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Thursday, August 18, 2022

3 Cryptocurrencies That Can Still Be Huge Winners in 2022

No, this year hasn’t started out as any investor wanted. That’s especially true for anyone interested in cryptocurrencies. Even the biggest and most well-known digital coins are down by 20% or more.

Don’t despair, though. There’s still a long way to go before the year ends. Here are three cryptocurrencies that can still be huge winners in 2022.

Image source: Getty Images.

1. Ethereum

Ethereum (CRYPTO:ETH) especially stands out as one of the well-known cryptocurrencies that have crashed so far this year. The price of its native Ether token is down close to 35% year to date. However, there are a couple of reasons to expect a major reversal for Ethereum.

Every big pullback for cryptocurrencies we’ve seen in the past has presented a great buying opportunity. As the second-largest cryptocurrency in the world based on market cap, Ethereum should bounce back if investors flock back to crypto.

Perhaps the best argument about Ethereum’s comeback potential, though, is the major upgrade that’s on the way. Originally referred to as Ethereum 2.0, this upgrade will ultimately make the Ethereum blockchain faster, more scalable, and cheaper to use.

The second phase of the upgrade is planned for later this year. The Beacon chain that enabled staking will merge with the Ethereum mainnet. The third phase is slated for 2023. It will introduce shard chains that dramatically expand the blockchain’s capacity.

Ethereum already ranks as the most popular blockchain for developers. With this upgrade on the way, its appeal should broaden. And its price could once again soar.

2. Terra

Terra (CRYPTO:LUNA) has quickly become one of the top blockchains around. It currently ranks No. 9 on CoinMarketCap’s list of the biggest cryptocurrencies based on market cap.

The digital coin skyrocketed more than 14,000% in 2021. There were multiple catalysts along the way. One of the biggest came in October with a proposal passing to begin burning LUNA coins. Another was in November with Terra stakeholders voting to upgrade the TrackTerra tax app. This move paved the way for LUNA to gain popularity with governments across the world taxing cryptocurrencies. 

But why could a stable coin be a big winner this year? Developers are increasingly choosing the Terra blockchain to build new decentralized finance (DeFi) apps. And Terra isn’t just a stable coin; it supports an array of stable coins.   

Also, owners of LUNA can earn juicy rewards by staking their tokens. In a highly volatile market, Terra’s yields could be appealing. 

3. Avalanche

Quite a few blockchains are vying to unseat Ethereum as the preeminent platform for smart contract developers. None has succeeded so far. However, Avalanche (CRYPTO:AVAX) has certainly gained a lot of ground.

Avalanche’s price vaulted around 3,000% higher last year. It currently holds the No. 12 spot on CoinMarketCap’s ranking of cryptocurrencies by market cap. 

The key attraction for Avalanche is its super-fast blockchain. No other blockchain supporting smart contracts can match Avalanche’s transaction finality (the time to irrevocably add a transaction to the blockchain) of less than two seconds.

Avalanche could deliver another sizzling performance in 2022 despite the rocky start. Top accounting and consulting firm Deloitte announced in November that it plans to build a disaster recovery platform on the Avalanche blockchain. It won’t be surprising if other developers pick Avalanche for creating DeFi apps going forward.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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