In May last year, Bitcoin once again wielded its unparalleled influence on the cryptocurrency market with an update to its protocol. We are, of course, talking about the last reward halving, which is expected to continue affecting BTC and other tokens throughout 2022 and beyond.
Traditionally, Bitcoin halvings have been followed by boom or bust cycles but, as we all know, 2020 wasn’t an ordinary year. The coronavirus had far-reaching consequences for the financial market.
In the year following a halving, we would usually expect to see a strong performance from BTC, but considering the impact of COVID-19, many analysts have predicted that the benefits may be offset until later in 2021 and going into 2022.
Of course, where Bitcoin goes, altcoins tend to follow. Despite being comparatively dated, the original cryptocurrency continues to be the market leader and when it goes into a sustained bull market, we tend to see other tokens following suit.
So, assuming we see some positive price movement from Bitcoin, what are the top altcoins to buy following the Bitcoin halving?
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- Bitcoin Halving: A Recap
- What The Halving Means For The Market
- The Importance of Diversification
- 9 Explosive Cryptocurrencies to Buy After the Bitcoin Halving
- Will the 2020 Halving Repeat the Cycle of 2016?
- Where to Buy Cryptocurrencies
Bitcoin Halving: A Recap
Before we dive into our list of coins to borrow ‘post-halvening’, let’s quickly recap on what Bitcoin halving actually involves.
As we all know, the Bitcoin network relies on miners to verify blocks and effectively keep the system running. In exchange for the work they put in, these miners are rewarded with Bitcoin. It has been this way since the project launched back in 2009. However, since then, the reward paid to miners has halved at regular intervals. First in 2012, then 2016 and then again in 2020.
The halving, combined with the fact that Bitcoin has a total supply of 21 million tokens, acts as a deflationary mechanism, boosting the scarcity of the coin. In theory, this should have a positive impact on its value. Imagine, for example, if the world’s supply of gold was suddenly cut in half - we could safely expect it to then become much more valuable. This, in theory, should be true of BTC.
What The Halving Means For The Market
It’s fair to say that the cryptocurrency market looks dramatically different today than it did after the 2016 Bitcoin halving. However, one thing still appears to remain the same: the price of Bitcoin invariably has consequences for the wider market.
Due to its continued market dominance, Bitcoin is often seen as the reserve currency of the wider cryptocurrency market and is often used as a medium of exchange across major crypto trading platforms. This is why you will often see altcoin prices compared to BTC as opposed to fiat currency. This is just one reason why Bitcoin price rises tend to precede those of other cryptocurrencies.
Of course, Bitcoin also accounts for a huge proportion of the entire cryptocurrency market cap, so it naturally has a huge amount of influence over the price movement of all cryptocurrencies.
So, with these things in mind, anything that could significantly affect the price of Bitcoin - such as the BTC halving - will in theory have a profound effect on the wider cryptocurrency market.
The Importance of Diversification
From what we have discussed so far, it may seem a good idea to simply pump funds into BTC in the hope that it will grow in accordance with previous post-halving trends. However, the cryptocurrency market is notoriously unpredictable and there are a few things to consider.
Firstly, the market is a very different place compared to what it was in 2016. We have seen the rise of DeFi, a surge in the popularity of yield farming, and the emergence of the NFT trend. These exciting new projects require blockchains with the ability to support smart contracts - something which Bitcoin lacks.
Secondly, as the rewards for mining Bitcoin diminish, it is likely that many miners will jump ship and find more profitable uses for their computational power - something that will increase the pressure on the Bitcoin infrastructure, which is already comparatively sluggish.
It is essential that investors don’t focus all their attention on one token. As always, a diversified portfolio has a much better chance of success overall.
9 Explosive Cryptocurrencies to Buy After the Bitcoin Halving
The cryptocurrency market has seen renewed interest in 2021, with numerous DeFi projects coming to the fore, new technical developments in the world of blockchain and even tokens benefitting from community-led price movement. As such, there’s a fairly eclectic mix of tokens that have the potential to take off in the wake of the Bitcoin halving.
Below are the top 9 cryptocurrencies to buy in 2022:
3. ZCash (ZEC)
4. Ripple (XRP)
6. Tron (TRX)
Cryptocurrencies to invest in 2022: Bitcoin (BTC)
Of course, the most obvious cryptocurrency to invest in 2022 is Bitcoin. In 2021, the price of bitcoin increased by 220%.
There’s no getting around it, the halvening is a Bitcoin event. When the July 2016 halving occurred, it had initially looked something of a damp squib - BTC had been on a downward trend, having sunk from $750 to $673 in the year to date, and initially the halving failed to put the brakes on it. It wasn’t until the end of summer 2017 when BTC started to recover.
What started as a recovery went on to be a record-breaking price run for Bitcoin. The token had hit $1,000 by January 2017 and continued to soar. By the summer of 2017 BTC was at $4,000 and by November over $8,000. The bull then received a shot in the arm and BTC hit $20,089 on December 17 - having gained 2,916% since the 2016 halvening.
If Bitcoin was able to repeat this feat off the back of the 2020 halving, it would equate to the token reaching $273,000 by October 2021. However, as we know, the COVID pandemic causes significant disruption to the financial markets. If indeed we are yet to see the effects of the Bitcoin halving, then now could be a good time to invest in BTC.
Ethereum is one of the top altcion investments.
Ethereum is the second biggest cryptocurrency by market cap and currently the leading smart network - boasting the largest number of DeFi projects hosted on its network. Ethereum had existed for around a year at the time of the 2016 Bitcoin halving, but it eventually followed the same boom to bust trajectory that Bitcoin did.
Ethereum rode in Bitcoin’s wake, hardly benefitting at all from the halving in 2016. However, once the price of BTC started to skyrocket, Ethereum wasn’t far behind. Bitcoin’s record price run of 2017 saw Etheruem boosted to its then all-time high of $1,448 in January of 2018 - up from around $11 at the time of the halvening in 2016.
Ethereum also has some developments of its own. This year sees the launch of the much-anticipated Ethereum 2.0 upgrade, which will see Vitalik Buterin’s baby move from a proof of work to a proof of stake consensus mechanism, along with numerous other infrastructure improvements.
Naturally, this places Ethereum in a very good position for growth moving forward.
Cryptocurrencies to invest in 2022: ZCash (ZEC)
Given that is was launched after the last Bitcoin halving, ZCash may seem like a surprise inclusion in the list - it is something of an unknown quantity in this respect, afterall. However, dig a little deeper and you’ll find that many analysts are predicting a strong performance from ZCash in the coming months.
The privacy-focused token shares many characteristics with Bitcoin, having been largely modelled on the original cryptocurrency, save for a few tweaks to boost user anonymity. This has inevitably seen the value of ZEC tied to that of BTC.
In fact, despite being a relative latecomer, ZCash did see its price spike to a high of $719.90 off the back of the major BTC rally in late 2017/early 2018. Whilst we haven’t heard much from ZCash throughout 2019 and 2020, the privacy coin is said to be poised for a major comeback
Going into 2022, many analysts were predicting ‘privacy coin season’ and whilst that may not have yet become a reality, privacy is becoming an increasingly prized commodity and whilst there are other privacy tokens out there, ZCash is pegged tightest with Bitcoin and we think it’s likely to benefit from the halvening.
A leading crypto positined for huge gains in 2022 is Ripple.
To say that the so-called bankers’ cryptocurrency has experienced changing fortunes over the last year or so would be something of an understatement. A ruling by the US Securities and Exchange Commission that stipulated XRP had to be traded as a security led to a significant price drop and Ripple being dropped from several major exchanges towards the end of 2020.
However, Ripple seemed to weather the storm and had regained its pre-ruling price of $0.60 by March 2021. The token then went on to surge as high as $1.84 in April, before the entire cryptocurrency market went into decline, sending XRP back down to its current price of around $0.74.
Whilst Ripple may have taken longer to see gains off of the back of the 2016 Bitcoin halving, it has historically been part of every major market upturn. What’s more, Ripple has shown its resilience in recent months and if the Bitcoin halving leads to another boom cycle, we may see attention once again turned to tokens that can offer traditional financial institutions an inroad into the world of cryptocurrency.
Cryptocurrencies to invest in 2022: Dogecoin
One of the more interesting cryptocurrencies that could expolde higher is Dogecoin.
Dogecoin is the crypto world’s unlikely survivor. Initially started as something of a pastiche, the altcoin has somehow clung onto a certain degree of relevance and has gone on to become one of the most talked-about tokens of 2021.
Dogecoin’s strength lies in its community of loyal follows. Whilst this might sound superficial, a strong community is nothing to be sniffed at - especially after what happened with Reddit/Gamestop sage earlier this year. In fact, the DOGE community, with a little help from Tesla legend Elon Musk, has sent the token’s price soaring more than once this year.
Dogecoin is modelled on the Bitcoin blueprint, so there is a certain expectation that DOGE will benefit from any substantial BTC price increases. However, DOGE has also been touted as the people’s crypto and a viable alternative to Bitcoin. It isn’t out of the question that any substantial BTC bulls could be met with the Dogecoin community rallying once again.
Tron is a cryptocurrency that looks like an interesting speculative buy.
Tron is the cryptocurrency for the creative industries and is the brainchild of the much-fabled Justin Sun - one of blockchain’s more divisive personalities. Whilst Sun himself has done a great job of keeping Tron in the headlines, the token wasn’t actually around for the previous Bitcoin halving, having been launched in 2017, so we can’t use it as a basis for future predictions.
However, most analysts have previously noted a correlation between the price of BTC and the price of TRX, so the general consensus is that Tron will ultimately benefit from the halving. But Tron also has a few other things going for it - most notably the growing NFT trend.
Aside from DeFi, NFTs have been the biggest talking point in the crypto world for 2021 and Tron is arguably the perfect platform to facilitate the creation of such tokens by digital artists. In fact, Tron has recently released plans for its new NFT standard to make it easier for musicians, artists and celebrities on the platform to mint their own tokens.
If the NFT trend continues to grow and assuming Tron can capitalise on its suitability for the industry, we think TRX could be one to watch in the coming months.
Cryptocurrencies to invest in 2022: Basic Attention Token (BAT)
At this stage, the most surprising thing about Basic Attention Token is that it is outside of the top ten cryptocurrencies by market cap. We are talking about a project that seeks to revolutionise the world of online advertising - removing unwanted ads and replacing them with ones relevant to the user, whilst simultaneously rewarding them for viewing ads and pages online.
Historically, BAT has very much followed in Bitcoin’s wake. Following the 2016 halving, the altcoin closely mirrored BTC’s price movement, which culminated with BAT reaching around $0.90 in January of 2018 - which would remain its highest price for the next couple of years.
Of course, that particular bubble burst and the price of Basic Attention Token went tumbling down, along with Bitcoin and most other cryptocurrencies. However, BAT was very much on board for the market surges of 2021 - reaching an all-time high of $1.63 in April.
Looking ahead, Basic Attention Token has a huge amount of potential and many analysts have remarked on numerous occasions that the token is yet to realise this with regards to price movement.
As blockchain projects have become more and more ambitious, projects require more and more information streams - many of which come from non-blockchain sources. This is where Chainlink comes in. The project effectively offers a way to connect oracles and provide blockchains with real-world information in the form of smart contracts.
Whilst Chainlink wasn’t actually launched until around a year after the 2016 halvening, its price movement has shown to be pegged to that of Bitcoin. For the most part, LINK followed BTC throughout its price surges in 2021 and has also benefitted this year from being added to Grayscale’s Digital Large Cap Fund.
However, following a market downturn in May, the price of LINK has remained remarkably subdued and, for this reason, many investors have speculated that it is the best time to buy. Whilst recovery is by no means guaranteed, there’s no denying that Chainlink is currently trading close to its lowest price for the year and, given its importance in the world of DeFi, there’s definitely room for growth.
Cryptocurrencies to invest in 2022: Uniswap (UNI)
One of the hottest cryptocurrencies is Uniswap.
Uniswap is another leading DeFi project that has gone from strength to strength in 2021. Having launched in 2018, it wasn’t around for the previous Bitcoin halving so we can only speculate on how it will be affected going forward.
That being said, UNI’s price movement has mirrored BTC thus far and there’s no real reason to think this may change. Whilst the exchange is built on the Ethereum blockchain, the development of wrapped Bitcoin’s - effectively ERC20 tokens that represent BTC on Ethereum-based projects - means we shouldn’t dismiss the effect of the halving.
Aside from this, DeFi is the hottest thing in the world of cryptocurrency and many industry insiders are predicting it to grow exponentially over the coming years. Uniswap benefits from having established itself early on - something that Bitcoin itself has shown to be an important factor.
Of course, Uniswap is also likely to benefit from any Ethereum price movement and, as we have seen, the previous Bitcoin halving certainly had a positive effect on the price of Ether.
Will the 2020 Halving Repeat the Cycle of 2016?
There has been much speculation lately that the age of the altcoin is upon us. Whilst it’s certainly true that the emergence of DeFi promises to change the crypto landscape forever, it should be remembered that, as it stands, Bitcoin is still the undisputed dominant force in the market.
The latest Bitcoin halving may not have been the sole driver of BTC’s record-breaking price run in early 2021 and there is no telling how COVID may have affected the cycle that was established in 2016. It could also be said that Bitcoin has already experienced its boom cycle and is now heading downwards.
However, whereas 2017/2018 has been largely acknowledged to have been a bubble that inevitably burst, the market growth of 2021 was in fact largely curtailed by identifiable factors. Firstly, rumours of a regulatory crackdown in China put the breaks on price growth and sent Bitcoin on a downwards trajectory.
The environmental impact of blockchain has also been under increasing scrutiny - particularly projects that rely on a resource-intensive proof-of-work scheme such as that of Bitcoin. As mining becomes less profitable with each halving, this could prove a decisive factor in the longevity of BTC.
Finally, those looking for cryptocurrencies to invest in after the Bitcoin halving should remember that we are now talking about much bigger numbers. During the post-2016 halvling boom cycle, BTC reached a then record high just shy of $20,000 before tanking to less than $4,000 during the crypto market crash. At the time of writing, Bitcoin seems to have weathered the most recent downturn and is holding steady at over $32,800.
Bitcoin continues to influence the wider crypto market and it would appear that this is unlikely to change in the near future. However, cryptocurrency investors should now be looking to broaden the horizons and consider other possibilities.
Our list of nine explosive cryptocurrencies to buy after the Bitcoin halving represents a diversified collection of tokens, all of which have a huge amount of potential for growth. Of course, Bitcoin was always going to be part of the list, but the other projects we have suggested could see their fortunes improving regardless of what happens with the original cryptocurrency.
Basing investments solely on the previous Bitcoin halving would certainly be a mistake - the market is vastly different and there are far more factors to consider when selecting projects to invest in than there were in 2016.
The halvening is a big event in the cryptocurrency world and investors should be keeping a close eye on the trajectory of the market as a whole. It’s possible we may spot similarities with the last halving - albeit delayed due to the coronavirus. However, it may also be possible to spot the early signs of Bitcoin losing its grip on the market.
Where to Buy Cryptocurrencies
If you’re a relative newcomer to the world of cryptocurrency and are looking to make your first investments, then the first thing you’ll need to do is find a reputable exchange that will give you access to the market.
We often recommend eToro for both novice and experienced investors as it lists all the major tokens and allows users to buy and sell cryptocurrency via its proprietary trading platform.
Another advantage of using eToro is that the platform has plenty of information regarding the cryptocurrency market, including the latest news and updates on the top projects.
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What does the Bitcoin halving mean for other cryptocurrencies?
The Bitcoin halving - or the halvening as it has become known - refers to the halving of Bitcoin’s block mining reward. However, due to Bitcoin’s market dominance, the event usually has a knock-on effect on other leading cryptocurrencies. The 2016 halving saw gradual price increases that eventually led to the 2017/2018 boom.
Which cryptocurrencies will explode after the Bitcoin halving?
According to many experts, the top explosive cryptocurrencies to buy are Bitcoin, Ethereum, Zcash, Ripple, Tron, Zcash, Dogecoin, BAT, Chainlink, and Uniswap.
When is the next Bitcoin halving?
The Bitcoin halving is expected to take place roughly every four years. The last event occurred in 2020, so it is thought the next halvening will occur in 2024.
Which crypto should I buy in 2022?
Whilst the Bitcoin halving is a big event in the world of cryptocurrency, the market is changing rapidly at the moment and investors need to consider various factors - not least which projects are able to support DeFi and other exciting projects in the world of blockchain. Bitcoin, Ethereum and Cardano continue to be top prospects, but it is possible that other projects will soon be stepping into the limelight.
Is Bitcoin still the biggest cryptocurrency?
Much has been said about the impending age of the altcoin, but at the time of writing Bitcoin is still the cryptocurrency market leader by a considerable margin. The project is not without its problems, but the facts are that a single BTC token is still worth over $41,600.