- With 2022 around the corner, we take a look at the top three cryptocurrencies positioned for growth
- Bitcoin, Ether, and Solana are likely to run to new heights as investors pile into them
Looking Into 2022, These Three Coins are Likely to See New Heights
As 2021 comes to a close, market participants are already shifting their attention to all that will unfold in the coming year. Looking back, however, might be especially useful if we want to imagine what the future will hold for cryptocurrency.
To this end, traders and investors have a ton of developments to digest from the past 12 months. While some have helped digital assets climb further in price and adoption, others have temporarily halted the tokens’ wild ride.
In practice, major cryptocurrencies saw increased attention from investors as digital asset adoption accelerated during the entire year. Despite some hardships, like China banning cryptos several times, bitcoin and other tokens are looking optimistic as we move into the new year.
In more detail, let’s take a look at three cryptocurrencies most likely to receive an even bigger boost in 2022. In a nutshell, these are Bitcoin, Ether, and Solana.
Bitcoin to Continue with Fresh Gains in 2022
First, the undisputed leader in the market: Bitcoin. The price of bitcoin has seen stratospheric rallies throughout the past couple of years. More recently, in 2020, bitcoin logged an annual gain of about 800%. Further, in 2021, the orange token is about to finish the year with an advance of roughly 70%.
As we look forward, it’s likely that several major developments will play a role in the continued rise of bitcoin. For one, the original cryptocurrency is expected to witness an increased level of adoption as it makes its way into mainstream finance.
That said, there are about 100 million bitcoin wallets belonging to people around the world. As the year progresses, this number is projected to keep growing. Mainstream bitcoin adoption is seen spreading across all levels of society. From retail traders, entering the market from their living room, to whole countries embracing bitcoin.
Countries Weigh Bitcoin as Legal Tender
On this note, the first country to adopt bitcoin was El Salvador. The small Latin American nation adopted the volatile digital asset in September 2021 as its legitimate national currency. Now, alongside the US dollar, Salvadorans use bitcoin to pay for their coffee, rent, or haircut.
This trend will likely continue as more countries weigh the pros and cons of having bitcoin as legal tender. In more detail, 2021 finished with several countries considering taking the leap. Among them, Ukraine, Brazil, Cuba, Panama, and Paraguay.
Bitcoin and the Big Banks
In addition, major investment banks are increasingly interested to offer bitcoin to their clients worldwide. With this in mind, Wall Street mainstays are already exposed to bitcoin’s price through bitcoin futures. These products, however, do not offer actual bitcoin, but futures contracts tied to the price of the cryptocurrency.
That leads us to the question of why don’t banks offer genuine bitcoin. And the answer is that US banks cannot provide custody over bitcoin because it’s not yet regulated. In that context, the US Securities and Exchange Commission (SEC) is largely responsible to introduce certain rules and regulations over bitcoin and crypto in general.
Moreover, SEC Chairman Gary Gensler, who has taught bitcoin and blockchain at MIT, is in favor of bitcoin and crypto assets. Bitcoin “has been and could continue to be a catalyst for change in the fields of finance and money,” Mr. Gensler recently said.
On that front, price predictions for bitcoin for 2022 put the token on pace to reach new record highs. A Bloomberg report released in December 2021 says bitcoin “appears to be on a trajectory for $100,000.”
Ethereum Upgrades to Further Boost Its Price in 2022
The second token positioned for more gains going into 2022 is Ether. The second-biggest cryptocurrency, right after bitcoin, Ether powers the Ethereum network. In more detail, the Ethereum blockchain saw remarkable growth in 2021. In this light, Ether’s climb is expected to continue into the new year.
So far in 2021, the Ethereum token rallied nearly 500% to reach levels above $4,000 apiece. As 2022 unfolds, predictions for Ether place it even above $10,000.
To this end, upgrades to the Ethereum network are likely to boost its price further. Ether’s blockchain transitioned to Ethereum 2.0 late in 2021. The same upgrades will continue into 2022 as the crypto community finds more ways to improve the network.
Some of the major upgrades to the Ethereum network include the London hard fork, which introduced coin burning. Another one is the Altair upgrade which was rolled out in October 2021. Looking ahead, the Ethereum Beacon Chain is expected to launch in 2022. In practice, the Beacon Chain will transition the network from Proof-of-Work to Proof-of-Stake and the Ethereum 2.0 will be complete.
Institutional Interest in Ethereum Keeps Growing
Further, professional money managers and investors are increasingly attracted to Ether for its blockchain capabilities. The emergence of applications such as DeFi and NFTs has made Ether a hot commodity. DeFi, short for decentralized finance, has seen major inflows of capital, alongside NFTs, non-fungible tokens. Both sectors of the cryptocurrency industry have been at the forefront of the crypto rally in 2021.
With 2022 right around the corner, DeFi and NFTs will almost certainly continue to make waves. That’s when we move to our third candidate for crypto positioned for significant growth next year.
Solana as a Powerful Blockchain Solution
If we are talking about game-changers like DeFi and NFTs, we cannot miss mentioning Solana. Relatively new, Solana was founded in 2017 as an open-source project. Presently, Solana is home to many of the leading DeFi and NFT applications.
In practice, Solana promises to do everything Ethereum does but better. In other words, Solana boasts better transaction speeds and lower fees compared to Ethereum.
Solana has its own cryptocurrency, also named Solana (ticker SOL). In 2021 alone, Solana has soared roughly 12,000% to reach prices near $200 per token. That put the token at a valuation of about $60 billion.
With this in mind, Solana is expected to continue on its upward trajectory as more people learn about its potential and qualities.