adding those to your stocks and shares ISA. Although the data is constantly changing, some of the best-performing stocks of 2021 (as of October) were:
AMC Entertainment Holdings
This Kansas-based entertainment company is listed on the New York Stock Exchange, and, in June 2021, it had notched up year-to-date gains of 2,159%. Since then, its share price has pulled back slightly, but it remains above the $37 mark, which is notable considering it was below $3 in 2020. The entertainment industry is starting to rebound, and AMC is one of the biggest companies in the market.
The biotechnology company has been one of the leading lights during the recent pandemic, which helped its share price in 2021. In addition, a bull run in October saw returns in Moderna top 217% for the year. Given that medical technology and vaccines are likely to remain a hot topic for many years to come, there’s a chance that Moderna could be a sound investment.
As one of the leading cybersecurity companies globally, Darktrace has the potential to be a solid long-term holding. Founded in 2013, Darktrace is best-known for its work on artificial intelligence (AI) within the security sector. Full-year growth in 2021 was 62.1%, and, in October 2021, its share price was up more than 28%, from £6.44 to over £8.30. Since it was listed on the London Stock Exchange in April 2021, its share price has increased by 172%.
Those are three of the best-performing stocks in 2021, but, as is always the case, nothing is guaranteed. This year’s performances may not be replicated. However, what they demonstrate is that generous returns are possible outside of the cryptocurrency space. Even though there is some allure to Bitcoin price spikes, it’s not the only asset out there making big moves. That’s something to consider if you’re looking to use financial products such as stocks and shares ISAs and cryptos aren’t an option.