Despite the downturn in the year-end, which saw Bitcoin lose 19% of its value, 2021 was a banner year for cryptocurrencies and crypto enthusiasts around the world. Bitcoin roared past $67,000 in November to register a fresh all-time-high and with the rise of altcoins, such as Binance and Solana, the cryptocurrency markets reached a $3 trillion market cap for the first time on 9 November.
The crypto hype train hit critical levels in 2021 as PayPal, Mastercard and even El Salvador – an entire country – brought Bitcoin under the fold of institutional and national adoption by accepting it as an official form of payment and legal tender.
As further growth is on the cards for cryptocurrency markets in 2022, and with a slew of new projects springing up, we take a look at the best performing coins and share our picks for the ones to keep on your watchlist as well as those that are more likely to fade into obscurity.
So, here are the top 4 cryptocurrencies we expect to soar in 2022 and beyond:
Solana (SOL)
Solana is now the fifth-largest cryptocurrency with a market cap well above $60 billion. Solana’s mind-blowing rise culminated in gains upward of 10,000% - jumping from $1.50 to $260 by November 2021. Praised for its rapid transaction processing and inexpensive fees compared to other blockchains like Bitcoin and Ethereum, Solana is also featured on this list due to its growth prospects.
Solana is leading the development and implementation of decentralized apps and smart contracts with more than 400 projects currently on its network.
Avalanche (AVAX)
Avalanche is another project that boasts faster transaction processing, and its smart contract platform is considered a viable alternative to the Ethereum network. The coin skyrocketed by 3,800% in 2021 to become one of the top cryptocurrencies by market capitalization, which currently stands at $25 billion.
Avalanche’s rise to prominence came at the last quarter of 2021, following Deloitte’s partnership with the creators of the altcoin in an effort to build a platform, which will facilitate the demonstration of federal funding to state and local governments during natural disasters and public health emergencies. With the increased credence given to the AVAX coin, we anticipate the token to soar in 2022.
Polkadot (DOT)
Polkadot’s main use case is to enable cross-blockchain transfers thereby uniting multiple blockchain seamlessly. It started 2021 at $9 and is now hovering around $30, bringing its market capitalization close to $26 billion. The DOT token may not currently match the speeds of Solana and Avalanche, however, its scalability potential and growing developer community could position Polkadot to eclipse all other blockchains.
Also, T-Systems MMS, a subsidiary of Deutsche Telekom, one of the largest telcos in Europe, announced in late December 2021 that it will participate in the Polkadot network as a validator and invested a significant amount of capital in the token.
Decentraland (MANA)
If you are looking for a Metaverse play in 2022, Decentraland is one of the most exciting platforms that started gaining traction as of late. Decentraland is a game, which only came into the spotlight after moving into a three-dimensional virtual world where users can conduct business as well as buy and sell land using the MANA token.
Early Decentraland backers enjoyed returns of 4,000% to date and its currently trading at a modest $3.
The cryptos to avoid
With cryptocurrencies staged to disrupt the very fabric of the global financial system and a slew of duds and scam coins crawling under the woodwork, investors should focus on the ones with the backing of a robust developer community and real-world applications. Below are some of the coins that appear to be lacking in this respect, and therefore, we believe should be avoided in the new year:
Shiba Inu (SHIB)
Going by the numbers alone, Shiba admittedly was one of the best performers of 2021, gaining more than 50,000% in 2021 – at least before crashing spectacularly over the year-end. SHIB is now down 60% from its record high registered in October 2021 and only a tweet by Tesla Elon Musk himself would drive another rally.
The downside of the meme coins is the fact that they are merely speculative and driven solely by hype since they lack any real-word applications. Rife with volatility and risk due to its highly concentrated ownership, Shiba seems lacklustre compared to the much more promising coins listed above.
Dogecoin (DOGE)
The original meme coin also fails to offer any real value and while it enjoyed a 3,000% run-up in 2021 – reaching an all-time-high of $0.75 in March – it’s now trading at $0.16, according to Coinbase. Dogecoin lacks support for decentralized applications and smart contracts, and it also lacks the artificial scarcity of its peers, with a total supply of 130 billion Dogecoin and more than 5 billion added every year.
Meanwhile, 10 Dogecoin owners hold more than 40% of all Dogecoin in circulation which means they can easily manipulate the price by selling their coin.
Aim for value, ignore the hype
Cryptocurrencies carry the potential to change the way people conduct business and transfer funds across borders - with greater efficiency, speed and much lower costs. However, the industry is becoming increasingly more volatile as new investors flock to enter the market, and only those who have the patience to sustain some losses due to the dramatic price fluctuations will survive.
Always keep in mind that not every project is worthy of your attention, especially those without any real use cases, and that even those that seem promising could eventually fall out of grace and be replaced by the new coin on the blockchain.
