It’s not the Wild West, it's a bewildering west. Gary Gensler, chairman of the US Securities and Exchange Commission, got it right when he mentioned about the free run of cryptos at the Aspen Security Forum in August 2021. Beyond the top currencies such as Bitcoin, Ethereum and Binance, there are a whole number of memes and tokens that have proved to be mere speculative attractions.
Barring a few cryptos, which are looking to build real-world applications on their blockchain networks, the rest are mere speculative currencies riddled with extreme volatility and in some cases, pure fraud. Squid meme coin showed what happens when there is no regulatory oversight. The founders of the coin, based on the popular Netflix show, scooted with an estimated $3 million-plus from gullible investors.
Closer home, even as the government is yet to reveal its hand with regards to the proposed crypto bill, Indians have already invested close to $1 billion across the crypto basket, according to independent crypto research and analytics firm Crebaco. While the month-long selloff, accelerated by the US Fed liquidity reversal programme has pushed down most cryptos below their key price support levels, the outlook for the new asset class remains robust as ever.
While predicting price targets for cryptos is akin to throwing a dart in the dark, the following currencies, barring two meme coins, have some real-world applications being built around them.
1. Bitcoin: CMP: $46578, YTD return 60.40%
The posterboy of crypto was predicted to hit $100,000 by the end of 2021, but the price has failed to hold on to its 52-week high of $68,789 hit during the year. The store of value crypto is expected to trend lower from its current level of $46,751 to $44,000 before it resumes its upward trend. The big trigger could be that 90% of Bitcoin — 18.89 million Bitcoins of 21 million — has already been mined. According to Bloomberg, Bitcoin’s current support level is $40,000, and its initial resistance is $70,000
2. Ethereum: CMP $3857, YTD return 422.40%
In CY22, Ethereum is expected to move from the current proof-of-work protocol (PoW) stage to proof-of-stake (PoS). PoW involves confirmation of transactions and new block addition to the blockchain, while PoS involves random validation of transactions. According to Coin Price Forecast, Ethereum, whose all-time high was $4,891, will rise in the first half of CY22 to $9,000.
3. Litecoin: CMP $154, YTD return 23.40%
Created by former Google employee Charlie Lee in 2011, Litecoin was seen as a better and faster alternative to Bitcoin. Just like Bitcoin, the supply of Litecoin is limited to 84 million units. According to the latest long-term forecast by Coin Price Forecast, Litecoin will hit $200 by the end of 2022 and $250 by the end of 2023.
4. Solana: CMP $176, YTD return 11653%
Solana is seen as a superior blockchain platform given its high transaction speeds of 2,500 transactions per second compared to Ethereum’s 15. More importantly, speed comes at a lower cost of computing and without compromising on decentralisation. Given Solana's application-building functionality, the currency has a stronger risk-reward dynamic in the near term.
5. Cardano: CMP $1.23, YTD return 578%
Popularly referred to as an Ethereum killer, Cardano has seen three lower highs and roughly two equal lows around $1.20 since December 7. Chartists see the currency in a consolidation zone before it goes higher during the year. CEO Charles Hoskinson is confident that the currency will do well as their focus is on refining Cardano’s application process instead of chasing hype.
6. Avalanche: CMP $104, YTD return 3190.40%
This crypto is supposed to be much faster and is seeing more traction in terms of its acceptance. While Bitcoin blockchain processing speed is seven transactions per second, Avalanche claims to process over 4,500 transactions per second. Analysts at Bank of America see Avalanche as a viable alternative to Ethereum, which is currently the leading smart contract platform. The crypto has struck an alliance with web3 accelerator, DeFi Alliance, to launch a gaming accelerator programme.
7. Polkadot: CMP $24.48, YTD return 159%
After hitting a high of $55 in November, this crypto has come off more than 50%, following the recent meltdown in cryptocurrencies. Unlike other cryptos, Polkadot is termed as a blockchain of blockchains as it has the ability to seamlessly connect all heterogeneous blockchain networks. With an estimated 300 projects being built on the polkadot ecosystem, this crypto will be in the reckoning for long.
8. Shibu Inu: CMP $0.000030, YTD return 38.13MN%
Shiba Inu is seen more as a speculative investment currency as it lacks a credible application services network compared to its peers. Just like Dogecoin its price has been driven by pure speculative inflows and, hence, the currency could remain in the top charts amid high volatility.
9. Dogecoin: CMP $0.168, YTD 3478%
Here’s yet another meme coin that’s been on a rollercoaster ride. Dogecoin prices are more influenced by Tesla CEO Elon Musk’s comments than anything else. After initially drubbing the coin, Musk has said that Tesla would be accepting coins for its merchandise, sending it surging 24% to $0.21 in a week. In the coming year, if you are an investor in Dogecoin prices, the only thing that you need to keep a close tab on is the Tesla founder!
* Current market price or CMP as on December 20.