The world’s most popular cryptocurrencies have lost up to 80% of their value over the past year. But, even despite this, the demand for digital assets is stable. Experts interviewed by NEWS.ru told which cryptocurrencies you can invest in today, and which ones are better to forget about for a long time.
What was 2022 like for the crypto market
At the end of 2021, most cryptocurrencies, including Bitcoin, peaked, but 2022 has been a year of upheaval for the crypto community.
In early May, the Luna cryptocurrency, which was part of the TerraUSD stablecoin infrastructure, collapsed. Then in just a week, she lost 99.99% of her value. The network experienced problems after May 4, but analysts have warned about them before, pointing out that pegging to the dollar for such stablecoins brings not so much stability as risks.
In November, the FTX exchange associated with many other crypto projects collapsed, losing $ 700 million. After that, the exchange filed for bankruptcy and announced that its founder and CEO Sam Bankman-Fried was leaving his post. As it turned out, the US Securities and Exchange Commission was investigating the exchange for several months, finding out how FTX manages clients’ funds and lends them in a liquidity crisis. On December 13, it became known that Bankman-Fried was charged with defrauding investors.
Against the backdrop of this and other news, the world’s cryptocurrencies fell sharply in price.
What awaits market leaders in 2023
In the current environment, Bitcoin and Ethereum look the most attractive. These are the two main coins that can show good growth in the foreseeable future. If an investor is ready for high risks, then you can pay attention to BNB – this is the token of the popular Binance crypto exchange. The marketplace has been on the market for a long time, but the situation with FTX has demonstrated that even reliable services can close. You can also look at Dogecoin – fundamentally, the project does not bring anything new, but it has tremendous community support, including from Elon Musk.
Esperio Senior Analyst Anton Bykov:
The probability of the collapse of almost all cryptocurrencies tends to 100%. An exception should be made only for BTC and ETH, around which a serious investment infrastructure has developed that supports their legitimacy as a speculative asset. But these cryptocurrencies should be purchased with caution, as there are no reasons for the market growth in 2023 yet. So these coins can also fall in price by another 50% from the current levels. The market will need time to forget all the negativity of the outgoing year, recovery processes can only begin in 2024.
There is nothing behind all other cryptocurrencies: no interest from big capital, no products with a large number of users. Almost all the leaders of the rating by capitalization of 2017 have been forgotten by the current moment and were completely unable to prove themselves during the recent rally (DASH, NEO and others). The same awaits the current leaders and favorites of the public.
We should look for new promising projects, and not cling to old ones, which should remain in the past as waste material. Again, the exception to the rule is BTC and ETH.
A promising project is the Indian crypto platform Polygon with the MATIC token (the platform was created for integration with other blockchain systems like Ethereum. – NEWS.ru). Many projects are already being done on it, and if the market grows, we bet on the growth of this platform due to the hype and the launch of these projects. It is also definitely worth buying bitcoin, buy and hold (“buy and hold”) is the best strategy, in our opinion.
We would not bet on Ethereum due to the risks of a sell-off and community negativity due to network censorship. Binance (BNB) would also not be considered due to the risks of an attack [wishing to regulate the US authorities crypto market] on the founder and CEO of the Binance exchange, Changpeng Zhao. Cardano is still considered a non-community-accepted project.
As for stablecoins (coins with a USD note, whose value is pegged to the US dollar due to reserves. – NEWS.ru), there are no special forecasts for them. They act as a buffer to buy and hold cryptocurrencies in a bear market.
Among the currently leading cryptocurrencies, most likely, not all will grow. The whole of 2022 was like a race between Layer-1 protocols (Layer 1 is the base level of the blockchain network on which transactions take place. These are, for example, Bitcoin, Ethereum and Solana. – NEWS.ru.) and the launch of projects in their ecosystems, which gave them rapid growth in certain periods of time.
The main success awaits the right Layer-2 projects (an example of Layer-2 – Polygon (MATIC) – a cryptocurrency created on the Ethereum blockchain. – NEWS.ru.), which will automatically make the Layer-1 protocol on which they are built more popular and successful. Since the market is going through hard times right now, the most winning projects will be those that have the maximum amount of a real organic audience.