Which cryptocurrency will rule 2022? Here’s a look

Bitcoin and Ethereum have given around 67 per cent and 430 per cent return in 2021. The stellar return is the reason why retail participation has been growing in the country. Bitcoin dominance, however, has been on a steady decline since 2017, as it saw a sharp drop in its dominance from 70 per cent to 40 per cent this year. It seems users are drifting away from Bitcoin to discover new tokens. Will 2022 promise to be another great for Bitcoin and Ethereum despite the recent volatility? Which new tokens are expected to dominate the rally in 2022? Here’s a look. 

Bitcoin 

Bitcoin has been the oldest and the largest cryptocurrency. It was launched after the meltdown of 2008 when the governments across the globe were printing money leading to inflation. What was launched as a decentralised currency has undergone a change since then. It is now used more as an asset which even after the ups and downs of the year has managed to give 60 per cent return. Compared to this Nifty, the 50 stock benchmark index for Indian stock markets, has given the return of over 20 per cent.   

“Bitcoin has been the trendsetter for crypto price movements in the last decade or so and will continue to take the lead on the same. It continues to go as a store-of-value asset and the institutional demand also continues to increase with time,” says Minal Thukral, EVP-Growth & Strategy, at CoinDCX. 

Ethereum 

Ethereum is the second oldest virtual token. It is a decentralised blockchain for peer-to-peer network that executes smart contracts. “Ethereum has been the other most important crypto asset in the evolution of the space. It is a protocol that allows developers to build on top of its blockchain infrastructure. With the ever-growing developer community and the new ETH2 rollout, 2022 is going to be an important year for Ethereum,” says Thukral. 

Protocol Tokens 

Another set of cryptocurrencies that will continue to be hot in space for the coming year shall be the ecosystem of protocol tokens. 

Experts say that the two key themes emerging this year are – Layer 1 protocols that enable DeFi and smart contracts as well as the Metaverse. “Coins such as Solana, Cardano, Terra, Polkadot, Avalanche and Polygon are among the favourites in the Layer 1 space. Metaverse concept is still evolving though coins such as Decentraland, Axie Infinity, The Sandbox, Gala etc. have done tremendously well this year. Overall, investors who invest in a basket of coins rather than being picky with one or two coins often benefit the most,” says Vikram Subburaj, co-founder and CEO of Giottus Cryptocurrency Exchange. 

 “There are still a lot of challenges that need to be solved around the inter-portability of blockchains, their scalability, scalability in mining, etc. Protocols like DOT, MATIC, SOL, etc. who are addressing different such problems will be the key,” says Thukral. 

Defi 

“DeFi had a great 2020 and with that year, we were able to build a very solid foundation for decentralised finance. That being said, we are still in the early days of DeFi and are building the fundamental legos of the same. Hence, decentralised exchange tokens (UNI, SUSHI, DYDX, etc.), lending and borrowing cryptocurrencies (COMP, AAVE, etc.), and many more will continue to be key drivers of DeFi in 22,” says Thakural 

NFT 

Last, but not the least, NFT will continue to be a hot space in 2022 as well. NFTs will continue to disrupt the gaming industries, art and creatives industries along with many more in the years to come. “Top NFT tokens like MANA, AXS, SAND, etc. shall continue to gain traction in the coming year,” says Thakural. 

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