After a second year in which COVID-19 hit the world, global economies looked for different ways to achieve economic revival. It led to a brutal shift to digital economies. Wholesale and retail investors bet on cryptocurrencies, and many came out winners, although others lost out as well.
These ecosystems have exceeded expectations despite market volatility, and mass adoption continues. It is becoming easier to access cryptocurrencies through exchanges, so everyone has the opportunity to invest. Below, we will tell you about the 10 cryptocurrencies that showed great potential in the first quarter of 2022.
2021: NFTs, Meme Coins, and the Metaverse
With NFTs, meme coins, DeFi (decentralized finance), and the metaverse, the crypto market exploded and cemented itself as the future of internet money. In November, cryptocurrencies reached a market capitalization of $2.8 trillion, unimaginable to many.
Different fintech and VCs are betting on cryptocurrencies and their new financial instruments. For example, at the close of 2021, there was $280 billion locked up in the DeFi market, which is just 10% compared to the $2.8 trillion crypto market.
NFTs are in the development phase and have gained ground in the main social networks, as has already happened with Twitter. Likewise, it won’t be long before Instagram becomes a place where users can circulate their NFTs and even transact them. Zuckerberg spoke about this at SXSW 2022 in Austin.
We are working on bringing NFTs to Instagram in the near term. I’m not ready to announce exactly what that’s going to be today, but, over the next several months, the ability to bring some of your NFTs in, and hopefully over time be able to mint things within that environment.Mark Zuckerberg in conversation with Shark Tank Daymond John at the SXSW 2022.
10 Cryptocurrencies with a Promising Future in Q1’22
The best-positioned cryptocurrencies for 2022 will be those exploring ways to interact with NFTs and mechanisms in DeFi. For example, payments with cryptocurrencies, stablecoins, and, finally, those exploring the metaverse. 2022 will bring surprises for everyone, and cryptocurrencies will be very present.
1. Bitcoin (Bitcoin, BTC)
Bitcoin, the digital gold, is the best-known cryptocurrency in the crypto ecosystem. It was the first blockchain and cryptocurrency, so it is the most valued by many. Small countries like El Salvador or fintech startups like Microstrategy have bet on Bitcoin as the future of cryptocurrencies.
Bitcoin Balance Q1’22
The beginning of 2022 was not very good for Bitcoin, in contrast to the close of 2021. At the end of last year, it was close to $70,000, and many even predicted it would reach $100,000. However, it is currently hovering around 42 thousand dollars, although many consider that it is only a «bad streak,» and by mid-year, it could lift.
Despite Bitcoin’s fall, its market continues to grow, and companies like Bitso prove it. This Mexican cryptocurrency exchange has just announced this March 2022 the upcoming launch of its Bitso Card debit card. It will allow receiving deposits in Mexican pesos and provide a rewards scheme, cashback, which will reward the user with fractions of a bitcoin. To obtain it, users must have an account with Bitso and sign up for a waiting list.
Bitcoin is the number one cryptocurrency in market capitalization, yet there are many skeptics since its consensus mechanism causes damage to the environment. Nevertheless, the cryptocurrency created by the mysterious Satoshi Nakamoto dominates the market and remains a great investment option.
2. Ethereum (Ether, ETH)
Ethereum is a decentralized blockchain pioneer in implementing smart contracts and decentralized applications, thereby standardizing the first applications of this technology. It forms the backbone of the new internet known as Web 3.0 with its significant innovation in ICOs, stable coins, decentralized finance, and NFTs.
2021 became the year of NFTs, and this boom was made possible by the Ethereum ecosystem. Bored Ape Yacht Club, Crypto Punks, and Beeple’s works were the collections of NFTs created on the Ethereum network that generated millions of dollars.
Ethereum has implemented several updates to its protocol, making it more sustainable in-network fees. They may also make their native currency, Ether, deflationary. Because of this, Nigel Green, CEO, and founder of deVere Group, thinks it will outperform Bitcoin in the long run.
Ethereum Balance Q1’22
In the first quarter of 2022, Ethereum has seen a drop of $680, or an approximate price of $3,030. Even with this decline, predictions indicate growth of more than 100%.
3. Terra (LUNA)
Terra is a blockchain that revolutionizes the market for stablecoins, which are pegged to the value of other currencies or assets. This blockchain operates under the Proof of Stake consensus mechanism, and LUNA is its native cryptocurrency.
The main stablecoins on this blockchain are TerraUSD (UST) (US dollar), TerraCNY (Chinese yuan), TerraGBP (British pound), TerraKRW (Korean won), TerraEUR (European Union euro), and TerraSDR (International Monetary Fund).
Conventional stablecoins such as USDC (Circle) and USDT (Tether) maintain their link to the US dollar through fiat reserves. In contrast, Terra’s stablecoins are algorithmic. They retain their value through programming rules whose objective is to keep the stability and balance of the asset.
Terra had over 100 projects in DeFi, Web 3.0, and NFTs. It sought to become the blockchain that dominated the smart contracts’ ecosystem. Its main protocols were Mirror Protocol, where synthetic assets can be created and used, and Anchor Protocol, which offered a savings account with returns of up to 20% in its Annual Equivalent Rate (AER) on stablecoin deposits. This high percentage changed, and they agreed by voting to pay variable interests to avoid draining the reserves. However, things went out of control between May 8-11, and in just a couple of days, Terra’s UST and LUNA collapsed dramatically.
LUNA Balance Q1’22
Luna Foundation is the organization behind the development of the Terra blockchain. In March 2022, it purchased 5,934 BTC, equivalent to approximately $250 million. The goal was to bring BTC’s backing reserves of stablecoin Terra US (UST) to more than $10 billion, as announced by Do Kwon, founder of Terra.
This cryptocurrency had a slight increase to $85.5091 at the close of 2021. So far in Q1’22, its price fluctuated slightly to above $95, making it one of the most promising cryptocurrencies for this year. Despite its good perspectives, it collapsed in May 2022.
4. Harmony (ONE)
Harmony is a blockchain that works with the consensus mechanism, Proof of Effective Participation. It is the first to use the Sharding technique that achieves security, decentralization, and scalability. ONE is its native cryptocurrency; with it, owners can pay network fees of less than 1 cent. It is possible thanks to its innovative technology in its consensus mechanism.
By 2021, there would be more than 200 decentralized applications on Harmony, including DeFi platforms and NFTs. Different mechanisms exist to communicate with other ecosystems, such as Ethereum (ETH 2.0).
ONE Balance Q1’22
The ONE token at the beginning of 2022 tested its historical maximum with a price that reached 0.377 cents. However, almost by the end of March, the value of this cryptocurrency fell and currently trades at 0.15 cents.
5. Solana (SOL)
Solana was created in 2017 as the blockchain protocol with the highest transaction throughput of any ecosystem. Its innovative consensus mechanism called Proof of History facilitates the structure of the main consensus mechanism, Proof of Stake. The result is a blockchain capable of processing more than 50 thousand transactions per second.
It makes it ten thousand times faster than Bitcoin, four thousand times faster than Ethereum, and 2.5 times faster than Visa. For this reason, it was one of the best performing cryptocurrencies in 2021, with a return of over 10,000%. Because of its speed of transaction completion, Solana has a growing ecosystem that helps decentralized finance and NFTs applications become more accessible to users.
The blockchain has less than a penny network fee, so wholesale and retail investors can utilize its decentralized applications. Despite its exponential growth this year, there is still an investment opportunity, as the ecosystem is in its beta period. So, it is in an experimentation phase with specific errors to solve in the future.
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SOL Balance Q1’22
From September last year to Q1’22, its users increased by 300%. Two significant wallets bolstered this: Solflare and Phantom, launching mobile apps for iOS devices and strong user participation in the network’s NFT market.
Even though SOL grew 9.860% during Q1’22, its value dropped almost 100%. Last December, its price was approximately $190, and in just three months, it was trading at $101. However, even with this drop, predictions say that it will recover and surpass its historical maximum of last November 6, when it reached 259 dollars.
6. Sandbox (SAND)
Sandbox is a decentralized virtual world where users can design, share and sell assets in the form of NFTs. Its metaverse is one of several virtual worlds that are trying to change the dynamics of video games by rewarding both creators and players.
Sandbox runs on the Ethereum network using the ERC-20 standard, with which its SAND cryptocurrency is created. It bets on Web 3.0 with its decentralized model focused on users owning pieces of the internet.
The game allows users to access three products. First, 3D objects that live in the metaverse, which can be tools, characters, animals, clothing, and anything used in a video game. These objects are created as NFTs using the ERC-1151 standard.
Another product is a marketplace where users can sell the objects created. Finally, it allows the free creation of 3D video games, in which users can use NFTs previously made or purchased in the marketplace.
With its dynamic of creating a 3D game without the need for code, it changed the way users and developers interact with video games. Moreover, in Sandbox, users have absolute ownership over their creations. At the beginning of March 2022, it reached 2 million registered users.
SAND Balance Q1’22
SAND is going down so far in 2022, as are many other cryptocurrencies, as from closing 2021 oscillating $5, it is currently worth $3.3970. It is expected to recover and surpass the $8.4 reached at the end of last November.
7. Algorand (ALGO)
Algorand is a zero carbon footprint blockchain that uses a unique consensus mechanism called Pure Proof of Work. It aims to solve the «Blockchain Trilemma» by being a decentralized, secure, and scalable ecosystem.
The Marshall Islands government chose this blockchain to host its digital currency (CBDC) through its various agreements. It thus seeks to provide 2.2 million economically disadvantaged people with the opportunity to access multiple financial instruments.
Algorand Foundation announced the launch of a fund aimed at developing DeFi projects. It will provide ALGO with 150 million to drive the growth of its ecosystem. On the other hand, Borderless Capital launched a $500 million fund to develop DApps in Algorand.
Large investors and small countries are putting their trust in this blockchain to massify their financial objectives. For this reason, it can be a big bet for 2022.
ALGO Balance Q1’22
According to AlgoExplorer data, the Algorand blockchain added more than 6 million new accounts to its network during Q1’22, which represents a gain of 35%. After closing 2021 at USD$0.33, ALGO increased 200% with a value of $0.89 by Q1’22.
8. Chiliz (CHZ)
Chiliz is a fintech redefining how sports fans interact with their favorite teams. Its central platform is Socios (Partners), where users can access various voting forms to influence decisions that affect their favorite teams.
Users can purchase Fan Tokens of teams such as Barcelona FC, Juventus, and Paris Saint-Germain, among many others. Socios also offers Fan Tokens for other sports such as mixed martial arts (UFC), tennis (Davis Cup), motorsports and e-sports organizations.
Users can vote to select a New Jersey design or decide the matchups for a team’s exhibition games. In some cases, they can help choose players to join the following season. Smart contracts enable voting by executing transparently and automatically.
Due to their potential to transform the sports consumption experience, Fan Tokens exploded this year, selling $250 million. The founders of Chiliz and Socios predict that this market will grow to $10 billion in the next five years. Therefore, 2022 could be a great year to invest in Fan tokens.
CHZ Balance Q1’22
The price of CHZ dropped from 0.2950 cents at the beginning of 2022 to 0.2206 cents. If anything, it is among the best-performing cryptocurrencies so far in 2022. It may reach 0.6522 by the end of the year.
9. Cosmos (ATOM)
Cosmos is a blockchain protocol that enables the communication between various ecosystems. It is designed to generate an interconnection between multiple blockchain systems through three systems: Tendermint Core BFT Consensus, IBC, and Cosmos SDK. It uses a Proof of Stake consensus mechanism, and ATOM is its native cryptocurrency.
Interoperability and communication capabilities between external and internal protocols are critical for the mass adoption of blockchain technology in real-world applications. Cosmos seeks to connect the various blockchains and, at the same time, connect this network with real-world applications.
For mass adoption, it is necessary to have this type of functionality. That is why the Cosmos ecosystem is essential for the future of cryptocurrencies.
ATOM Balance Q1’22
ATOM started the year at $34.90 and has been down $5 in 2022. It is currently worth $29.25 and could reach $45 by 2022.
10. Avalanche (AVAX)
Avalanche is a blockchain that enables the creation of custom blockchains and decentralized applications. Its native coin, AVAX, functions as the blockchain’s unit of account for paying network fees and staking. One of its key features is EVM (Ethereum Virtual Machine) support that allows you to build and migrate Ethereum projects.
Its main competitor is Ethereum, also focused on building DApps through smart contracts. However, it is 200 times faster, with a throughput of 4,500 transactions per second. With network adoption in 2021 and institutional demand for blockchains with smart contracts, it has plenty of room for growth by 2022.
AVAX Balance Q1’22
Avalanche starts its first-quarter 2022 down, as it was worth $114.23 at the beginning of the year and is currently worth $86.95. Although many expected it to reach above $100 again, it dropped 30% due to Terra’s collapse.
Translated & from Spanish & updated by Shebatt Quiñones, May 18, 2022.
Frequently Asked Questions Cryptocurrencies
It is a digital currency that uses cryptography and blockchain technology to be secured. You may «mine» cryptocurrencies, which means you can exchange them and even create them.
Many experts say the cryptocurrency with the best future is Bitcoin, perhaps because it is the first one and has a limited amount of BTC.
Bitcoin, Ethereum, Binance Coin, Cardano, and Solana.
The best positioned as safest and most reliable cryptocurrencies to invest in are Bitcoin, Ether, and Solana.
Dogecoin is the cheapest cryptocurrency, with a value of $0.2223.