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The first month of 2022 has been tough for cryptocurrency investors. Most major cryptocurrencies have lost around 20% of their market value since the start of the year. But such dips are common in the cryptocurrency space and every dip should be seen as a buying opportunity by long-term investors.
Let’s take a look at three cryptocurrencies that could gain momentum in 2022.
Ethereum
Ethereum (CRYPTO:ETH) is the second largest cryptocurrency in the world, valued at a market capitalization of US$328 billion. At the time of writing, the ETH token is down 27% in 2022 and 40% below all-time highs.
Given the popularity of Ethereum, investors should expect the cryptocurrency to skyrocket, especially if market sentiment turns bullish in the coming months. Unlike Bitcoin, Ethereum does not intend to compete with fiat currencies. It is a feature-driven cryptocurrency that allows developers to create dApps or decentralized applications.
The Ethereum blockchain network aims to revolutionize the current banking system and the way peer-to-peer lending platforms work. As its blockchain network continues to rapidly integrate projects, demand for the ETH token is expected to increase over time, driving prices higher.
Another major catalyst that will have a positive impact on the demand for ETH tokens is the upcoming network upgrade that will significantly reduce transaction fees.
Additionally, Ethereum is the largest NFT (non-fungible token) market host. Any purchase or sale of NFTs on its blockchain network requires the use of the ETH token. In a nutshell, Ethereum investors are well positioned to benefit from the expanding NFT ecosystem.
Solana
Similar to Ethereum, Solanait is (CRYPTO:SOL) The blockchain network also allows developers to create and execute smart contracts. But unlike Ethereum, transaction fees on Solana are fractions of a penny.
If you want to sell a $10 NFT on a blockchain network, doing so on Solana makes financial sense because transaction fees on Ethereum can even exceed $100. Due to its low cost and scalability, Solana recently raised US$250 million in two funding rounds, which will be deployed to improve the utility and infrastructure of the network.
The SOL token jumped over 10,000% in 2021 and it is now the seventh largest cryptocurrency in the world, valued at a market capitalization of $33.78 billion. However, it is also down 40% in 2022, which helps buy the dip.
Earth
The last cryptocurrency on my list is Earth (CRYPTO:LUNA), valued at a market capitalization of US$21 billion, making it the ninth largest cryptocurrency in the world. The LUNA token also jumped around 14,000% last year and is now down 50% from all-time highs.
Last October, it was proposed to start burning LUNA tokens, which will reduce the overall supply. Currently, there are over 400 million LUNA coins in circulation. Another enabler for LUNA was the vote of stakeholders to update the TrackTerra app, which will allow it to gain traction with governments taxing cryptocurrencies.
The Terra blockchain is also used to build decentralized finance (DeFi) applications and the network also supports multiple stablecoins. Owners of the LUNA token can earn income by staking the coin, making it attractive in a volatile and unregulated environment.