10 Best Cryptocurrencies To Buy and What to Avoid In 2022
|Top 10 Best Cryptocurrency To Invest In 2022|
Cryptocurrencies, as long as you manage them right, can be a valuable asset in your portfolio. In addition to augmenting your investments, buying multiple cryptocurrency coins will protect you from losing all your money. A popular method of making money is crypto trading, but it comes with a lot of risks. This is a terrifying thought for those who work hard, but there's also a good chance to score when there's a high risk. .
The rise in cryptocurrencies is inevitable in the cryptocurrency market. Several catalysts helped spark the downturn, not least of which was the emergence of the omicron variant and the Federal Reserve’s open willingness to raise interest rates earlier than previously thought to help combat inflation. There are now thousands of cryptocurrencies, and many of these have a promising future within the market. Some crypto coins are stable like Tether and USD coin, but some show great results like Terra, Shiba Inu, Bitcoin, and many more.
In 2022, we may be seeing certain coins continue to rise, or even reach their all-time price high. So, which coins should you be looking out for in 2022, and why?
List of 10 best cryptocurrencies to buy in 2022
1. Ethereum (ETH)
2. Cardano (ADA)
3. Avalanche (AVAX)
4. Uniswap (UNI-USD)
6. Polygon (MATIC)
7. Algorand (ALGO)
8. Polkadot (DOT)
9. Ripple (XRP)
10. Bitcoin (BTC)
What are the best cryptocurrencies to buy in 2022?
1. Ethereum (ETH)
Ethereum, or ether, has handily outperformed bitcoin so far this year, trend experts say will likely continue. Vijay Valecha, chief investment officer at financial consultancy firm Century Financial, says there's strong performance is underpinned by two key factors.
First, ether has a high level of real-use potential. It’s the native cryptocurrency of the ethereum blockchain, which is the main platform for smart contracts, a fast-growing segment of the crypto verse.
Smart contracts are self-executing agreements that live on the blockchain and use ether as their transactional currency. Ethereum is forecasted to continue holding the largest share of the smart contracts market, which is projected to reach US$345 million by 2026.
Second, the recent ethereum upgrade, known as the Altair upgrade, has been well received by investors, as it makes the network more scalable and secure. The upgrade is in addition to the successful implementation of ethereum’s “London hard fork” a few months back. This change to ethereum’s underlying code led to record interest in its staking rewards program, says Valecha.
The London upgrade is a significant step in ethereum’s transition from a more energy-intensive proof-of-work (POW) model to an energy-efficient proof-of-stake (PoS) model, scheduled for completion in 2022.
2. Cardano (ADA)
Cardano project started with the Ethereum co-founder Charles Hoskinson. As a native token for the Cadano platform, the ADA token is used to send and receive digital funds anywhere in the country without middlemen. ADA was named after a 19th-century mathematician thought to be the first computer programmer, Ada Lovelace.
- The ADA tokens can be mined by users.
- Works as a smart contract platform.
- The token is also used by platform users to pay for premium services on the platform.
- The limit to be minted is 45 million ADA tokens.
- The protocol of the network is called the Ouroboros proof-of-stake algorithm.
- Trading fees: 0.180738 US Dollar
- Daily Trading Volume: $10.4 billion
- Market Capitalization: $45.5 billion
3. Avalanche (AVAX)
Avalanche is another rising star in the smart contracts arena. “The avalanche blockchain is a competitor to ethereum, as it provides a platform for building decentralized apps, and it is the fastest smart contracts platform in the industry with very low fees,” says Marcus Sotiriou, a trader at GlobalBlock, a U.K.-based asset broker.
Its native AVAX coin is used both as part of the avalanche consensus mechanism (a method of verifying transactions) and for paying network transaction fees.
In August 2021, the Avalanche Foundation announced the Avalanche Rush program, earmarking US$180 million in DeFi incentives to encourage more applications to move to the avalanche ecosystem.
The program has already attracted established crypto projects like Aave and Curve, Sotiriou notes. Since the announcement of Avalanche Rush, the total value locked (TVL)—the cumulative value of assets staked on the avalanche protocol—has jumped from US$250 million to a whopping US$13 billion.
Building on the program’s success, the Foundation announced the Blizzard investment fund, allocating another US$200 million to attract developers focused on DeFi, enterprise applications and NFTs to the avalanche blockchain.
For the year to date, the AVAX token has rung up a staggering 3,800% gain, from US$3.17 to US$122.65. With more applications moving to its ecosystem, the price upswing is poised to continue in 2022.
4. Uniswap (UNI-USD)
Uniswap is a candidate for the next crypto to blow in 2022 due in large part to increasing interest in DeFi.
Finance can be a very tricky thing; many people want to passively earn income on their existing assets, but they want access to those assets in the process. Some people can’t even open a bank account due to personal circumstances, keeping them from having a chance to earn. And some people simply don’t like the red tape and fees associated with traditional banking.
Well, Uniswap is presenting investors with a way to circumvent traditional banking in favor of something more independent — and oftentimes even more lucrative. As a DeFi protocol, Uniswap allows users to earn passive income on their crypto assets. When one loads their assets onto the Uniswap protocol, they can stake their coins and tokens for passive rewards; these oftentimes garner a higher annual percentage yield than a traditional savings account. Moreover, users can withdraw their funds any time they want. This allows the protocol to work with the user’s schedule, not the other way around.
The Uniswap decentralized exchange (DEX) is what the protocol is best known for. It is an automated market maker (AMM), meaning it algorithmically matches buyers and sellers to ensure liquidity. It also doesn’t need a custodian like a centralized exchange would require to facilitate trades. This is a nice feature for those who focus on the security of their assets, as storing crypto with a custodian can come with risks.
One of the most appealing factors driving investors toward Uniswap is the protocol’s willingness to change and adapt to the desires of its users. Since its exchange’s launch in 2018, the protocol has upgraded twice. The Uniswap v3 launch occurred in May 2021, and saw implementation of a concentrated liquidity offering, which both increases the efficiency of trade execution while also minting unique NFTs for liquidity providers.
Of course, you can buy the UNI token on the Uniswap DEX itself. However, if you don’t have any existing crypto holdings, you’ll need to first buy a stablecoin somewhere else. This is because DEXs don’t allow fiat trading. As an alternative, you can also buy UNI on Binance, Huobi, Coinbase or FTX.
Solana is a hit among investors who are looking for the next big thing. The network is considered a rival to Ethereum and it is making a case to be a worthy opponent of the monolithic project. Its foray into NFTs and its massive gains have helped prove its worth. And, as more users come to blockchain tech, its scalability will be quite appealing.
Indeed, Solana prides itself on its massive scalability. This scalability draws a glaring difference between Solana and Ethereum. As of right now, Ethereum can only process a few dozens of transactions per second. While it works to remedy this with its Merge overhaul, Solana is presenting an immediate alternative. According to developers, Solana is capable of handling 50,000 transactions per second.
There are a whopping 68 million crypto hardware wallets right now — a number that helps to pin down the number of network users. Additionally, developers expect this figure to grow massively through the next year and beyond. Indeed, more and more networks are making their services mobile-friendly, which will drive more widespread adoption. If this holds true, transactions will spike in volume, and networks like Solana will be crucial to accommodating the growth.
Solana is also a dark horse contender in the struggle for NFT market share. But, it’s showing itself to be a suitable adversary of Ethereum. The launch of the Solana Apes NFTs in August saw 10,000 tokens sell out in mere minutes. The event put Solana on the map. More importantly, it helped Solana start to slowly lift market share from Ethereum.
Those looking to buy SOL needn’t look outside of the biggest exchanges. The coin is for sale on Huobi, Binance, Coinbase and FTX.
6. Polygon (MATIC)
Funded in part by both Binance and Coinbase, the Polygon platform was built on Ethereum with the intention of morphing Ethereum into a multi-chain system. The intention is to create a more versatile and scalable cryptocurrency ecosystem that will enable more rapid mainstream adoption of crypto. Now among the top 15 cryptocurrencies by market cap, MATIC has surged in value from less than 2 cents to start the year to about $2 in early December. In the most recent test of Polygon's stability, MATIC was one of the few major tokens to actually advance in the early December sell-off, jumping 21% between Nov. 28 and Dec. 5. Resilience in challenging times is a cherry on top that solidifies MATIC as one of the best cryptocurrencies to invest in for 2022 and beyond.
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7. Algorand (ALGO)
Algorand (CRYPTO:ALGO) is a champion when it comes to transaction speed. The blockchain has already demonstrated that it can process more than 1,000 transactions per second -- and complete those transactions in less than five seconds. Eventually, the platform will be able to process 3,000 per second. And the next goal is more than 45,000. By comparison, credit card Visa says it can handle 24,000 transactions per second. Algorand's protocol structure is the reason for the platform's efficiency. Ordinary smart contracts and other operations take place on a base layer. More complicated smart contracts and decentralized application development happen on a second layer. This efficiency may attract more and more users and investors to Algorand.
8. Polkadot (DOT)
Polkadot's (CRYPTO:DOT) big strength? Communication. This cryptocurrency allows for the exchange of data across various blockchains. One of the big problems for cryptocurrencies has been that each operates on its own -- without this ability to share information or transfer coins from one to another. Polkadot involves the main network -- the relay chain -- and parachains that run alongside it. Through bridges, these parachains connect to other blockchains like Ethereum (CRYPTO:ETH), for example. And speaking of Ethereum, one of its co-founders went on to create Polkadot. When looking to invest in a company, I look for experienced managers. The same goes for crypto. Polkadot's leadership and its ability to connect blockchains may help it stay at the front of the pack as the crypto industry evolves.
- It is based on a blockchain whose goal is to decentralize the web through Web 3.0 and interoperate all blockchains.
- Those who check transactions on the network must possess DOT crypto to be nominated as a validator.
- It uses a protocol that is a version of the Proof of Stake (PoS) called GHOST-based Recursive Ancestor Deriving Prefix Agreement (or GRANDPA for short). Nominated Proof of Stake.
- Transaction cost: Not clear.
- Daily Trading Volume: $89 billion
- Market Capitalization: $33 billion
9. Ripple (XRP)
The seventh-largest cryptocurrency, XRP is one of the shiniest tokens sitting at the top of the altcoin pyramid—it has increased over 377% YTD, from US$0.22 to US$1.05. The native coin of the Ripple blockchain, XRP boasts incredibly fast transaction times under one second at next to no cost, making international settlements highly efficient.
Recently, however, some of XRP’s shine has worn off. It’s one of the few major tokens that haven’t matched their 2018 highs this year—and in XRP’s case, that can be largely attributed to a lawsuit launched in December 2020 by the U.S. Securities and Exchange Commission (SEC), which contends that Ripple Labs should have registered XRP as a security, not a currency. The case is still before the courts. Until a verdict is reached, investors would be wise to follow the sage advice of not investing more than they can afford to lose.
10. Bitcoin (BTC)
Bitcoin was the first digital peer-to-peer cryptocurrency developed in 2009 and is now applicable to the masses, where any person can use it to store value, send value to, and receive a value on blockchain from anyone from anywhere in the world without requiring any central authority such as a bank or central government as happens with fiat transactions.
- It is peer-to-peer meaning one transacts it directly with peers without any middlemen. It is the most popular in the top cryptocurrency list.
- It is based on a distributed network called the Bitcoin blockchain.
- Nodes who have installed the software on their computers verify payments digitally through a process called consensus.
- Blockchain information is encrypted using the cryptography encrypting technique.
- A user initiates payments digitally by creating a public and private key and then sends the cryptocurrency to the recipient’s wallet address.
- Time taken to verify payments, which are contained in one single verified block, is 10 minutes.
- Miners are paid a verification fee.
- Each miner gets 6.25 new BTC to verify a block and add it to the chain.
- Miner earnings have halved from 50 BTC since the creation of the BTC to the current 6.25 BTC.
- Transaction Fees: Sending fees: 22.24 USD per transaction but can go very low
- Daily Trading Volume: $57 billion.
- Market Capitalization: $3.6 trillion
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Cryptocurrencies not to invest in, and avoid in 2022
2021 has been a bonanza year for cryptocurrency investors, with the combined market soaring 185% to $2.2 trillion year to date. Meme coins like Shiba Inu and Dogecoin led the bull run. But both look like risky bets for 2022.
According to experts, here are the cryptocurrencies not to invest in, and avoid in 2022.
Although shiba inu was the “standout” coin of this year, soaring by more than 50,000 per cent of its original price when it began 2021, experts don’t expect its success to be repeated.
Ranked number 13 on the cryptocurrency market, shiba inu is currently trading for US$0.00003286, down significantly from its all-time high of US$0.000086. However, it’s still up significantly compared to how it started the year.
Shiba inu experience more than 50,000 per cent growth this year.
The rally started when Elon Musk tweeted about his recently adopted Shiba Inu breed of puppy in October. But despite the hype, the token isn't very useful. Its extreme volatility makes it a poor store of value and risky medium of exchange, so most Shiba Inu investors tend to have a short-term perspective (adding to the coin's volatility).
According to data from coinbase.com, the typical Shiba Inu holding time is 40 days (compared to 70 and 75 days for Bitcoin and Ethereum, respectively). The asset also suffers from concentrated ownership, with 10 accounts controlling a whopping 64% of the supply, giving whales the ability to crash the price by selling their stakes.
Up by over 3,000% in 2021, Dogecoin was one of the year's top performers. That's despite falling dramatically from its all-time high of $0.74 achieved in March (now it's worth $0.16 per coin). And unfortunately for investors, Dogecoin's collapse looks set to continue in 2022 because of its weak fundamentals and concentrated ownership.
Dogecoin doesn't allow decentralized applications (dApps), which are autonomous programs that self-execute smart contracts to offer services on a blockchain. This dramatically lowers its potential uses. And to make matters worse, its built-in inflation means it also performs poorly as a store of value.
There are currently almost 133 billion units of Dogecoin in circulation, and the number is programmed to expand by 5 billion annually -- forever -- putting downward pressure on its price over the long term.
But Dogecoin's problems don't end there. According to coinmarketcap.com, 10 holders control 43% percent of all the coins in circulation, giving them massive influence over the asset's price. So as bad as Dogecoin's current collapse is, the situation could get a whole lot worse if the whales swim away.
Ripple XRP is currently ranked eighth on the cryptocurrency scale, after starting out in 2012. It has a market cap of US$38 billion and each coin sells for US$0.8046 at the moment.
The coin is now worth just a fraction of that price, down by a whopping 78 per cent of its highest price.
What’s more, the coin is embroiled in a court case with the US financial watchdog, the only cryptocurrency to be involved in such a controversy.
The US Securities and Exchange Commission (SEC) has claimed that every Ripple sale for the past seven years was an illegal securities trade because it was an unregistered entity.
The matter has gone to court and although it’s expected that Ripple will win, Mr Rubin expects the crypto crash to have already happened by then.
|Dogecoin and Shiba Inu are meme coins with poor fundamentals, so their investors rely on the "greater fool" theory to make money. This concept suggests you can profit from a low-quality asset because someone else (the greater fool) will be willing to buy it for more in the future. |
But eventually, the hype fades. And the sellers begin to outnumber the buyers, leading to a crash. New investors should avoid Dogecoin and Shiba Inu in 2022, so they aren't left holding the bag.
It should go without saying, but do your research first before investing into a coin in case it turns out to be a scam — as millions learned the hard way earlier this year.
The squid coin, or SQUID, rose to prominence off the back of the Netflix TV series Squid Game in October.
The coin surged 90,0000 per cent within hours of listing, starting out at US$0.01235 and by midafternoon was worth $11.16 per token.
*There are over 4,000 cryptocurrencies right now, which is a very sharp increase in the number compared to only about 66 in 2013. The top twenty cryptocurrencies make up nearly 90% of the total market capitalization. Most of these are launched through the initial coin offering method, which works as an initial public offering. About 4% of people invest in cryptocurrencies in the United States according to the image below.
*Stockpiling the top cryptocurrencies in anticipation of the price going up, buying and trading of blockchain stocks, participating and buying tokens through crowdfunding anticipating the price will go up later, and angel funding startups are the top four methods you can use to invest in cryptocurrencies.
*Besides investing through the above methods, you can also invest in crypto mutual funds, Exchange Traded Funds, stocks, crypto share funds, options, and other investment products with different companies. Other methods include mining and staking where you put a given amount of funds into a project by buying tokens and assisting to verify transactions.
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