Altcoins are cryptocurrencies launched after the success of Bitcoin, which usually act as its improved alternatives. The more people around the world use these currencies, the higher their value will be, which means it is better to purchase crypto as soon as possible. So, is it worth investing in altcoins in 2022, and why? If you are seriously puzzled by this question and have learned enough about what a virtual currency is and how it works, then the answer is yes!
At the same time, it is important to take into account that cryptocurrencies remain assets with increased risks for investors. At the same time, having significant experience in investments, you can earn or invest in crypto prospects. You need to invest in the digital currency that meets your needs, conditions and based on what you plan to get from it. Of course, it should be crypto assets, in the prospects of which you have no doubts.
First of all, cryptocurrencies should be quite simple and understandable, and the mechanics for exchanging and withdrawing funds should not be resource-intensive and they should not take much time. This means that the project should be not only promising but also with the introduction of unique technologies and innovative solutions. This must be a project that gives or will give in the near future good opportunities for earning.
Crypto Market Forecast 2022
The bearish phase for bitcoin has come. Some experts believe that bitcoin could drop sharply in the coming months and it could fall below $20k in 2022, while others believe that this time is different as more institutional investors enter the market.
Transformation to DeFi. Altcoins like Ethereum have started to play a significant part. Analysts expect the trend to continue next year. The total amount of money invested in DeFi services exceeded $200 billion for the first time this year, and experts predict that demand will continue to grow.
Ethereum, Solana, Polkadot, and Cardano enable smart contracts, which are digital agreements backed by software code and stored on the blockchain. Such contracts are the basis of DeFi - the decentralized finance sector and DAO, or decentralized autonomous organizations.
DeFi aims to provide traditional financial products without intermediaries in the form of banks. DAO, on the other hand, can be seen as a new type of online community. It is here, according to many experts, that the highest growth of cryptocurrencies in 2022 will be observed.
Focusing on regulation. In 2021, government agencies have shown greater interest in cryptocurrency. China has completely banned any related activity, and US authorities have suppressed certain aspects of the market. Experts say that one of the key areas that regulators will focus on next year will be stablecoins. These are tokens whose value is linked to the price of existing assets such as the US dollar. The largest stablecoin in the world is Tether. The stablecoin is of particular concern, especially about the sufficiency of assets in its reserves to explain a peg to the dollar.
Ethereum: Major Altcoin Continues to GrowThe second currency in terms of capitalization and value in the crypto industry is, of course, Ethereum (ETH). This is a full-fledged ecosystem, and the technology of smart contracts provides additional opportunities for users. Ethereum has been strengthening its position in the market throughout 2020, and already in 2021, it broke its record in value twice, when reached 4.3 thousand dollars. Interest in Ethereum today is fueled by the launch of Ethereum 2.0, which is scheduled to be completed by the end of this year. So, from a fundamental point of view, the coin is still very promising, if we consider it as a long-term investment.
Now the generation of new coins and the confirmation of transactions are carried out by miners who use a bunch of computing power for this. The developers of Ethereum are determined to abandon mining in favor of staking, a solution in which transactions will be confirmed by the share of cryptocurrency ownership on users' balances. On the one hand, this will speed up the network, and on the other hand, it radically changes the cost of generating new coins.
Prerequisites for growth1. The basis for actively developing areas. Ethereum is a promising currency in 2022. Today, most projects such as DeFi, GameFi, NFT, and others operate on the Ethereum blockchain, and gas is required to perform any action on the network. In the DeFi sector, Ethereum dominates the rest of the blockchains with over $1 billion of funds locked up, which is two-thirds of the total market.
The gap is even stronger in the NFT market, where the share of the altcoin exceeds 90%. The dominance of altcoin allows for favorable forecasts given the overall growth of the market, although competition is gradually reducing its market share. The growth in popularity of the metaverses provides an additional powerful impetus for each of these areas. All this will contribute to the elasticity of demand for ether and, as a result, its popularization and price growth.
2. Development of the second layer. Layer 2 scaling solutions that could change the way transactions run on Ethereum. The settlement layer of the Internet has excellent prospects, so Ether should be monitored in the first quarter of 2022.
3. Transition from PoW. The coin will switch to the Proof-Of-Stake algorithm, which will allow the decentralized application to work more smoothly and efficiently. This upgrade should please most users very much. Ethereum is good because it has been close to bitcoin for many years. This cryptocurrency provides the greatest prospects for investment in the long term.
The release of Ethereum 2.0, in addition to the above, involves the elimination of, perhaps, the only drawback of Ethereum is the high cost of commissions within the network.
The price of Ethereum surged along with Bitcoin last year, peaking above $4K during the crypto boom in May and then climbing to a new record of almost $5K in late October and early November.
Despite being second only to Bitcoin in terms of market cap, Ethereum accounts for about 20% of the total market and could outperform Bitcoin. In particular, Ethereum has the potential to become much more energy-efficient than Bitcoin due to the transition from Proof-of-Work to Proof-of-Stake. Thus, it will be possible to eliminate the energy-intensive need to verify transactions on the blockchain through complex computational efforts. It is worth noting that over the past six months, the Ethereum exchange rate has grown by more than 50%.
Altcoin Predictions 2022Large initial public offerings of shares of crypto companies on the stock market are expected next year. According to analysts, representatives of the cryptocurrency sector will want to repeat the success of Coinbase, which in April of this year became the world's first public crypto exchange.
The trading platform made a public listing on NASDAQ without an IPO procedure. At the peak, the value of the company's shares almost reached $430, then they moved into the stage of decline. At the premarket, the price of securities of the first public crypto exchange has crossed the threshold $261, and the capitalization of the crypto exchange is estimated more than $55 billion.
Binance CoinThe cryptocurrency from the largest crypto exchange Binance. For the first time, this cryptocurrency entered the financial market in the summer of 2017, and then its value at that time did not exceed ten cents. All 168 million BNB coins were mined even before the initial offer, and the creators of the token did not provide for any additional emissions.
Despite its modest start, the Binance coin has performed well. Even during the crisis that happened in 2018, this token proudly showed itself to be quite resilient even in an unstable situation.
First of all, the situation on the Binance platform directly affects the changes in the BNB rate. As soon as the trading asset on this cryptocurrency platform starts to rise, at the same time, the level of demand for Binance coin begins to rise. And in the foreseeable future, the token has every chance to rise in price further. Since BNB allows you to reduce transaction fees.
In addition, the direct growth and development of the BSC blockchain have a tangible impact on forecasting. Many DeFi projects are already refusing to use the Ethereum infrastructure and are switching to this system. Such decisions are made due to the fact that BSC is very favorably distinguished by the high speed of financial transactions. The trend towards such a transition may continue. Provided that the date of updating ETH will continue to be postponed.
There were positive dynamics of the token, including on the Binance exchange during 2021. If analysts' forecasts come true, then the coin will have great prospects. In particular, thanks to it, it will be possible to reduce commissions on the Binance exchange, which will positively affect its competitive position.
TetherTether today is the main stablecoin with the largest capitalization among similar ones. This token works on the Ethereum blockchain and is one of the top five cryptocurrencies in terms of cap. The peculiarity of Tether is that it is pegged to the dollar, which makes it less volatile. This feature will allow the token to gain popularity on all exchanges. Today, it is stablecoins that dominate crypto trading and most of the deals take place using the Tether stablecoin.
The share of the dollar stablecoin USDT in exchange trading exceeded 70%. Investors remain confident in an asset that was called into question in 2021. Despite this, Tether’s dominance in trading will continue for the next few years. The situation can only be changed by the intervention of the regulator, after which investors will prefer another stablecoin. Until then, Tether will remain the go-to for crypto trading. Other cryptocurrencies will be able to compete with it only in the DeFi sector.
SolanaSolana is a representative of dApp and DeFi enabled blockchains and operates with the SOL token. The project boasts high data processing speeds of over 50,000 transactions per second, which was made possible through the use of a bid confirmation mechanism and history consensus.
Proof of History differs from mining and staking in a new principle of proof, and there is a rather controversial solution, because, although it significantly expands the network, on the other hand, it provides more possibilities to attack it. Solana has already experienced several DDoS attacks, which negatively affected the cryptocurrency exchange rate.
At the same time, Solana has solved one of the biggest problems with Ethereum and cutting transaction fees. Like Ethereum, Solana was created as a first-class platform for decentralized finance, excluding financial intermediaries such as banks, brokers and centralized exchanges. Launched in 2020, Solana is a small part of the market, but it is constantly growing. The value of the coin has increased from $1.5 at the beginning of 2021 to over $160.
CardanoCardano is right behind SOL, with a market capitalization of $55 billion. Cardano is a Proof-of-Stake blockchain for developing smart contracts as well as building full-fledged decentralized applications. Founded in 2017 by Ethereum co-creator Charles Hoskinson, Cardano is one of the largest blockchains successfully launching a more energy-efficient proof of stake protocol.
Cardano aims to create a developer-friendly ecosystem for decentralized applications. Unlike Ethereum, the number of coins of this cryptocurrency is limited to 45 billion. Luckily for investors, 33.5 billion, or about 74% of this supply, is already in circulation.
Cryptocurrency has shown a sharp rise in 2021. The token began trading below $0.20, and by early September, the value rose to $3, becoming the third-largest cryptocurrency in the world. Over the past 12 months, the Cardano token has risen in price by almost 600%. In September, the altcoin updated its all-time high above $3, which means an increase of 1.6 thousand % since the beginning of the year. According to the analyst, in 2022, the cryptocurrency will continue after the correction phase.
Terra LunaIn 2021, the value of LUNA increased by 130 times, entering the TOP-10 blockchains by capitalization. The goal of the LUNA project is to become a reliable bridge between fiat and cryptocurrencies. The main disadvantage of secure and decentralized currencies like Bitcoin is high volatility. This hinders the widespread acceptance of cryptocurrencies as a means of payment, especially in long-term transactions.
In addition to the issues of decentralized cryptocurrencies with their high volatility, Terra also solves the problems of stablecoins that are subject to centralization and the possibility of uncontrolled emission. The stablecoin of the project - UST is decentralized, and its emission is associated with the LUNA token, which is controlled by a mathematical algorithm and does not depend on the will of the publisher.
To obtain UST, the user must burn the appropriate amount of LUNA. If demand for UST grows, LUNA validators are rewarded and the money supply increases. Otherwise, some of the tokens are burned by the system. The capitalization of UST is already approaching $11 billion, although it was launched not so long ago in September 2020.
The cryptocurrency market is in dire need of such tools, as centralized solutions such as Tether carry high risks due to insufficient foreign exchange reserves. In 2022, UST will continue to gain popularity, which will allow stablecoin to overtake Binance USD by the cap.
In the decentralized finance sector, Terra is growing even faster with $18.5 billion of funds locked up, making it the second PoS blockchain after Ethereum. Terra network members can offer new coins for issuance, so we can expect further expansion of Terra in regional markets. This will lead to an increase in demand for LUNA and a further increase in value.
In addition to expanding the crypto market, Terra has strong growth prospects through the absorption of Ethereum's share of the DeFi market, as well as the absorption of Tether's share of the stablecoin market. In this regard, a 4-5 times growth for LUNA can be considered a moderate forecast for 2022 under favorable conditions for the cryptocurrency market.
PolkadotThis is a blockchain project with which you can create applications and functional services. Experts believe that the speed of the development of the project will soon allow it to have the same impact on the cryptocurrency market as Ethereum did in its time. Polkadot (DOT) is interesting because its founder, Gavin Wood, worked on the Ethereum system in the past, and Polkadot did not appear by chance, but as a real attempt to solve the problem of ether scaling.
The Polkadot network allows you to process several blockchains in parallel, forming the so-called parachain. The project is quite complex and ambitious, periodically encounters some technical errors that the developers are trying to resolve. As a clear roadmap is formed and contentious features of the network are resolved, DOT could be interesting in the long run.
Of course, it is almost impossible to give specific analytics for five years, but in the future Polkadot has a good chance of becoming one of the leading parachain solutions on the market. After the growth in November last year, the DOT token is in the correction stage, but according to the forecast, next year the altcoin will come out of the correction and update its historical maximum.
Polkadot is a system that brings different blockchains together and allows them to interact. The main goal of the project is to create a single financial space without borders within the multi-blockchain.
Polygon (MATIC)Another promising crypto project is the Polygon network of second-level secure solutions created in India. The goal of the project is to reduce the cost of transactions and increase scalability in Ethereum. Polygon is an Ethereum-compatible second-level sidechain operating on the PoS algorithm. This network is faster and with lower fees than the main Ethereum network.
MATIC has become a crypto unicorn and is currently the only live second layer scaling solution for Ethereum. As a real part of Ethereum's scaling, MATIC seems like a good choice for the coming months, as long as the market as a whole maintains its structure.
In 2021, the Polygon token rose by 13,39%, and the altcoin has not exhausted its growth potential and can continue to rise in price next year.
AvalancheDespite its name, this avalanche has been hot this year. At the beginning of 2021, the cryptocurrency was trading below $3, by the end of November, it reached an all-time high of over $146. It now has a market capitalization of over $26 billion. As part of the partnership, consulting giant Deloitte will deploy Avalanche to support its work with the U.S. Federal Emergency Management Agency (FEMA). As the deal with Deloitte boosts Avalanche's credibility, the token could reach new heights in 2022.
Avalanche is a platform for running decentralized applications and deploying enterprise blockchains. The platform is open source. This year, the value of the Avalanche token exceeded $144 with more than of 4860% increase since the beginning of the year. Apparently, in the next 12 months, the altcoin will continue to rise in price and update all-time highs.