Crypto investors are told not to be a fool of their portfolios for the coming year as some Wall Street pundits and private traders are reporting that a slump for the leading digital currency could come sooner than expected.
Although it was a record year, it did Cryptocurrencies managed to hit all-time highs in 2021, being BTC has increased by more than 70% since January 2021. Now other coins like, and, unlike BTC, can offer a safe haven. But how much gas will be left before the market recovery stops completely?
There is already chatter around traders as BTC has managed to drop 30% since November after hitting one All time high of $ 69,000, and that price is now moving closer to $ 50,000. While the crypto market value has soared to $ 2 trillion, BTC still has a tremendous impact and influence on the overall market.
It’s not just erratic economic fluctuations and buyer trends that have changed the future of some of the leading digital currencies.
We are now facing bigger problems affecting our fragile economy. Geopolitical problems, a trembling job market, greenwashing of stocks and bonds, federal inflation hikes and regulatory reviews are weighing on the crypto market from every angle.
Efforts to control the mostly decentralized coins have led to government intervention – and while traders haven’t let off steam yet, the current outlook for the coming year suggests that traders may want to consider diversifying more, rather than large players to hold on.
This is what awaits you in this article
Some of the most popular cryptocurrencies are up a whopping 400% in 2021. So who were the biggest winners of the year?
For serious investors, ETH was more than just another valuable digital coin. It led to the change from proof-of-work (PoW) to proof-of-stake (PoS) and sustained a steady increase averaging around 300% for 2021, with a YTD increase of 461%.
is more fluid in its use and offers better transaction attempts en masse. The BNB became Binance Smart Coin (BSC), an alternative to the local currency. Although the value fell dramatically following the intervention of the IRS and Justice Department, BNB was still seeing a 1,200% YTD increase.
increased its value by more than 2,800%. But dealers need more than just credibility to steer their interest in DOGE. After Elon Musk, CEO of Tesla (NASDAQ :), tweeted that the company would accept DOGE as a means of payment for its goods, coin value increased by 20% in just one day.
It was only $ 0.02 in January 2021 and finally hit the $ 2 mark in May. With an increase of more than 11,000%, this has to be one of the ultimate winners for 2021. Although the value is still small, we could see MATIC as what Solana has during the year.
Probably one of the worst-traded crypto coins of 2021, losing more than 36% of its value with a current trade value of $ 0.013. While XEM runs on a similar basis to BTC, it’s down more than 29% in the last month.
If you’re looking to waste your time and money, throw pennies towards it. The online platform for ETH, currently trading at $ 0.0061, had its peak back in 2018 and has since depreciated month by month.
Looking for diversification
So where are you looking for diversification?
Crypto is more mainstream now than it was before. Amateur traders have suffered massive losses by investing in low value coins that have brought them slow returns.
So are we preparing for an all-time low in major coins? It’s pretty hard to predict, but some have claimed that history just repeats itself and that BTC, the leader of the pact, could plunge as low as $ 10,000.
Then who will be your lifeline?
As one of the top 5 digital currencies for 2021, it was already on the radar of many traders and investors, and for good reason. We’re already seeing how well Solana has done over the past 12 months, from $ 1.59 in January to its all-time high at $ 257 in November.
Solana has already increased its value by more than 11,000% in the course of 2021. Now the question is whether Solana can protect ETH in the coming year or not.
It might be the new kid on the block, but it already offers better transaction processing than some of the most popular coins currently on the market. Allegedly, SOL can handle more than 700,000 transactions per second while ETH only handles 15 per second.
But will Solana be the light at the end of the tunnel? Or do many traders simply step into a minefield to lose more than a few limbs?
Has already managed to increase its value by 9,500% in the past 12 months. The reason for its success lies in Asian e-commerce companies looking for more diversified options in cryptocurrency for the Asian market and its traders.
It may sound like a solid investment and trade, but many remain skeptical of the Chinese government’s recent crackdown on the Bitcoin mining, while Indian officials are now making it almost entirely illegal to use any form of crypto as a method of transaction.
But LUNA has withstood these massive blows, allowing traders to weather the wave of scrutiny it receives from big politics. It has become one of the more stable coins for 2021 within the Asian trading community.
Terra has positioned itself perfectly in both the Eastern and Western markets, and for this reason, and of course because of its many digital capabilities, traders are jumping up to get a piece of the LUNA pie.
Cryptocurrencies have made many people extremely rich. But how long will this pace continue in the new year?
However, Wall Street executives have indicated that market volatility could subside in 2022, but their predictions aren’t always as accurate as we might think.
Traders should now look beyond the physical value of their digital coins. Taking into account how extra efforts can add to the overall value and how these coins were developed to function in a traditional market that is now moving towards digital.
Diversification will look very different in 2022, and we should keep our finger on the pulse of how things are changing rapidly.
Finally, be prepared for a quick shift, if at all, as the old saying goes: “Don’t put all your eggs in one basket”.
Source: Crypto News Deutsch