After a year like 2021, crypto prices have their work cut out for them in 2022. The asset class has seen some of the biggest booms, followed by some of the steepest busts; now, it looks like digital currency is going to round out the year on a high note. However, there are some problems on the horizon. With worries about inflation heating up, what will be the next cryptos to explode in 2022?
The Fed meeting on Wednesday has sowed fears across the stock market. With the entity looking to drastically taper its emergency spending, investors are going to become increasingly risk-averse with their portfolios. Additionally, inflation continues to rise as a point of concern. Of course, the Fed’s plan to hike interest rates thrice over the course of 2022 feeds into this bearishness for crypto as well.
So, if investors want their crypto holdings to remain winners through the next year, it’s time for them to get selective. Arbitrage tokens, store-of-value plays and meme coins aren’t going to cut it as we head into the gauntlet of the next year. Winners are going to be found in utilitarian plays and burgeoning tech trends; these coins and tokens are going to keep their heads above water and then some.
With that said, what cryptos are looking to lead the pack of winners through the next year? Consider this grip of digital currency plays:
- Solana (CCC:SOL-USD)
- Decentraland (CCC:MANA-USD)
- Flux (CCC:FLUX-USD)
- Ripple (CCC:XRP-USD)
- Polygon (CCC:MATIC-USD)
Next Cryptos to Explode: Solana (SOL-USD)
Solana is already one of the biggest clear-cut winners of 2021. The SOL coin has boomed; those that bought in in early January at $1.40 are resting on a 13,000% gain at its current price of $183.10. This boom can be attributed to many things, be it the high-risk market trends or the network’s highly successful foray into non-fungible tokens (NFTs). But the biggest factor behind this open-source dapp playground isn’t just hype or NFT trendiness; rather, it’s Solana’s position to give Ethereum (CCC:ETH-USD) a run for its money as the king blockchain network.
Solana’s biggest edge is its scalability. As blockchain continues to become more and more ubiquitous among internet users, there will certainly be more transactions of data occurring on these chains. Some networks are simply more apt at handling larger volumes of transactions than others. Solana’s is one such network, and it is using this growing adoption to its advantage.
Take, for example, Ethereum’s hike in gas fees. Through this year, gas fees for an average transaction on Ethereum reached prices as high as $50 for a simple swap. The 2,300% growth in fees is exasperating Ethereum’s users, and Solana has become a network that many are turning to. Solana offers up to 50,000 transactions per second, and it promises fees of below 1 cent to pay for these transactions.
Ethereum is working on improving scalability through its Merge upgrade, but this is still far off. The network won’t be making its big proof-of-stake overhaul until at least summer of 2022. In the meantime, Solana continues to explode in size and market cap. Since January, the network has added 500,000 active users, and SOL’s market cap has grown to nearly $100 billion.
Decentraland (MANA-USD) Leads Metaverse Plays Into 2022
If there’s an industry that’s guaranteed to continue growing through the new year, it’s the metaverse. The metaverse might not seem essential; after all, it’s a virtual space for people to do a lot of things they can do in real life — playing games, socializing, seeing live music, etc. But, it’s a space with a massively significant backing by not only the blockchain industry but Big Tech as well. Facebook’s rebrand to Meta Platforms (NASDAQ:FB) is proof enough of that; if a tech giant with a market cap of nearly $1 trillion and a history so rich it has spawned movies about its founding is making a rebrand of this magnitude around an industry, that industry is going to stick around.
This makes the case for Decentraland’s MANA token as a crypto to watch going into next year. The metaverse, while holding a major Silicon Valley backing, is still something many want to see decentralized. They don’t want Meta putting their hands into the virtual reality space; they want it to be by the people, for the people. Decentraland is leading investors in this direction.
Decentraland is a blockchain-based metaverse that invites any and all to come experience its sandbox world, chock-full of activities. One can buy a plot of land, develop it and have their friends come over and hang out in it. They can go play games or travel the main streets of the digital world. They can do all of these things from the comforts of their home, too. And with major backing from institutions like auction house Sotheby’s, as well as multiple musicians who performed at the network’s first music festival, there’s plenty of support for MANA.
Next Cryptos to Explode: Flux (FLUX-USD)
Flux is certainly the smallest crypto here, but do not discount the network. With Web 3.0 becoming a more widespread phenomenon, Flux is sure to be one one of the next cryptos to explode in popularity. The network, which lauds itself as the “Amazon (NASDAQ:AMZN) Web Services of blockchain,” is in a position to challenge even the largest of web service giants.
The Flux network is taking on AWS with its own product suite, but while AWS offers software-as-a-service (SaaS), Flux offers blockchain-as-a-service (BaaS). The differences aren’t significant to the end user from a performance perspective. However, BaaS products allow users to combine the powers of both cloud computing and distributed public ledgers to their advantage.
Flux’s FluxOS allows for the same types of functions huge swaths of the internet tap AWS for; it can run oracles, it allows people to host servers, and it allows anybody to store data, no matter how private. Most importantly, though, it promises to be reliable. Users can run FluxNodes, which keep the network running. Nodes connect users to BaaS services, and with a distribution of FluxNode operators worldwide, users can be connected to the fastest nodes possible through geospatial recognition.
Of course, anybody who uses the internet has been hearing about the AWS outages in recent weeks. In December, AWS has seen two outages. These outages took down massive chunks of the internet, preventing users from using many of the most trafficked social media and e-commerce platforms, as well as online gaming servers. In a world where Flux sees widespread adoption, these outages would be a thing of the past, thanks to the legions of FluxNode operators helping to support the service.
Ripple’s (XRP-USD) SEC Lawsuit Nears Closer to an End, Leaving Optimistic Outlook for 2022
Ripple had gotten a bad hand throughout 2021. The Securities and Exchange Commission’s (SEC) lawsuit prevents trading of Ripple on U.S.-based exchanges. Even without this barrier, the suit also scares away potential investors, who don’t want to put their money on a company that’s in hot water. Still though, there are hyper-bullish investors who see Ripple as a gateway to the future of international money wiring. And with indicators pointing toward an end to this suit in 2022, Ripple might be in a position to majorly break out and make up for lost time.
Using Ripple, users can make international money transfers in the blink of an eye; it’s as simple as converting a fiat to XRP, sending that XRP to the recipient, and having them convert the XRP into a fiat of their choice. The network threatens to dethrone the world of international wire transfers as we know them, and its XRP coin will play a large part in that.
Since Ripple has been embroiled in a legal battle for this entire calendar year, it has forfeited a lot of the impressive gains the industry has seen. Its price of 81 cents is higher than the 22-cent price it began the year with, yes. But, would XRP have seen the 100%, or even 1,000%, gains its peers have demonstrated? That, we will never know.
But, Ripple continues to keep investors updated in goings-on, even hosting a summit event last month. And now, it is preparing to hopefully draw the SEC suit to a close. Indeed, the network is gaining an upper hand after the court ordered the SEC to write a letter justifying information it holds confidential under deliberative process privilege (DPP). If it can’t do this, Ripple might be able to walk out of the courtroom victorious sooner rather than later; of course, this can bring a price explosion along with it.
Next Cryptos to Explode: Polygon (MATIC-USD)
Like others on this list, Polygon is a network built to ensure the smooth sailing of the blockchain industry. As it becomes a more widely adopted technology, the number of active users will cause issues for some of the largest networks, like proof-of-work network Ethereum; even scalability play Solana has seen its instance of technical troubles. Polygon aims to skirt the possibility of future bottlenecks through layer-2 scaling.
Polygon is built to support the Ethereum network. It does this by existing as a layer atop Ethereum. Using Polygon, users can take their transactions from the Ethereum chain to the Polygon chain. It alleviates the traffic seen on the main network. Additionally, it allows Polygon to offer some very low transaction fees to its users.
As a layer-2 solution, there’s a multitude of ways through which users can move transactional data from one chain to another. Actually, Polygon offers 10 different tools through which to do this. Most recently, the network added its Polygon Zero feature, which uses zero-knowledge rollup technology to easily port data across networks with little energy usage.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.