Cryptovaluta could have started as a wild west for investments dominated by mavericks, but it is now firmly in the financial mainstream. Institutional investors and large banks treat it as a serious asset despite recent volatility and regulatory intervention in China and elsewhere.
If you need proof of how volatile, consider this: As of April 11, the value of bitcoin has ranged from a low of $ 28,893.62 to a record high of $ 68,789.63 over the past year.
Despite this volatility, many investors in cryptocurrency are still looking for the next big gain. Keep reading to learn which cryptocurrencies may soon explode.
Which cryptocurrency is set to explode?
If you want to start buying cryptocurrency, you may be wondering: Which will provide the greatest potential return? While bitcoin may be the obvious choice, it may not necessarily be the best in 2022. Your chances of getting a big dividend may be better with a smaller currency that has not already been pumped up by institutional investors that bitcoin has.
Here are six cryptocurrencies that still have high ceilings.
1. Ethereum (ETH)
Ethereum, commonly known as ether, is the world’s second largest cryptocurrency behind bitcoin, and has even surpassed bitcoin recently in terms of price gains, CoinTelegraph reported. Last year, Ethereum launched a major upgrade, which included reducing the supply of ether, currently at 120.33 billion coins. The upgrade also allows the Ethereum network to handle more transactions per second, improve platform scalability and lower transaction fees.
Compared to bitcoin, ethereum lacks scarcity – the bitcoin supply is limited to 21 million coins – and widespread acceptance by companies and governments. But unlike bitcoin, ethereum is not just a value store. It is also an infrastructure on which apps can be built. Other cryptocurrencies are issued on Ethereum and it serves as the basis for decentralized financing.
Binance Coin (BNB)
Binance is the most successful cryptocurrency exchange in terms of trading volume. Like bitcoin, the binance currency holds a tight limit on the number of tokens in circulation – in its case 165,116,760 tokens. This helped the token price rise exponentially in 2021. In addition, Binance puts about one-fifth of its quarterly profit in permanently getting rid of or “burning” BNB tokens, raising the value of the remaining tokens.
Binance has two blockchains that reduce the kind of bottlenecks that Ethereum is vulnerable to. It’s also fast and scalable, and Binance is in the process of making the platform more controller – friendly, according to Seeking Alpha – a feature that could be crucial to its longevity and widespread use. In addition, Binance is launching Bifinity, a fiat-to-cryptocurrency payment platform that will help merchants prepare to accept digital assets as payments, CoinMarketCap reported. The payment processing platform supports more than 50 cryptocurrencies.
3. Tether (USDT)
Tether is a type of “stablecoin” designed to provide a less volatile alternative to bitcoin because it is linked to another asset. In Tether’s case, this asset is the US dollar. In terms of valuation, tether has a 1-to-1 relationship with the dollar, which means it is less speculative than cryptocurrencies like bitcoin and ether. With a market value of $ 82.57 billion, it is the largest stable coin and the third largest coin overall.
The great advantage of tether is that it lets you make transactions in traditional currencies instead of having to dive into complex digital currencies. You can also lend it to cryptocurrency platforms in exchange for double-digit (annual) interest rates without worrying about volatility erasing your earnings.
Decentraland is a virtual reality game on the Ethereum blockchain that uses the MANA token as an in-game currency. Users can buy goods and services, buy land and visit other players as well as create and monetize their own content. MANA’s current price of $ 2.12 represents about a 385% increase from its 52-week low of 43.68 cents.
MANA is the largest gaming cryptocurrency in terms of market value. Although it has competition from people like The Sandbox and ApeCoin, and assets in the game are quite expensive – land packages listed on Blockee show prices ranging from several thousand dollars to over $ 22 million – it has some benefits that can push the token forward. For example, users retain ownership of the digital assets they create in Decentraland and can convert them to cryptocurrencies other than MANA.
5. Algorand (SOMETHING)
ALGO, founded by renowned computer scientist Silvio Micali, has positioned itself as a competitor to the Ethereum blockchain. Hundreds of companies use it, according to Securities.io, and it got a huge boost last year when El Salvador said it would establish its blockchain infrastructure using Algorand. Recently, venture capital firm Borderless Capital launched a $ 500 million fund to invest in digital assets that run decentralized applications on Algorand, Blockworks reported. The Marshall Islands’ digital central bank currency, Sovereign (SOV), also uses Algorand.
One of ALGO’s biggest advantages is its “proof-of-stake” algorithm, which offers a high degree of security and scalability and requires less electricity than Bitcoin and other platforms. This feature will only grow in importance as cryptocurrencies face more criticism – and possible regulation – of their massive energy consumption.
6. RenderToken (RNDR)
RenderToken is a graphics rendering network that lets miners with excess bandwidth to the graphics processing unit hand it out to artists and creative studios who need extra computing power. RNDR are the native token creators and miners who use in their transactions on the RenderToken network.
RNDR was launched in a public sale in 2017, but it has recently been listed on the Coinbase exchange. While highly speculative, RNDR may benefit from the increased exposure it receives on Coinbase, as well as the extraordinary increase in non-fungible tokens for digital art.
How to find the next big cryptocurrency
Before figuring out which cryptocurrency may be the next big winner, it helps to understand why so many investors are initially drawn to cryptocurrency. Much of it has to do with a fundamental change in how digital assets are perceived, said Jeff Dorman, chief investment officer at Arca, a financial services firm specializing in digital assets.
“I think we are in the early stages of a decades-long secular shift towards digital assets, as the evolution from an analog to digital world has been transformed forever by COVID-19,” Dorman said in an e-mail. mail to GOBankingRates.
He says this asset class “has now evolved far beyond cryptocurrencies” to decentralized finance, NFTs and other investment instruments.
Profits and gains from crypto
When trying to identify the next major cryptocurrency, there are two things you need to keep an eye on that are similar to what a stock investor would keep an eye on: market value and price.
Market cap shows how much has been invested in a specific network. As a general rule, the greater the market value, the more stable the asset, although this also means that the coin has less room to grow. It is also important to keep an eye on the price to determine if investors are bullish or bearish on the cryptocurrency.
Other key measurements
Here are a few other measurements that can help you evaluate a crypto:
- Volatility: The less volatile the price, the better it is for the value of the crypto to remain stable.
- 24-hour volume: The total dollar value of all transactions during the last 24 hours can help you determine the liquidity of a coin.
- Deliver: As Bitcoin’s sharp rise testifies, scarcity can drive demand and prices. Increasing or infinite supply can have a dampening effect.
How do I buy cryptocurrency?
It is relatively easy to buy cryptocurrency. Here’s how you do it:
1. Open an account with a cryptocurrency exchange or broker
You will need to open a trading account, just as you would for stock trading. You can go through a cryptocurrency exchange like Coinbase, Binance.US and Gemini, which matches buyers with sellers, or choose a broker like Robinhood and SoFi, which performs the trades for you. Stock exchanges typically have low fees, but they have complicated interfaces. Brokers have much simpler interfaces, but can charge higher fees and offer a limited selection of coins.
2. Finance your account
Before you can trade crypto, you need to use a way to pay for your purchases, such as an associated bank account, a bank transfer or a debit or credit card payment.
3. Place your cryptocurrency order
Select the cryptocurrency you want to buy and specify how many coins you want to buy. To buy fractions of cryptocurrency, enter a dollar amount instead of the number of coins.
GOBankingRates’ crypto guides
Daria Uhlig contributed to the reporting of this article.
Data are accurate per. April 11, 2022 and subject to change.
This article originally appeared on GOBankingRates.com: What Is The Next Big Cryptocurrency To Explode In 2022?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect Nasdaq, Inc.