The number of digital assets is constantly increasing. Identifying the best projects for profitable investment is becoming increasingly difficult.
In today’s article we will analyze promising altcoins of 2022 with great potential and excellent foundations, and tell about upcoming events that may affect their price. We will also pay attention to forecasts in the top altcoins 2022, possible investment risks and reliable exchanges, where it is safest to buy altcoins both for a beginner and an experienced trader.
What are altcoins?
Virtual currencies are spreading all over the world. The most popular of these is Bitcoin. The term “altcoins” includes all other cryptocurrencies other than BTC. Their legal status is not defined in most countries of the world, but is gradually being adjusted – there is an active search for their place among the objects of civil rights. In 2022, altcoins are promising investment instruments, which accelerated the processes of digitalization of business and economy in all areas.
The term “altcoin” is a combination of two English words: “alternative” and “coin. The concept is widespread because almost every cryptocurrency is an altcoin. You can often hear the word “altcoin” used as a synonym for cryptocurrency.
There are several approaches to defining alternative currencies. According to the concept of Investopedia, any cryptocurrency that meets all of the following conditions is considered an altcoin:
- is not Bitcoin;
- is based on its own blockchain;
- has its own network and at least a few users.
Despite the fact that many sources provide different information, the true origin of altcoins is in 2011 (that is, shortly after the creation of Bitcoin). That’s when the second cryptocurrency, little known today – NameCoin – was developed. It became known as the alternative coin. Over time, thousands of new cryptocurrencies were created. Most of them can be freely traded, although the low liquidity of lesser-known coins prevents effective day trading. That is why it is better to buy promising altcoins 2022.
For a successful purchase, it is necessary to remember that there are four main types of altcoins according to their structure, application and purpose:
- stablecoins. Created to prevent excessive price fluctuations in the cryptocurrency industry. Secured by real values (e.g., gold or fiat currencies) to guarantee the security and stability of quotes;
- utilities, or service tokens. They have a wide range of uses. They can be used for ICOs, as well as for managing a cryptocurrency project, for employee compensation, or for loyalty programs;
- security tokens. Closely related to business. They act like securities because they offer holders income from potential profits or dividend payments;
- mining altcoins. These include all cryptocurrencies (except Bitcoins) that are based on the process of mining. This is the largest group of virtual coins.
Opportunities in the cryptocurrency market in 2022
The beginning of 2022 cannot be called successful for the cryptocurrency market. In fact, in the case of each of the promising altcoins by capitalization and popularity, there was a collapse that exceeds 40% of the November 2022 highs. We can certainly talk about a bearish trend reversal, but this is also a time of new opportunities. While leading cryptocurrencies such as Bitcoin or Etherium have passed key resistance zones, many altcoins have fallen significantly in 2022, which could be a good time to expand your investment portfolio in the long term.
Experts warn that at the end of last year, the market entered a period of “cryptozyma,” which is a wave of declining quotes. This is due to recent events in the world, as well as the current state of the economy. Record inflation, the US Federal Reserve’s announced interest rate hike, the ongoing COVID-19 pandemic, and the military escalation of the Russia-Ukraine conflict have all affected 2022’s promising altcoins.
In turn, large cap investors are changing strategy during a bear market and choosing emerging assets that provide a lower probability of profit, but at the same time – free from major collapses. Falling prices could be a great opportunity to buy promising 2022 altcoins for much less money than in 2022.
Top 5 promising altcoins in 2022
The past year has been amazing in many ways. We recorded the growing acceptance of Bitcoin as a means of savings, the increasing importance of Stablecoin, and the massive development of NFT. There has been a tangible increase in the use of virtual currencies as an investment by individuals, banking institutions and even countries alike.
We recommend to study in detail the top altcoins of 2022 for investment, so as not to experience the lost profit syndrome or FOMO, as it was with Bitcoin and a dozen other crypto-projects after it.
Ethereum
Ethereum is the most promising altcoin, an open-source platform that allows the development of a number of decentralized applications. De facto, these can be anything from voting software to in-store payment tools. As with Bitcoin, all ETH transactions are recorded on the blockchain. However, an innovation was the ability to record changes in the network through a smart contract algorithm. By the way, NFTs owe their existence to this technology.
The functionality of Ethereum reduces transaction costs, reduces obstacles arising from bureaucracy, and ensures maximum security of transactions.
Solana
Solana is a general-purpose blockchain, in some ways similar to Ethereum, but aiming to be a better alternative for modern Internet applications. It is based on a different technical component, forcing developers to use the compiled programming language Rust instead of Solidity or Vyper. It allows to implement decentralized projects (DeFi), non-interchangeable tokens (NFT), high-tech trading platforms, games and dozens, if not hundreds, of other services.
The main advantage of Solana is its scalability, as well as its throughput of over 700,000 transactions per second.
Solana’s native currency is SOL. It is used to cover transaction fees as well as staking to support the network. The coin is among the top altcoins of 2022 by all parameters. Adding it to the portfolio is worth it for the long term.
Cardano
If you’re looking for a unique and promising altcoin for 2022, look no further than Cardano (ADA).
It is believed that due to the advanced technology used in the project, the price can increase significantly in the long term.
The coin, having entered the promising altcoins, has long been considered undervalued, hence, it makes sense to invest in it.
Polkadot
Another project that earned a place in the top altcoins of 2022 is the Polkadot token, introduced in August 2020. It was created to solve the problem of interoperability (interaction between different networks). The technological advantages are significant – suffice it to mention that no hardforces are needed to improve it, and the network itself is capable of confirming up to 1,000 transactions per second.
Avalanche
Avalanche is a promising open-source altcoin that provides a multi-blockchain environment for smart contracts. It is mainly intended for DeFi applications. It supports high performance – up to 4500 transactions per second – and scales perfectly. Block build time in 1 second makes it an excellent choice for financial transactions.
Conclusion
Altcoins are still a new and not fully understood area of technology. It is an industry with special mechanisms. It is full of opportunities, but there are plenty of pitfalls. In addition, new rules are still being implemented, and some systems are still under development and not always reliable. Of course, as the industry develops, it becomes more and more stable and reliable.
When buying promising altcoins, some investments will inevitably be unsuccessful. In any case, try to learn a lesson so that your next steps will be more balanced.
