Top 10 Cryptocurrencies to Buy in 2022.
2021 was a fantastic year for crypto. Not just in terms of parabolic growth of token prices. The change in market dynamics and the initiation of a new paradigm shift in financial markets are visible because of many innovations in crypto assets. In less than a year, institutions started to notice the crypto market and decided to stack blockchain-based assets that offset inflation risks.
From Tesla and MicroStrategy buying billions worth in bitcoin to Adidas and Nike spearheading in the NFT space, we have experienced a massive public wave of interest. The rapid innovation of web3 protocols is also something that has facilitated expanding existing ecosystems and spawning new market sectors.
Many projects showed out great strength at the beginning of 2021, giving astronomical returns in a short period. Like Aave, Comp, and Uni, the blue-chip assets had parabolic runs in the first quarter. But when the large sell-off happened in May, most of these DeFi 1.0 tokens were subjected to a long consolidation before the next leg up.
In that period of consolidation, we saw many narratives in the crypto world take new forms and mature at a rapid pace. The multi-chain DeFi trend, with projects like Matic and Solana, attracted many new users who couldn’t access the Ethereum network because of high gas fees. The ecosystems growing on top of these platforms made people realize how superior Solana is compared to Ethereum in speed and user experience. As a result, the price of SOL went up by 25x, with an ATH of $260.
Apart from layer 1 growth and L2 scaling solutions, we have also seen one of the biggest revelations in the crypto space with NFTs. At first, we mainly saw people trade sports highlights from NBA Top Shots and digital art collectibles. But as the market matured and the NFT community got bigger, we started seeing new collections take inspiration from the original generative profile picture NFT collection, Crypto Punks. In August, we saw the launch of Bored Ape Yacht Club go viral. And by the end of 2021, BAYC flipped Crypto Punks in terms of floor price.
As the NFT trend became mainstream and the narrative of bubbles faded, we started seeing more innovative use cases within the ecosystem. Also, the rise of metaverses is mainly due to NFTs. The core functionality depends on the true ownership, interoperability, and composability provided by an NFT. Projects like Sandbox and Decentraland, with many others, went on a tear, giving great returns for early metaverse believers.
Going forward in 2022, we expect certain trends to continue as they drive more adoption at the retail and institutional levels. Here are a few main trends we believe are important in 2022:
- Sustained prominence of top cryptocurrencies that continue to attract institutional investors + increased allocation of crypto funds.
- Multi-chain DeFi trends with scaling solutions and ZK rollup narrative-driven projects.
- Growth of protocols and platforms serving the web 3 ecosystem.
- NFTs, metaverses, and gaming guilds continue to drive mainstream adoption as it is much easier to onboard users with games and art.
- Security token offerings adopted by companies and the platforms that automate the complicated capital formation process should find a large market in crypto.
With that being said, it is time to list the top 10 cryptocurrencies to buy in 2022 that show great strength and future potential in terms of price action and market opportunity, respectively.
#1 Bitcoin (BTC)
Despite the recent drawdown in bitcoin’s price, we believe it can reach new all-time highs in 2022. In a shorter time frame, it is hard to predict what will happen. Bitcoin still has to claim $53k level as it is the cost-basis bull market support market. We will likely see a trend flip occur once that level is breached. A perfect validation to our bitcoin thesis would be a break into new highs at $69,000.
Apart from the price action, we see many positives regarding the bitcoin network. The supply distribution by participants is playing out well, with whale holdings going down and retail surging new to ATHs. In a recent chart shared by Willy Woo, we can clearly illustrate this trend. The growth of the lightning network in 2021 should also be factored in to determine our bitcoin price targets.
The longstanding view on bitcoin bull/bear cycles may finally end because the demand from institutions will only grow in 2022. As the bitcoin market becomes more institutionalized, we will see a massive influx of money that will go straight into buying and hedging bitcoin-related assets. This also means we will see new regulatory frameworks in the crypto markets, as it removes the friction for institutions to take part. All of these contribute to why bitcoin will likely reach $100k or more in 2022.
#2 Ethereum (ETH)
The main thing to focus on when it comes to Ethereum is will they be able to deliver a scalable infrastructure that provides a better or similar user experience as current L1s like Avax and Solana. That’s the ultimate question in 2022 for the Ethereum ecosystem. The L1s are coming strong. The locked value of Ethereum is down from 96% to 63% in 2021. We may see a bigger dip in this if Ethereum fails to achieve its vision of building a modular blockchain.
We remain optimistic that scaling solutions like zk-sync 2.0, Starknet, and others will help in removing some of the initial entry barriers associated with gas fees. Ethereum is still a number two option for investors because it has been around for a long time. The user activity and value of assets running on top of its platform are not comparable to other smart contract platforms. In terms of locked value, Ethereum is still way ahead of others. If it becomes easier to build on Ethereum, we may see the TVL go on a massive run in 2022.
Another narrative that could drive a major price uptick in ETH is NFTs. Most of the projects still prefer to launch on Ethereum blockchain, as it is more secure and decentralized in nature. We also expect the London hard fork to burn nearly $10 billion worth of ETH in 2022, as it already burned nearly $5 billion from August 2020. So considering the mainstream adoption of Ethereum blockchain and promising scaling solutions, we believe it will have a good run in 2022, surpassing the $10k mark.
#3 Polkadot (DOT)
It is probably one of the best times to build a DOT position in your investment portfolio. The token corrected by nearly 50% after the parachain auctions from $54 to $24. Currently, Polkadot is slowly climbing its way back to previous highs. In 2021, the rally was initiated because of the hype around parachain auctions. This year, we will see the functionality of those parachain and how they contribute to web 3.
The meta protocol aims to accompany 100 parachains that share a high level of security using a relay chain. Polkadot delivered on its promises by achieving the final piece of functionality with parachains. The lack of application capabilities of the base layer will now be fulfilled by these customizable parachains that will act as execution layers. It is also important to remember that millions (106M to be exact) of DOT tokens will be locked for an extended period under crowd loans. So it will impact the price in the near future as well.
#4 Polygon (MATIC)
L2 scaling solutions are the main reason why the migration to alternative L1s has not been that significant. And the leading L2 solution for Ethereum is Polygon. Its native token did nearly 100x in 2021, but that’s not the only thing people remember about the Matic token. The widespread user base in crypto relied upon Polygon sidechain to access the main layer 1 blockchain, Ethereum.
The best relative metric to assess Polygon’s growth would be active user addresses. It has more users actively transacting that on the Ethereum network. So it is evident that scaling is a priority for mass users. We expect this trend to continue in 2022 as well because most blockchain games, among other DeFi applications, are built on Polygon to solve the gas fee problem.
#5 Cosmos Ecosystem (ATOM)
One of the most overlooked crypto assets over the past year is ATOM. The main reason is a lack of understanding of the Cosmos ecosystem and the importance of interoperability in the blockchain world. Cosmos is the only ecosystem in crypto that could build an inter-chain protocol called IBC.
For years, we did not see the developments and enhancements of Cosmos. That is slowly starting to change. With IBC, we now have a protocol that enables multiple blockchains to communicate with each other. It is like the next internet where blockchains replace computers. Many people also ignore the fact that many reputable blockchain networks were built using Cosmos SDK. The Luna ecosystem, which is currently on a massive run, is built using Tendermint core and SDK features offered by Cosmos.
So for those reasons, we believe ATOM will have its moment in 2022 like SOL did in 2021. And it will mainly be initiated by high demand interchain security and communication in the ever-expanding DeFi sector.
#6 The Sandbox (SAND)
Metaverse is the biggest play of this decade. So if you want to capitalize on this rising trend, you need to find quality projects that are utility-focused and have a strong community. One such project we found that stands out is Sandbox. The native token, SAND, gave more than 10x returns to early investors in 2021. We believe the ceiling is much higher for this project.
In November 2021, the project announced Sandbox Alpha, a multi-week event that allowed players to witness the metaverse for the first time. The team also created 18 experiences within the metaverse. Considering users will finally be able to interact inside the metaverse and take full advantage of in-game assets, we expect Sandbox to have its Axie-like moment in 2022.
#7 Polymath (POLY)
This is one of those asymmetrical bets you can take in 2022 if you understand the outlook of digital assets. Polymath is a leading platform to provide industry-grade security solutions for token issuers, service providers, asset managers, and mainstream bank-enabled companies. To date, Polymath successfully deployed over 200 tokens and has over 300 reserved tickers for its purpose-built blockchain, Polymesh.
We have selected Polymath not only because of its robust infrastructure to offer digital securities but also the massive opportunities it could unfold in the traditional markets. With security token offerings or STOs, companies can acquire capital and liquidity rapidly in a regulated environment. As regulation approved assets build confidence among the public masses, we believe Polymath will be a leader in the massively undervalued and underserved sector in crypto.
#8 Dusk (DUSK)
Dusk recently pulled off a massive rally towards the end of December. We believe this is just the beginning, as Dusk has much higher potential. Similar to Polymath, Dusk aims to solve a trillion-dollar problem in the capital markets by introducing a privacy blockchain based on zero-knowledge proofs.
The open-source blockchain technology inherited by Dusk can lower the cost of operations for companies and allow them to tap into deep liquidity with ease. With Zero-Knowledge proofs, Dusk promises to provide utmost privacy to every user. They can communicate and manage deals without ever showing any sensitive on-chain information. So the potential for Dusk is high, and it could have a parabolic rally in the near future or in Q1.
#9 Chainlink (LINK)
Chainlink was one of the first major innovations in DeFi. It had its major run against ETH charts from the beginning of 2019, but they topped during the first DeFi summer. If we consider the LINK/ETH pair, it has been in the bear market for over a year now. In 2022, it is likely going to change the narrative around oracles and regain its previous all-time high and go beyond.
It is almost every day we see new partnerships with Chainlink. The market-wide presence of Chainlink oracles is visible. So it is only a matter of time we see a change in market sentiment towards LINK tokens that would propel a new bullish structure.
#10 Yield Guild Games (YGG)
If you are not bullish about the play-to-earn movement and DAOs in 2022, you will miss out in a big way. We have only seen a small teaser of the P2E economy in the past year. We will see things much more than Axie Infinity in gameplay, functionality, and active users. And the best way to get exposure to these high performing projects and their respective tokens is to become a part of a gaming guild like Yield Guild Games (YGG).
Yield Guild Games is currently the leading blockchain-based gaming DAO that has invested in dozens of early-stage projects with high potential and expanded its treasury with NFTs and virtual lands. It also has many partnerships with other guilds like Merit Circle, which opens up high reward staking opportunities. Recently, they invested in 11 new projects, including a partnership with Big Time.
So for all those reasons, we believe YGG will reach a $1 billion market cap (a very conservative target) in 2022. If you are a part of this DAO, you can also expect high APY staking pools and regular airdrops.
In 2021, the crypto market reached a 3 trillion dollar market cap. Now, we are at 2.2T. A major drawdown is in play. So we can expect to claim the previous high for the overall market cap, sending major cryptocurrencies to all-time highs. The first step for us to have a breakthrough in 2022 is to be bitcoin reaching its previous ATH. That will invalidate any bear situations and help take other altcoins to new highs. The tokens mentioned above have significant functionality and market opportunity, so we expect these to outperform the majority. However, you need to do your research and position yourself in the best way possible with proper risk management.
Here’s to a great 2022. Let’s all have a green year, shall we?
All altcoins, penny cryptocurrencies, or cheap cryptocurrencies, listed in this article are based on the author’s research. Author is not holding any of these altcoins. Always do your own research before investing in any cryptocurrency.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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