12 January 2022 | ZebPay Trade-Desk
The crypto market shot to fame and skyrocketed in 2021. The cryptocurrency space saw inflows upwards of $30 billion and the total market capitalization of this asset class, which is merely a decade old, hit $3 trillion in November 2021, from $900 billion at the start of 2021, a 3.5x growth.
The London Hard Fork upgrade to the Ethereum network was the talk of the town for the second half of last year. Among the top alts, in 2021 alone, Solana (SOL) was the winner and showed a gain of about 74,000%. GALA followed suit, but by a large margin at 31,000%, whereas The Sandbox (SAND) gained around 24,000%. Polygon (MATIC), Terra (LUNA), Solana (SOL), Fantom (FTM), Kadena (KDA), Harmony (ONE), and Decentraland (MANA), all rallied in the range of 5,000 and 20,000% in 2021. The splendid story doesn’t finish here, the coins with minor market caps, but strong fundamentals also saw good traction. As we step into 2022, investors might find it profitable to keep a lookout on Hedera (HBAR), Algorand (ALGO), Harmony (ONE), and Pancake Swap (CAKE).
| Market Capitalization ($,bn) | Price ($) | CMP ($) | |||||
| 31.12.2020 | 31.12.2021 | %change | 31.12.2020 | 31.12.2021 | %change | ||
| ETH | 84.2 | 438.1 | 420.6% | 737.8 | 3683 | 399.1% | 3,238 |
| GALA | 0.010 | 3.1 | 31217.4% | 0.0014 | 0.45 | 31210.7% | 0.32 |
| AXS | 0.03 | 5.68 | 19821.0% | 0.54 | 93.3 | 17232.3% | 72.6 |
| SAND | 0.02 | 5.38 | 24155.4% | 0.04 | 5.85 | 16309.5% | 4.73 |
| MATIC | 0.08 | 18.1 | 21233.2% | 0.18 | 2.53 | 1335.1% | 2.36 |
| LUNA | 0.32 | 30.9 | 9662.0% | 0.65 | 85.5 | 12998.9% | 73.7 |
| SOL | 0.07 | 52.7 | 74804.7% | 1.51 | 170 | 11178.1% | 140 |
| FTM | 0.04 | 5.74 | 13219.7% | 0.02 | 2.25 | 13190.0% | 2.58 |
| HBAR | 0.21 | 5.26 | 2401.0% | 0.03 | 0.29 | 812.7% | 0.27 |
| ALGO | 0.40 | 10.6 | 2554.7% | 0.33 | 1.66 | 397.0% | 1.45 |
| ONE | 0.04 | 2.71 | 7630.5% | 0.0043 | 0.23 | 5402.0% | 0.30 |
| CAKE | 0.05 | 2.97 | 5518.9% | 0.62 | 11.8 | 1786.2% | 10.9 |
There were several reasons why the altcoin space saw such an impressive growth rate. The baseline for all beings, their massive adoption. The rise of niche domains such as NFTs, Web 3.0, and decentralised finance (DeFi) have played a key role in their development and adoption. Moreover, other factors that have led to the massive euphoria in cryptocurrencies include the development of central bank digital currencies and the legal adoption of BTC in some countries.
MATIC’s rise was due to the announcement that Sequoia, Steadview, and other investors were purchasing tokens in a private round. And Polygon witnessed a code script upgrade. With the new code in place, withdrawal and deposits became quicker and integrated on various DeFi platforms. Moreover, tps increased too. Essentially, over the long run, the asset seems strong, and a valuable investment proposition. BAT’s appreciation in November came following a partnership between Brave Browser and Solana. The two companies have joined hands to bring wallet features of the Solana blockchain into Brave’s Web2 desktop and mobile browsers.
Aave is wanting to launch a service that may integrate a compliance protocol, which will permit typical ancient finance entities akin to banks, hedge funds, and market manufacturers to access DeFi. This can be expected to happen during a month or so. South Korea’s major bank, the Shinhan Bank, finished developing a proof-of-concept. The proof-of-concept has been designed to change international remittances investing in stablecoins mistreatment of the rosid dicot genus Network. one amongst the largest stories of the year towards the end, as Polkadot disclosed the primary winner in its Parachain Auction: Acala. The initiative cost about $3.5B in crowd-loaned DOT across ten projects. Polkadot with success ended its sixth parachain slot auction with Enjin’s Efinity, and is currently set to host NFTs to its network; an enormous elementary development. Metaverse tokens and diversion tokens appear to be the ensuing flight trend within the crypto market and they are already proving their value by holding a powerful foot in the rather volatile and competitive crypto market space.
DeFi king AAVE saw a decent rally at the rear of the announcement of Aave v3.0 – the primary major update to the protocol since December 2020. The planned update can improve capital efficiency, risk mitigation, decentralization, and cross-chain facilitation. As of date, Aave is live to tell the tale of Ethereum, a two-dimensional figure, and Avalanche with plans to expand to more. Ethereum DeFi “blue chips” face vital competition from non-ETH DeFi apps – Aave’s aggressive enlargement onto alternative chains and efforts to form the transfer between them through the portal appears to be a definite advantage, creating it a wise thanks to competing.
Fundamentally, LUNA appeared sturdy too. In fact, once Terra’s Columbus-5 upgrade, LUNA has been a force to reckon with. TerraUSD, Terra’s native stablecoin, is backed by the token. Hence, so as to extend the availability of TerraUSD, LUNA coins are burned. Conversely, a lot of LUNA is minted when UST’s demand dips. Burning limits the supply of Luna over time, making associate upward worth pressure within the long run, resulting in higher price levels, the same as the trend we tend to see with the EIP-1559 upgrade for ETH. The apace-increasing DeFi scheme and a replacement inexpensive bridge to the Ethereum network is one among the reasons why we’ve seen important worth growth from AVAX. The unleashing of the Avalanche bridge to Ethereum and also the protocol’s distinctive tokenomic style that gives dynamic fees associated with a token burn mechanism.
The year 2022 started with a blip. The crypto market has plunged once witnessing correction within the world exchange and is visibly in red. The digital market capitalisation has fallen by 15% since the beginning of the year. The hawkish read of the Fed was visible in the minutes of the meeting resulting in the result that an accommodative financial policy is going to finish soon, besides a sharp trimming of bond holdings. The considerations concerning inflation and early rate hikes have saddened the market mood. BTC’s plunge can even be attributed Kazakh government’s call to resign and clean up the internet amid protests, inflicting the #Bitcoin network hash rate to tumble by 13.4%. No timeline exists once the net can switch back on within the ordinal biggest BTC mining country in the world.
On top of that, investors have become a bit cautious and appear to be shying away from riskier investments like cryptocurrencies due to the emergence of the Omicron variant. As the variant spreads around the world, traditional and cryptocurrency markets have taken a hit in recent weeks. The virus could potentially disrupt global supply chains and travel, and with several countries imposing similar blockades on restrictions, it could delay a global economic recovery. Having said that, we do expect a recovery in the near future as markets appear to have bottomed out.
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Disclaimer:
This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by Author is for informational purposes only and should not be treated as investment advice.
