At first, cryptocurrency was a novel investment, but it has today entered the mainstream. Despite the recent volatility and regulatory crackdowns in China and other countries, institutional investors and big banks still view it as a viable asset class.
Take a look at this to get an idea of how volatile things may get. Over the past year, Bitcoin’s value has fluctuated between $28,893.62 and $68,789.63. Nonetheless, amid the prevalent Bitcoin volatility, its investors continue to search for the next big win. Find out which cryptocurrencies are on the verge of exploding by reading on.
Which Cryptocurrency Is Set To Explode In 2022?
To have a foray into Bitcoin investment, your curiosity might also beg the question, “which cryptocurrency has the potential to yield huge profit?” However, Bitcoin may not be the best option, although it is the most popular and most expensive crypto asset.
With a smaller coin that hasn’t been driven up by institutional investors like Bitcoin, your prospects of a big reward might be better.
Here are some cryptocurrencies that still raise the bar of investment.
1. Ethereum (ETH)
According to Cointelegraph, Ethereum, also known as ether, is the world’s second-largest cryptocurrency, toppling Bitcoin in recent price advances. Earlier this year, Ethereum implemented a major upgrade that included a reduction in the amount of ether, currently 119.88 billion of the virtual currency.
Ethereum’s scalability and transaction fees will also be improved as a result of the upgrade, which will handle more transactions per second.
Since the total supply of Bitcoin is set at a whopping 21 million, ethereum does not have the same level of scarcity or acceptance among businesses and governments as Bitcoin does. It is not like Bitcoin, which only serves as a store of value. Apps can be built on top of it as well. For decentralized finance to work, other coins must be issued on Ethereum.
2. Binance Coin (BNB)
In terms of trade volume, Binance is the most successful cryptocurrency exchange. There are a maximum of 165,116,761 BNB tokens in circulation, similar to Bitcoin’s hard cap. In 2021, the token price soared due to this. As a result, Binance burns around one-fifth of its revenues each quarter, which enhances the value of the remaining BNB tokens.
Unlike Ethereum, which is susceptible to the same kinds of bottlenecks, Binance has two blockchains running simultaneously. According to Seeking Alpha, Binance is making the platform more regulatory-friendly – a characteristic that could be important to its long-term viability and widespread adoption.
For businesses, the debut of Binance’s fiat-to-crypto payment platform Bifinity will make it easier to accept digital assets as a method of payment. More than 50 cryptocurrencies are supported by the payment processing platform.
3. Decentraland (MANA)
The MANA token serves as the in-game cash in the virtual reality game Decentraland, which runs on the Ethereum network. Users can make and sell their material, as well as buy and sell other people’s, as well as buy and sell their land. At $2.38, MANA’s current price is 543 percent higher than its 52-week low of 37 cents.
In terms of market capitalization, MANA is the most popular gaming cryptocurrency. The Sandbox and Axie Infinity are competitors, and assets are pricey — the going rate for land is roughly $4,000, according to Benzinga — but it has several advantages that could propel the token forward. The digital assets that users produce in Decentraland, for instance, remain theirs to keep and can be converted to other cryptocurrencies besides MANA.
4. Tether (USDT)
Tether is a “stablecoin,” which means it is pegged to another asset and hence less volatile than Bitcoin. The tether’s asset is the U.S. dollar in this case. Tether is less speculative than other cryptos like Bitcoin and ether since it has a one-to-one exchange rate with the dollar. It is the largest stablecoin and the third-largest coin overall, with a market cap of $80.859 billion.
Tether’s main advantage is that you can use standard currencies instead of having to deal with complicated digital currencies. Alternatively, you can lend it to cryptocurrency platforms in return for double-digit (annualized) interest rates without fearing that volatility will erase your earnings.
5. Solana (SOL)
It has been over a year since Solana was created to let developers create decentralized apps. Solana intends to increase DeFi’s scalability and accessibility by overlaying proof-of-history consensus on top of the fundamental proof-of-stake mechanism.
To make transactions faster and cheaper, Solana is one of several “Ethereum killers” that aim to improve Ethereum’s current system. As a result, it stands a chance of succeeding in competition.
6. Algorand (ALGO)
Popular computer scientist Silvio Micali developed ALGO, which has positioned itself as an Ethereum blockchain competitor. More than a hundred organizations are utilizing it, according to Securities.io, and El Salvador announced last year that it would utilize Algorand to set up its blockchain infrastructure.
Recently, Borderless Capital announced a $500 million fund to invest in digital currencies that enable Algorand decentralized applications.
In addition to the security and scalability of ALGO’s “proof-of-stake” technology, it requires less electricity than Bitcoin and other platforms. Cryptocurrencies’ high energy usage is a growing source of concern and may even lead to regulation in the future, making this feature even more critical.
How To Spot The Next Big Cryptocurrency
Before having an envision or prediction on which cryptocurrency will have the next explosion, it is important to understand why so many people are interested in investing in cryptocurrencies in the first place. This is owed to the fact that digital assets are being viewed in a fundamentally new light.
A stock investor would keep an eye on market capitalization and price when attempting to identify a new cryptocurrency’s future success.
A network’s market cap is a measure of how much money has been invested in it. The more stable an asset is, the greater its market cap, but this also indicates that the currency has less growth potential. The price of the cryptocurrency should also be monitored to see if investors are bullish or bearish on it.
Due to COVID-19, we are in the early stages of a long-term paradigm shift toward digital assets that will continue for many decades into the future. Although cryptocurrencies are still the most common form of digital asset, they have grown into decentralized finance and nonfungible tokens as well as other types of investment vehicles.