What Is The Next Big Cryptocurrency To Explode In 2022?

All six cryptocurrencies below could explode in 2022

Last Updated December 13th 2021
12 Min Read

Since 2020, there has been a massive change in the cryptocurrency space. The market is no longer a preserve of retail speculators but a mainstream investment drawing in institutional money. 

The mainstreaming of cryptocurrencies became most evident when Tesla, the world’s largest carmaker by market cap, started accepting Bitcoin for payments. While Tesla paused it later, the institutional interest in cryptocurrency has not slowed down. Major investment funds like Ark Invest and global investment banks like Goldman Sachs now have some skin in cryptocurrency. 

Despite the entry of institutional players into cryptocurrencies, the crypto market remains as volatile as ever. It is not a market for weak investors who cannot withstand dips of up to 50% in a matter of weeks. To give you an idea of how volatile cryptocurrencies are, consider the fact that on 3rd December 2021, Bitcoin lost $12,000 in less than 12-hours. 

Interestingly, this volatility has not deterred investors from trying a hand in the crypto market. While the crypto market is known for gains that outperform other markets, it is in 2020/21 that some of the most astronomical gains have been recorded. This is the period when some dog-themed tokens have rallied by millions of percentages. 

Quite naturally, this has got investors searching for the next big thing in cryptocurrency. If you, too, are in the search for the next millionaire-making cryptocurrency, then you are in luck. 

Once you are done reading this article, you will know which cryptocurrencies might explode soon, which means as early as 2022. 

Contents:

How To Spot The Next Big Cryptocurrency

Cryptocurrencies Potential For Profit

Other Important Cryptocurrency Analysis Metrics

How To Buy Cryptocurrency

Which Cryptocurrency Will Explode In 2022?

 

How To Spot The Next Big Cryptocurrency 

To figure out what is the next big cryptocurrency, it is important to understand where the entire craze around cryptocurrencies is coming from. The motivating factors behind the crypto craze are different for institutional and retail investors.

Retail level interest in cryptocurrencies

At the retail level, the key factor driving interest in cryptocurrencies is the hunger for quick money. In 2017, the ICO bubble saw people make millions off investments as low as $1000.

While the ICO bubble burst in 2018, a new wave of hype was built around meme coins in 2020. By mid-2021, anyone who had thrown just a few hundred dollars into meme coins like Shiba Inu became a millionaire.  

These cycles of mega-pumps have drawn a lot of investors who are looking to get rich quickly. Retail thirst for quick crypto wealth is evident in the massive leverage that cryptocurrency investors are taking upon exchanges. During the flash crash of 3rd December 2021, more than $1.5 billion was liquidated in four hours, one of the highest amounts to be liquidated so far.  

Institutional level interest in cryptocurrencies

At the institutional level, the motivating factors behind the growing interest in crypto are a mix of profits and capital security. 

Since the 2008 financial crisis, the stock markets have been going up. This is due to easy-money policies that followed the financial crisis and the share buybacks that followed. Equities have grown so much that there are now fears that they are at bubble levels. 

Interestingly, safe assets like gold are increasingly correlated to the stock markets. With inflation making fiat unattractive, institutions are finding themselves in a tough spot in terms of hedging against a possible market correction. 

This has seen cryptocurrencies, especially Bitcoin, become an attractive bet for institutional risk diversification. Institutions are also betting on cryptocurrency volatility as a potential driver for portfolio growth. 

The perception of crypto as a form of asset diversification is best captured in the sentiments of Cathie Wood, the CEO of Ark Invest. Cathie recently projected that Bitcoin could trade at $500k within this decade. Her projection is based on the idea that most of the companies in the S&P 500 will hold Bitcoin in their portfolio. 

Institutions are also aware that digital assets are an integral part of a process that has been ongoing since the 1990s, that of a complete shift from analog to digital systems. With blockchain set to completely change how we create, trade, and transfer value, institutions are betting on crypto as the next phase of tech growth. 

This structural view of cryptocurrencies at an institutional level is best captured by Arca Chief Investment Officer Jeff Dorman’s sentiments. Dorman believes there is a multiple-decade transition towards cryptocurrencies and that DeFi and NFTs point to this ongoing transition.

Cryptocurrencies Potential For Profit 

If you want to profit from the next big cryptocurrency, the first thing you need to do is keep an eye on the market capitalization

The higher the market capitalization of a cryptocurrency, the lower the chances it can give you 1000x in gains. The logic is pretty simple; there is only so much money available to go around.

For instance, it would be too ambitious to expect Bitcoin to do 1000x from its current price. That would give it a market capitalization in the 100s of trillion of dollars, much bigger than the world economy. Essentially, it would mean that all the money in the world would be going into Bitcoin, which is illogical at best. 

On the opposite end of the spectrum, it is an unnecessary risk to invest in a cryptocurrency that has a very low market cap, of say, less than $100k. While you can strike gold if such a cryptocurrency rallies, there is a good chance that you could be falling into a scam. 

Low cap cryptocurrencies are also heavily prone to pump and dump. That’s because just a single sale or purchase can move the price by a huge margin. As such, chances of being dumped on and being left with worthless bags are pretty high. 

Other Important Cryptocurrency Analysis Metrics

  • Crypto supply: The coin supply is an important measure of crypto prices because, at the end of the day, it is about demand and supply. When there is an excessively huge amount of cryptocurrency, the price can remain stagnant for long. Most importantly, pay attention to the circulating supply v total supply when it comes to supply. If the circulating supply is less than 50% of the total supply, the price can stay stagnant for long. That’s because, as new coins/tokens enter circulation, they will put downward pressure on the price. This mostly happens to cryptocurrencies that overall have low demand levels. 
  • Crypto Volatility: Volatility is good because it means the cryptocurrency you are buying can make you a lot of money in a short time. However, it also means that you can lose almost all your capital if things go south. Remember, this is a market where corrections of more than 90% are quite common in bear markets. Essentially, the less volatile a cryptocurrency is, the safer it is as an investment. 
  • Daily trading volumes: Volume measures how much of a cryptocurrency has changed hands in a span of 24-hours. Volume is an important metric because it gives you an idea of how liquid a cryptocurrency is. As a rule, the more liquid a cryptocurrency is, the better it is an investment. That’s because the actions of a single market player cannot hurt your portfolio. With illiquid cryptocurrencies, just one person selling can tank the price. 
  • Speed: This is the rate at which a cryptocurrency changes hands within 24 hours. If the turnover is too high, especially for new cryptocurrencies, it could mean that the founding team is dumping on new investors. For more established cryptocurrencies, it could mean that big news is coming up and investors are buying in expectation of a pump, or selling in anticipation of a dump. 

 

Read Also: Technical Analysis - Cryptocurrency Trading

How To Buy Cryptocurrency 

You need a broker or a cryptocurrency exchange for you to buy cryptocurrency. The type of broker or exchange you go for should be determined by your level of experience in the market. 

If you are an experienced trader, you can comfortably buy cryptocurrencies in any exchange, including decentralized exchanges. The good news is that most centralized exchanges are user-friendly, and even a beginner can comfortably use them. 

With this background in mind, let’s now go through a step-by-step guide for buying cryptocurrencies. 

1. Decide on the cryptocurrency exchange to use

A cryptocurrency exchange is basically a platform for trading cryptocurrencies. There are lots of them, but some of the most popular ones are Binance, Gemini, Coinbase, and Kraken. The biggest advantage of cryptocurrency exchanges is their low fees. However, the trade-off is that their features may be too complex for beginner cryptocurrency investors. 

For cryptocurrency beginners, cryptocurrency brokers may be a better alternative. Cryptocurrency brokers have an easy-to-understand interface, designed with beginners in mind. The downside is that they tend to have higher fees. Some of the best cryptocurrency brokers in the market are eToro and Robinhood.

2. Create an account

Once you have decided on which cryptocurrency exchange or broker to use, the next step is to create an account. Once you have created an account, deposit the amount of money you would like to invest into the brokers or exchange account. Depending on the platform, you can either deposit with a credit/debit card or wire the money from your bank account. 

The method you choose should also be informed by the fees the method carries. For instance, card companies treat crypto transactions as cash advances. This means you will incur higher interest rates compared to other everyday card transactions.

3. Make your crypto buy order

Once you have money in your cryptocurrency broker’s/exchange account, the next step is to place a buy order. The purchase process is very easy. All you need to do is choose the ticker symbol of the cryptocurrency you want, and click buy.

The best part about cryptocurrencies is that you can buy tiny bits even with the most expensive ones. Cryptocurrency brokers and exchanges allow you to buy fractional shares of any cryptocurrency you want. 

Which Cryptocurrency Will Explode In 2022?

Up to this point, you have a good understanding of cryptocurrency basics, including how to buy. The big question now is, which cryptocurrency has the potential for the most returns in 2022? 

While Bitcoin is the number one cryptocurrency by market capitalization, it is not necessarily the best if you want exponential returns on investment. For the big gains, you need to look into smaller cryptocurrencies and those whose upcoming developments could pump the price. 

Below are six cryptocurrencies that still have upside potential.

1. Dogecoin (DOGE)

Dogecoin is a meme coin that stole the show with its mega gains of 12,000% between April 2020 and May 2021. While it has pumped hard over the past year, Dogecoin still has upside left thanks to the upcoming Doge-1 mission. The Doge-1 mission involves Elon Musk, the same person that pumped Dogecoin to over $0.70 back in May 2021.

If the mission is successful, the hype factor around it could see Dogecoin easily break the $1 ceiling that it narrowly missed before the market crash in May. Besides, adoption levels for Dogecoin have been going up since Elon Musk started pumping it last year. If the hype around Doge-1 is strong, more institutions could adopt DOGE further putting upside pressure on the price.

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2. Ethereum (ETH)

Ethereum is not the kind of cryptocurrency that can give you 1000x gains, but it can easily double or triple your money in 2022. Besides, it is one of the more stable cryptocurrencies out there and easily rivals Bitcoin in terms of safety and stability. 

Going into 2022, Ethereum is likely to get a boost from the completion of the upgrade to Ethereum 2.0. Most of the work is done, and once the transition is complete, Ethereum will be faster, and its gas prices lower. This will see it entrench its dominant position in DeFi and NFTs

It is also noteworthy that one of the recent forks that are part of the shift to Eth 2.0 made Ethereum deflationary. This means as more people use Ethereum to launch projects, the value of ETH will go up

3. The Sandbox (SAND)

The Sandbox is one of the best cryptocurrency performers of 2021. Since it launched in 2020, SAND is up by 16,500%. SAND’s potential going into 2022 is linked to the popularity of the Metaverse. The excitement around the Metaverse has been building up lately, partly due to Facebook’s forays into this space. 

With many investors getting into Metaverse cryptocurrencies, SAND is in a good position for growth. That’s because there is also a lot going on within the Sandbox ecosystem itself. A play-to-earn game called Alpha recently launched on Sandbox and helped push the price from $2 to $8. With more gamers and developers now aware of Sandbox, more games could come up in 2022.

4. Solana (SOL)

Solana has performed well in 2021, with over 2000% year-to-date gains. Going into 2022, the same factors that lifted SOL in 2021 (massive adoption in DeFi and NFTs) could propel it in 2022. Solana has been widely adopted in these two markets because; it is one of the most scalable and low-cost platform blockchains. 

Solana can easily handle more than 50,000 TPS, and its costs are as low as $0.01. With NFTs gaining in demand across industries, Solana will be even more attractive to developers. Since it is a deflationary cryptocurrency, growth in demand means potentially higher prices. This gives SOL a much higher upside potential than many other cryptocurrencies.

5. Shiba Inu (SHIB)

Shiba Inu is a meme coin, just like Dogecoin, and one of the best performing cryptocurrencies since crypto became a thing. Between August 2020 and November 2021, Shiba Inu was up by 58,000,000,000%. Despite these gains, there is a lot of momentum around Shiba Inu at the moment. 

SHIB’s potential has a lot to do with the fact that hype around meme coins is still strong. Being one of the bigger and better-known meme coins in the market, Shiba Inu stands to attract a lot of the money getting into meme coins. SHIB could also get a boost from its deflationary nature. As more people buy it, the price could go up faster than other meme coins. 

6. Polkadot (DOT)

Polkadot is a platform blockchain for launching web 3.0 Dapps that can be used cross-chain. With Web 3.0 gaining momentum, Polkadot is well-positioned for growth in 2022. That’s because it is scalable, easy to use, and Dapps built on it can run on any blockchain. 

So far, Polkadot has seen growing adoption in the launch of algorithmic stable coins and DeFi apps. These two also happen to be the hottest aspects of the cryptocurrency market going into 2022. Polkadot also allows staking, and due to the strength of its fundamentals, the number of investors staking DOT will grow in 2022, further driving up the demand. 

eToro – The Best Platform To Buy Cryptocurrencies

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