The year 2021 has just ended. And Cryptocurrency investors are already looking for opportunities in 2022. After the speculative peak of spring and fall 2021, cryptocurrencies initiated a fairly healthy correction process with the crashes of May and December 2021. With the Covid crisis, intense risk aversion from the start year of 2020 caused a major low on many cryptocurrencies.
The subsequent easing of financial stress, the massive injections of liquidity, as well as the recent attempts at institutionalization triggered an extremely powerful rally in cryptocurrencies which led to two resounding crashes. But each time, the market recovered very quickly, resuming dazzling growth.
Some cryptos still show 3 or 4-digit performance over 1 year. The challenge for the start of 2022 will be to seize any upside or downside opportunities, despite medium-term risks due to the overall evolution of the market.
1. Bitcoin (BTC) : The benchmark cryptocurrency
- Market Cap: $ 775 billion
- Daily volumes at the end of 2021: $ 20 to 30 billion (3.5% of capitalization)
- Price change 2021: + 48%
Bitcoin (BTC) remains the main Cryptocurrency and gives a good overview of the trends of all other cryptos. 2020 will have been a year of all records for Bitcoin. Its capitalization has multiplied by more than 2.5 over the year! In 2021, Bitcoin is progressing more slowly but still manages to gain nearly 50%. Bitcoin's capitalization has overtaken that of companies like LVMH or Bank of America.
The rally in Bitcoin can be explained mainly by the injections of liquidity, the drop in financial stress that ensues, but also the desire to institutionalize cryptocurrencies. 2021 will have been a defining year for Bitcoin. We have thus noticed the presence of strong hesitations on Bitcoin in 2021, with more recurring downward movements. The year 2022 may or may not confirm this downward trend in performance seen in 2021. The dangers would be those of an abusive speculative dynamic or even of a powerful return of risk aversion due to economic readjustments.
Indeed, knowing the sensitivity of Bitcoin to market parameters, Bitcoin could suffer from slightly less accommodating monetary policies. However, these risks of sharp corrections would be limited by a continuation of the rise in equities or a slowdown in the rise of the dollar.
2. Ethereum (ETH) : The most widely used and Bitcoin challenger
- Market Cap: $ 390 billion
- Daily volumes at the end of 2021: $ 10 to 20 billion (4% to 6% of capitalization)
- Price variation 2021: + 270%
Ethereum (ETH) is the second largest Cryptocurrency in terms of valuation. In annual average performance, ETH ranks among the best large cryptocurrencies with + 270% in 2021, which is significantly higher than the performance of Bitcoin. ETH is often considered the most widely used virtual currency. This is because of the presence of many tokens (cryptocurrencies issued by companies) that are based on the use of ETH. Ethereum can be associated with a stock market index, as the companies that make it up are players in the crypto industry.
However, ETH remains more volatile than Bitcoin. Daily volumes in relation to capitalization are proportionately greater. ETH is interesting to follow in 2022 depending on the extent of democratization among agents and the financial stress on the markets. Although the performance in 2021 is lower than the performance in 2020, Ethereum is the Cryptocurrency that benefits the most from this second wave of investor buying in 2021.
3. Binance Coin (BNB) : the crypto that invites itself into the big leagues
- Market Cap: $ 75 billion
- Daily volumes at the end of 2021: $ 1 to 3 billion (3% of capitalization)
- Price change 2021: + 1,200%
For its part, Binance Coin (BNB) went from nearly $ 5bn in capitalization at the start of 2021 to more than $ 75bn, which shows the scale of capital flows in 2021 and which quite clearly suggests the break between the increase. of 2017 and that of 2020 and 2021: investment is no longer purely speculative. Binance is among the strongest performing tokens, and this Cryptocurrency has already seen an encouraging rise in 2020.
Binance Coin, issued by the famous platform of the same name (Binance), now belongs to the very closed club of the 3 largest cryptocurrencies in the world. Binance is one of those giants who are profiting from the democratization of cryptocurrencies in individual savings. A rise in the prices of the main cryptocurrencies could only benefit the platform. However, due to the correlation between the price of BTC and Binance Coin, special attention should be paid to possible further corrections in 2022.
4. Ripple (XRP) : much more than a crypto, a passport to decentralized finance
- Market Cap: $ 30 Billion
- Daily volumes at the end of 2021: $ 2 to 6 Billion
- Price change 2021: + 297%
Among the biggest cryptocurrencies, the Ripple stands out in the landscape. The Ripple (XRP) has indeed benefited less from the return to the levels of late 2017 / early 2018, although its capitalization has been multiplied by more than 4 in the year 2020. Even if the performances were important in 2021, the Ripple has finally achieved a kind of catch-up effect.
Ripple is a start-up that has made no secret of its ambitions this year to set foot in DeFi (decentralized finance). Above all, the company offers its services to institutions in order to make fast and international payments. Although its annual average performance is statistically lower, the importance of Ripple makes it an attractive cryptocurrency.
Ripple (XRP) is a cryptocurrency widely used by many institutions. Nonetheless, its performance is less prominent and steeper than most other digital currencies. Despite everything, Ripple remains one of the great virtual currencies, regularly benefiting from bullish phases. In mid-2021, San Francisco-based Ripple was targeted by the SEC for issuing unregulated "securities", which caused the price of Ripple to fall sharply. But the latest news seems to show that the SEC may favorably reconsider its accusations. Since then, the price seems to remain around an evolutionary channel.
5. Litecoin (LTC) : a competitor of Bitcoin
- Market Cap: $ 9 Billion
- Daily volumes at the end of 2021: $ 1 to 2 Billion
- Price change 2021: + 2%
While Litecoin had performed nearly 160% in 2020, it is stagnant in 2021. Litecoin (LTC) is a competitor to Bitcoin. It retains its place in the top 25 capitalization cryptos. Its quantity is ultimately limited to 84 million LTC, against 21 million for BTC. To date, 83% of LTCs are in circulation, compared to 90% for Bitcoin. This Cryptocurrency, accepted by many agents offers a higher speed in terms of mining (2min and 30 seconds per block).
Litecoin is a cryptocurrency to keep in mind, even if this year 2021 will have caused Litecoin to lose several places in the ranking. However, unlike BTC, Litecoin is still strongly below its records. As long as the trend remains strongly bullish across all cryptos, Litecoin could benefit from a relative catch-up effect. Conversely, risks may persist with crypto tensions in 2022.
6. Cardano (ADA) : a crypto based on a double blockchain and well established in the Top 10
- Market Cap: $ 39 Billion
- Daily volumes at the end of 2021: $ 1.5 to € 4 Billion (8% of capitalization)
- Price change 2021: + 390%
Cardano (ADA) is among the 6 largest cryptocurrencies to date. Cardano is a blockchain platform that sets itself apart from its competitors by the existence of a dual blockchain. This allows secure and scalable transfers (capacity to respond to high demand).
In 2021, Cardano's price recorded an even better performance than in 2020 (+ 390% against + 350%), which allowed the virtual currency to happily exceed the previous highs of 2018. This dynamic is rather encouraging for the sequel and Cardano seems to be taking its place within the group of strong performing active cryptos.
Cardano ADA is one of the cryptocurrencies that benefit greatly from the boom observed from the fall of 2020, which explains the very strong outperformance of Cardano compared to the crypto market.
7. Uniswap: the small crypto on the rise
- Market Cap: $ 10 Billion
- Daily volumes 2021: $ 200 to 800 Million
- 2021 performances: + 200%
UNISWAP (UNI ) is a very recent cryptocurrency, launched at the end of 2020, and which is already almost in the top 20 of the world's cryptocurrencies. The goal of UNISWAP is to facilitate the trading of cryptocurrencies. Based on the Ethereum Blockchain, UNISWAP uses a decentralized financial protocol, which makes it one of the leaders in the decentralized finance sector. UNISWAP users can thus benefit from staking by providing liquidity to facilitate trade.
UNISWAP (UNI ) has been listed since September 2020 to reward former users of the platform, launched in 2018. The issuance of UNI tokens is expected to take place over 4 years to eventually issue 1 billion units. To date, 60% of the capitalization is issued. The recent success of UNI shows perhaps more encouraging prospects than other cryptocurrencies. However, it should be noted that UNI lost a few places in the rankings in 2021 despite its strong performance.
8. PAX GOLD: a cryptocurrency to protect your wallet
- Market Cap: $ 285 Million
- Daily volumes: $ 10 and 20 Million
- Price change 2021: -2.3%
PAX GOLD is a particular crypto currency, which allows you to reduce the risk in your wallet. Issued by the company Paxos, Cryptocurrency's objective is to precisely reproduce the variations in the gold price. Thus, PAXG tokens are issued at 177,000 units, with corresponding reserves via the company Paxos.
While the capitalization of PAX GOLD has almost tripled since 2020, the price of the token remains correlated with the price of gold, which stagnates over the year 2021 (after a performance of + 19% in 2020). This shows the interest of crypto investors in stablecoins.
This Cryptocurrency could thus be interesting in the coming months with regard to the movements of gold to come in 2022. Even if gold performs less overall than virtual currencies, it is a way for the investor to reduce his risk and invest digitally in gold. The fall in tensions on sovereign rates could indeed favor the stability or the rise of the PAXG. The favorable context for gold, and its low volatility (gold is 3.5 times less volatile than Bitcoin), tends towards more stable performance in its portfolio.
CRYPTOCURRENCIES: WHAT PROSPECTS FOR 2022?
2020 and early 2021 (until the crash of May 2021) will have been the period of all records for cryptocurrencies. This influx of capital is the result of a drop in risk aversion, an injection of liquidity and, above all, a desire for regulation and institutionalization. As expected, the trend remained bullish in 2021, although the market as a whole tends to slow its performance. The market's risks in 2022 are risks of a more structural nature, with a possible slowdown in upside performance. The year 2021 will also have shown the rapid emergence of some more speculative crypto currencies like SHIBA or Solana for example.