Crypto investors are being told not to be a fool in the coming year with their portfolios, as some Wall Street experts and private traders share how a dip may come sooner than anticipated for leading digital currency Bitcoin (BTC).
Albeit a record-breaking year, cryptocurrencies managed to reach all-time highs in 2021, with BTC climbing more than 70% since January 2021. Now, other coins such as Etheruem (ETH), Ripple (XRP), and Solana (SOL) can offer a safe haven in contrast to BTC. But how much gas is left before the market surge completely runs out?
Already there is chatter around traders, as BTC managed to dip by 30% since November after reaching an all-time high of $69,000, that price is now hovering closer to $50,000. While crypto market value has soared to $2 trillion, BTC still has a mammoth grip and impact on the entirety of the market.
It’s not just irregular fluctuations in the economy and buyer trends that have changed the future for some of the leading digital currencies.
We’re now facing greater issues that impact our fragile economy. Geopolitical issues, a quivering job market, greenwashing stocks and bonds, Federal inflation hikes, and regulatory scrutiny are pinching the crypto market from every angle.
Efforts to control the mostly decentralized coins have led to government intervention – and although it hasn’t seen traders blow off steam, just yet, the current outlook for the coming year shows traders should perhaps consider greater diversification, rather than holding on to big players.
Some of the most popular cryptocurrencies climbed a whopping 400% in 2021, so who were the biggest winners of the year?
For serious investors, ETH was more than just another valuable digital coin. It led the switch from proof-of-work (PoW) to proof-of-stake (PoS), maintaining a steady climb, averaging about 300% for 2021, with a YTD increase of 461%.
BNB is more fluid in its uses, offering better transaction efforts en masse. BNB transcended into becoming Binance Smart Coin (BSC), an alternative to the native currency. Although value fell dramatically after the intervention of the IRS and Justice Department, BNB still saw a 1,200% YTD increase.
DOGE increased its value by more than 2,800%. But it takes more than credibility for traders to swing their interest towards DOGE. After Tesla Inc. CEO, Elon Musk tweeted that the company will accept DOGE as a form of payment for their merchandise, the coin value increased by 20% in just one day.
Costing a mere $0,02 in January 2021, the coin finally managed to reach the $2 mark in May. Climbing more than 11,000%, this has to be one of the ultimate winners for 2021. Although still low in value, we might see MATIC increase as what Solana has throughout the year.
Probably one of the worst trading crypto coins of 2021, XEM lost more than 36% of its value, with a current trading value of $0,013. While XEM runs on a similar basis as BTC, the value has decreased by more than 29% in the last month.
If you’re looking to waste both time and money, throw a couple of cents towards REV. Currently trading at $0,0061, the online platform for ETH had peaked as far back as 2018 and has since decreased in value month over month.
So where do you look for diversification?
Crypto is now more mainstream than before. Amature traders have seen massive losses, investing in low-value coins that gave them nothing but slow returns.
So are we preparing for an all-time low of major coins? It’s quite difficult to predict, but some have claimed that history is simply repeating itself and that we might see BTC, the leader of the pact, run down to as low as $10,000.
As one of the top 5 digital currencies for 2021, SOL has already been on the radar of many traders and investors, and for good reason. Already we see how well Solana has performed in the last 12 months, going from $1,59 in January to its highest ever in November at $257.
Solana has already increased its value by more than 11,000% throughout 2021. Now the race is one to see whether or not Solana will be able to hedge ETH in the coming year.
It might be the new kid on the block, but it already offers better transactional processing than some of the more popular coins currently on the market. Supposedly, SOL can accommodate more than 700,000 transactions per second, while ETH only does 15 per second.
But will Solana be the light at the end of the tunnel? Or are many traders simply walking into a minefield, looking to lose more than just a few limbs?
Already LUNA has managed to increase its value by 9,500% in the last 12 months. The reason for its success comes from Asian eCommerce companies, looking to have more diversified options in cryptocurrency for the Asian market and its traders.
It might sound like a solid investment and trade, but many remain skeptical over the last crackdown of the Chinese government on Bitcoin mining, while Indian officials are now making it almost completely illegal to use any form of crypto as a method of transaction.
But LUNA has withstood these massive blows, allowing traders to ride out the wave of scrutiny it’s received from big politics. It’s become one of the more stable coins for 2021, within the Asian trading community.
Terra has positioned itself perfectly within both eastern and western markets, and it’s for this reason, and of course, its many digital capabilities that traders are jumping to get a piece of the LUNA pie.
Cryptocurrencies have made a lot of people extremely rich. But for how long will this pace keep going in the new year? Yet, Wall Street execs have shared that market volatility may subside in 2022, but their predictions aren’t always as spot-on as we might think.
Traders should now look beyond the physical value of their digital coins. Taking into account how additional efforts can increase the overall value, and how these coins have been built to operate within a traditional market now moving towards digital.
Diversification will look a lot different in 2022, and we should constantly keep a finger on the pulse of how things are rapidly changing.
Finally, one should be prepared for a rapid shift if any, as the old saying goes, “don’t put all your eggs into one basket.”