Best cryptocurrency for 2022: Here’s what you need to know!

Highlights

• High inflation calls for investing in assets that can minimize the impact of price rise on spending capacity

• Cryptos are volatile, their prices can swing in any direction over a very short time

• Three cryptocurrencies mentioned below can be a close watch in 2022 due to a range of factors

Calendar 2021 was a strange year. The pandemic did not go away completely, but economic conditions improved, with new jobs added. At the same time, inflationary pressures took some sheen off, prices of even basic commodities rose sharply.

It was natural for people to find avenues where their money could appreciate to minimize the impact of high prices. For some, stock market and the S&P 500 Index was the place to park money, and for others it was the riskier, but at the same time more rewarding, cryptocurrency market as the preferred choice for investment.

As we now enter 2022, with the same baggage of soaring prices of food, energy and houses, a lot of us have the same question – ‘Which is the best cryptocurrency to invest in 2022?’

Also read: Cryptocurrencies vs. stock market: What can be the best pick for 2022?

Best crypto to invest -- Hints from 2021

Before going any further, let us know how the crypto markets fared in 2021.

Bitcoin, the most popular cryptocurrency, took off in the initial months of the year as if there was no looking back. In less than four months into 2021, Bitcoin price more than doubled. In the first half of 2021, Canada approved the first Bitcoin ETF to trade on the Toronto Stock Exchange (TSX), S&P Dow Jones came up with Bitcoin indices, and retail investors’ interest soared to new heights, thanks to online brokerages and popularity of exchanges like Coinbase. This was the time when Coinbase IPO made a stellar debut on the NASDAQ.

But things quickly changed. The plunge in Bitcoin price was so sharp that between mid-April and mid-July, more than half the value was lost. From approximately US$29,000 on January 1 to approx. US$65,000 on April 14 to under-US$30,000 on July 20, 2021, it was a year full of surprises. In early November, BTC price crossed US$68,000, but is hovering under US$50,000 as of now.

Shiba Inu, which was the ‘most viewed’ crypto of 2021, had peaked to a market cap of more than US$13 billion in mid-May. A sharp plunge caused the market cap of SHIB crypto to fall to near US$3 billion level, where it stayed until early October. The scene changed, and market cap crossed US$40 billion by the end of October. As of now, SHIB has a price of US$0.000036, with a market cap of US$20 billion.

Also read: Bitcoin vs. Ethereum – All you must know before 2021 ends

The likely contenders for 2022

Extreme price volatility in crypto assets means it is neither possible, nor advisable to prophesize the fall or rise in any particular crypto.

That said, there are some likely contenders. Here are top three.

1. Ethereum (Ether)

Ether, we all know, is the second largest cryptocurrency. But what many may not know is how it is not like Bitcoin or Shiba Inu or Dogecoin.

Ether has utility, a definite utility within the Ethereum’s blockchain network. This one aspect is enough to make Ether a close watch. Last year, non-fungible tokens (NFTs) dominated headlines for their high values, and new altcoins like Chainlink, which use Ethereum’s network, found backers.

In the cryptocurrency world, Ethereum remains the leading blockchain network used by developers to build decentralized apps and smart contracts. Solana and Cardano are also finding patronage but as of now, Ethereum’s market dominance is unshakeable. While Bitcoin envisions becoming currency like the USD or CAD, Ether is a native token that can thrive within the Ethereum’s ecosystem.

Data provided by CoinMarketCap.com

Overall, 2021 was a better year for Ether backers as compared with Bitcoin investors. As of now, Ether is up approximately 400 per cent on year-to-date (YTD) basis, while Bitcoin is up approx. 90 per cent.

2. Dogecoin (DOGE)

Why Dogecoin is difficult to answer! But 2021 taught us how any crypto asset’s price can rise or fall in no time on the back of a tweet by some billionaire.

1. Elon Musk’s tweet on Bitcoin energy consumption was the trigger for a sharp fall in BTC price. But a tweet where he suggested working with DOGE developers fueled a bull-run in Dogecoin. A so-called meme currency, DOGE entered the top ten cryptos by market cap list in 2021. This is no mean feat at a time when any cryptocurrency needs to have multi-billion-dollar market cap to make the cut.

Also read: Top cryptos by market cap that ruled in 2021

After hovering at under US$0.10 level until early-April, DOGE price peaked to over US$0.70 by early-May, with the market cap reaching nearly US$90 billion. As of now, the price is under US$0.20 and the market cap has plunged to US$23 billion.

Data provided by CoinMarketCap.com

Dogecoin also has utility, at least according to the project’s developers. It is a crypto one can use to tip users on Reddit and Twitter for sharing good content. Dogecoin is a fun crypto token, and the interest of people in other meme currencies like SHIB, make DOGE a likely contender for some gains in 2022.

3. Decentraland (MANA)

The last couple of months of 2021 were more about metaverse than any other thing. This fictional world provides users the opportunity to not just play games and own NFTs, but also to monetize their holding like a gas station or a bank or a piece of real estate that exists in virtual reality.

Axie Infinity, The Sandbox, and Alien Worlds are some other metaverse projects, but MANA might be the preferred choice of metaverse lovers in 2022. This is because of some late developments like a piece of land on Decentraland selling for over US$2.4 million.

Decentraland is ranked in top 30 cryptos by market cap, but it has lost value of late. As they say, MANA may be available at a discount for crypto investors.

Also read: These play-to-earn cryptos that may explode in 2022

Best cryptocurrency for 2022: Here’s what you need to know!

Is there a “best cryptocurrency to invest in 2022”?

There is no single best cryptocurrency to invest in 2022, nor there is a list. Crypto investments are risky, and it is important to always remember that the timing of purchase and sale matters a lot. A few Bitcoin investors in 2021 would have gained, and a few may have lost, and it is all about the timing.

Even then, the three cryptos – Ether, DOGE, and MANA – are a close watch due to multiple reasons like the use of Ether token within Ethereum’s ecosystem, and the low-price per token of both Dogecoin and Decentraland.