- Bitcoin (BTC-USD): As king of the blockchain, BTC will always command serious attention.
- Ethereum (ETH-USD): Recent upside suggests that investors are cautiously optimistic about future stability.
- Tether (USDT-USD): Stablecoins like Tether may play a significant role in future economic warfare.
- XRP (XRP-USD): Generally positive price action implies importance of legal guidance for cryptos.
- Cardano (ADA-USD): A popular altcoin, Cardano must get above a key technical threshold.
- Decentraland (MANA-USD): Known for its metaverse connection, MANA intrigues but is also risky.
- Dogecoin (DOGE-USD): Meme-coin fever appears to be waning for DOGE.
For the past few weeks, all anyone can really talk about was the ongoing crisis in Ukraine. With Russia deciding to attack its neighbor and thus unsettle the modern global order, the impact reverberated across multiple sectors, including cryptocurrencies. That has led digital assets to engage in wild trading though hope is slowly starting to creep in for key cryptos.
Following attempts at indirect negotiations, members of Ukrainian and Russian delegates discussed various issues designed to foster a resolution to the invasion. Although the Ukrainian delegation complained about “fundamental contradictions,” both sides signaled progress in the discussions. Ultimately, the fact that high-level negotiations are occurring is great news for capital markets, including cryptos.
True, no one should jump to conclusions about where these talks are headed. At the same time, with sanctions hurting Russia’s economy and its ruble currency, even Putin has reasons for taking an offramp. Thus, it’s not entirely unreasonable to believe in the upside narrative for cryptos.
Still, digital assets are incredibly wild, turning on a dime for any reason or no reason at all. Therefore, exercise strict money management and due diligence for the below cryptos.
With a time-of-writing market capitalization of just under $750 billion, talk of an eventual Bitcoin replacement is rather cheap. True, many other cryptos are undergirded by more exciting and utilitarian blockchain innovations. Still, as a Coindesk article revealed, the amount of BTC being transacted suggests institutional investors have given their vote of confidence to Bitcoin.
Honestly, it’s difficult to argue with the size, scope and scale of BTC. Unless something paradigm shattering occurs, Bitcoin will likely dominate the broader trajectory of cryptos for many years to come.
On that note, BTC inching closer to the $40,000 resistance level is encouraging, as it reflects optimism that the crisis in Ukraine can be resolved peacefully. Still, I would continue to monitor its price action. Ultimately, investors want to see Bitcoin break above $50,000 to put to rest the implications of a bearish head-and-shoulders looking pattern between July 20, 2021 till the present.
Undoubtedly, Ethereum forms the backbone of utilitarian applications for cryptos — and that’s not just marketing literature. The latest data suggests that Ethereum undergirds almost 3,000 decentralized applications. Obviously, the significance of this figure is the potential growth of blockchain projects, evolving from merely peer-to-peer (P2P) transactions to full-fledged decentralized ecosystems.
Still, what really matters at the end of the day is a virtual currency’s profitability potential. We can talk all day about this utility and that; if it doesn’t make money (and tons of it), the asset can quickly fall by the wayside. After all, cryptos are about scaling up technologies at speed, not slowing them down.
Based on this framework, Ethereum’s recent jolt higher is encouraging. Again, the upside implies that some investors are banking on a peaceful resolution in Ukraine. Still, be vigilant with ETH so long as it remains below its 50-day moving average, as this is a key indicator of near-term market health.
Part of a class of cryptos called stablecoins, Tether is pegged to the U.S. dollar on a one-to-one ratio, at least on paper. Originally, the idea for USDT and other stablecoins was that investors didn’t have to convert their digital assets into fiat currencies for short-term trades. Instead, they could quickly convert to USDT and then convert back to a digital coin or token of their choice.
In addition, by staying in cryptos, investors may be able to avoid certain tax implications based on their jurisdiction. Nevertheless, investors ultimately engage stablecoins for convenience and administrative reasons.
However, in the era of sanctions (and retaliatory sanctions), USDT has taken on greater importance. With centralized fiat currencies, it’s relatively easy for global authorities to squeeze recalcitrant nations. The same can’t be said about stablecoins, making USDT an interesting crypto to watch in the months ahead.
One of the most vexing stories among cryptos, anybody interested in this sector knows about the Security and Exchange Commission’s lawsuit against Ripple Labs, the originator of the XRP coin. Initially, circumstances boded poorly for XRP, with many (if not most) exchanges abandoning the digital asset.
At the heart of the matter is the SEC’s allegation that XRP is not a cryptocurrency — which vaguely has some legal guidance — but rather a clever way to sidestep securities law. On the SEC’s side, the accusation is that Ripple accrued capital from investors similar to an initial public offering. For Ripple, the team asserts that it engineered a legitimate virtual currency.
Despite the obvious headwinds, XRP has been resilient. Much of this stems from the concept that if Ripple emerges victorious, XRP would essentially be the only blockchain-based asset with a legal framework, making it the most legitimate among cryptos.
Still, Ripple has its work cut out for it in court, so it’s best not to celebrate prematurely.
Attracting investors for both its relatively low price and strong brand awareness, Cardano has long been a favorite among those speculating on alternative cryptos or altcoins. While Bitcoin rightfully receives most of the world’s attention, projects like Cardano are at the forefront of blockchain evolution.
Indeed, Cardano is a pioneer of the proof-of-stake (PoS) protocol, a consensus mechanism that basically rewards equity in the network over raw computing power, as is the case with proof of work (PoW). While PoW protocols — such as Bitcoin — didn’t attract much attention in the early days of cryptos, the sizable energy consumption of BTC mining in recent years has drawn criticism.
Still, the one major distraction for Cardano is that it hasn’t been able to corral its PoS innovation into upside market movements since late summer of last year. With ADA continuing to spiral inside a bearish trend channel, it must regain the $1 level sooner rather than later to inspire confidence.
Defined as a virtual reality platform where users can create, experience and monetize content and applications, Decentraland has gained tremendous fame for its connection to the metaverse, or the next evolution of internet connectivity. Rather than being merely a hub for cross-border information, the concept of the metaverse emphasizes integration of our personalities with digital ecosystems.
To put it another way, the first iterations of the internet were groundbreaking because in the analog era, information was confined to books, which themselves were confined in libraries or bookstores. What metaverse-related projects like Decentraland hope to achieve is a connection of ourselves without physical limitations.
It’s intriguing to be sure but the concept hasn’t delivered money into wallets, at least not since late 2021. Moving forward, it’s possible that MANA could spark a rally. However, prospective investors must also be aware that the asset has slipped below both its 50 and 200 DMA.
Perhaps everyone’s favorite meme coin, Dogecoin continues to stretch incredulity simply by staying in the game. While its community supporters assert all kinds of utility and applications that its blockchain drives, to the general public, it’s hard to shake the notion of DOGE being little more than wild speculation.
After all, the coin started off as a joke. Of course, it become one of the most talked about cryptos following its dramatic swing higher. And that’s thanks in no small part to celebrity proponents, most prominently Elon Musk.
However, the euphoria over Dogecoin really ended after Musk’s appearance on Saturday Night Live, where he perhaps introduced DOGE to millions of mainstream onlookers who could give a hoot about cryptos. It has also been difficult to know when the hemorrhaging will end.
On the other hand, if we get some good news on the Ukraine front, it’s quite possible that sentiment could return for the canine-inspired meme. It’s worth watching though actual participants must exercise discipline and discretion.
On the date of publication, Josh Enomoto held a LONG position in BTC, ETH, USDT, XRP, ADA, MANA and DOGE. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.