After the speculative peak of spring and autumn 2021, cryptocurrencies started a fairly healthy correction process with the crashes of May and December 2021. With the Covid-19 crisis, the intense risk aversion of the beginning year 2020 caused a major low point on many cryptocurrencies. The easing of financial stress that followed, the massive injections of liquidity, as well as the recent desire for institutionalization caused an extremely powerful rally in virtual currencies which led to two resounding crashes. But, each time, the market recovered very quickly, resuming dazzling progress.
Some cryptos still show 3 or 4-digit performance over 1 year. The challenge at the start of 2022 will be to seize any bullish or bearish opportunities, despite medium-term risks due to the overall evolution of the market.
1. Bitcoin: the benchmark cryptocurrency
Daily volumes at the end of 2021: €20 to 30 billion (3.5% of market capitalization)
Price change 2021: + 48%
Bitcoin (BTC) remains the main crypto currency and gives a good overview of the trends of all other cryptos. 2020 will have been a record year for Bitcoin. Its capitalization was multiplied by more than 2.5 over the year! In 2021, Bitcoin progresses more slowly but still manages to gain almost 50%. The capitalization of Bitcoin has exceeded that of companies like LVMH or Bank of America.
The rally on Bitcoin is mainly explained by liquidity injections, the resulting fall in financial stress, but also the desire to institutionalize cryptocurrencies. 2021 will have been a defining year for Bitcoin. We have thus noticed the presence of strong hesitations on Bitcoin in 2021, with more recurring downward movements. The year 2022 could, or not, confirm this trend of declining performance observed in 2021. The dangers would be those of an abusive speculative dynamic or even a powerful return of risk aversion due to economic readjustments.
Indeed, knowing the sensitivity of Bitcoin to market parameters, Bitcoin could suffer from slightly less accommodating monetary policies. Nevertheless, these risks of sharp corrections would be limited by a continued rise in equities or a slowdown in the rise of the dollar.
2. Ethereum: Bitcoin challenger and most used crypto
Daily volumes at the end of 2021: €10 to 20 billion (4% to 6% of market capitalization)
Price change 2021: + 270%
Ethereum (ETH) is the second cryptocurrency in terms of valuation. In average annual performance, ETH ranks among the best major cryptocurrencies with +270% in 2021, which is significantly higher than the performance of Bitcoin. ETH is often considered the most widely used virtual currency. This is explained by the presence of many tokens (crypto currencies issued by companies) which are based on the use of ETH. ETH can be associated with a stock index , insofar as the companies that would compose it would be the players in the crypto industry.
However, ETH remains more volatile than Bitcoin. Daily volumes in relation to capitalization are proportionally larger. ETH is interesting to follow in 2022 depending on the extent of the democratization of agents and the financial stress that the markets will experience. Although the 2021 performance is lower than the 2020 performance, Ethereum is the cryptocurrency that benefits the most from this second wave of investor buying in 2021.
Capitalization: €75 billion
Daily volumes at the end of 2021: €1 to €3 billion (3% of capitalization)
Price change 2021: + 1,200%
For its part, Binance Coin has gone from nearly €5 billion in capitalization at the start of 2021 to more than €75 billion, which shows the scale of capital flows in 2021 and which suggests quite well the break between the rise of 2017 and that of 2020 and 2021: investment is no longer solely speculative. Binance is one of the fastest performing tokens, and this cryptocurrency had already seen an encouraging rise in 2020.
Binance Coin, issued by the famous platform of the same name ( Binance ), now belongs to the very closed club of the 3 largest crypto currencies in the world. Binance is one of those giants who are taking advantage of the democratization of crypto currencies in individual savings. A rise in the prices of the main crypto currencies could only benefit the platform. However, due to the correlation between the price of BTC and Binance Coin, one must be particularly attentive to possible further corrections in 2022.
4. Ripple: much more than a crypto, a passport to decentralized finance
Daily volumes at the end of 2021: €2 to €6 billion
Price change 2021: + 297%
Among the biggest cryptocurrencies, the ripple stands out in the landscape. Ripple has indeed benefited less from the return to the levels of late 2017/early 2018, although its capitalization has been multiplied by more than 4 over the year 2020. Even if the performance was significant in 2021, Ripple has finally achieved a sort of catch-up effect.
Ripple is a start-up that has made no secret of its ambitions this year to set foot in DeFi (decentralized finance). The company primarily offers its services to institutions in order to make fast and international payments. Although its average annual performance is statistically lower, the importance of the ripple makes it an interesting cryptocurrency.
Ripple is a cryptocurrency widely used by many institutions. Nevertheless, its performance is lower and steeper than most other digital currencies. Despite everything, Ripple remains one of the great virtual currencies, regularly benefiting from bullish phases. In mid-2021, San Francisco-based Ripple was targeted by the SEC for issuing unregulated “securities”, which caused the price of Ripple to fall sharply. But the latest news seems to show that the SEC may favorably reconsider its charges. Since then, the price seems to remain around an evolutionary channel.
5. Litecoin: a Bitcoin competitor that remains among the main virtual currencies
Capitalization: €9 billion
Daily volumes at the end of 2021: €1 to €2 billion
Price change 2021: + 2%
While Litecoin had performed by nearly 160% in 2020, it is stagnating strongly in 2021. Litecoin (LTC) is a competitor to Bitcoin. It retains its place in the top 25 cryptos by capitalization. Its quantity is ultimately limited to 84 million LTC, compared to 21 million for BTC. To date, 83% of LTC is in circulation, compared to 90% for Bitcoin. This cryptocurrency accepted by many agents offers faster mining speed (2min and 30 seconds per block).
Litecoin is a crypto currency to keep in mind, even if this year 2021 will have caused Litecoin to lose several places in the ranking. However, unlike BTC, Litecoin still remains well below its records. As long as the trend remains strongly bullish on all cryptos, Litecoin could benefit from a relative catch-up effect. Conversely, risks may persist in the event of crypto tensions in 2022.
6. Cardano: a crypto based on a double blockchain and well established in the Top 10
Daily volumes at the end of 2021: €1.5 to €4 billion (8% of capitalization)
Price change 2021: + 390%
Cardano (ADA) is among the 6 largest cryptocurrencies to date. Cardano is a blockchain platform that differs from its competitors by the existence of a double blockchain. This allows secure and scalable transfers (capacity to meet high demand).
In 2021, Cardano's price recorded even better performance than in 2020 (+390% against +350%), which allowed the virtual currency to easily exceed the previous highs of 2018. This dynamic is rather encouraging for the sequel and Cardano seems to take its place within the group of high-performance active cryptos.
Cardano is one of the virtual currencies that strongly benefits from the boom observed from the fall of 2020, which explains the very strong outperformance of Cardano compared to the crypto market.
7. Uniswap: the little crypto on the rise
Capitalization: €10bn
Daily volumes 2021: €200 million to €800 million
2021 performance: +200%
UNISWAP is a very recent cryptocurrency, launched at the end of 2020, and which is already positioned almost in the top 20 virtual currencies in the world. UNISWAP's goal is to facilitate cryptocurrency trading. Based on the Ethereum Blockchain, UNISWAP uses a decentralized financial protocol, which makes it one of the leaders in the decentralized finance sector. UNISWAP users can thus benefit from staking by providing liquidity to facilitate exchanges.
UNISWAP has been listed since September 2020, in particular to reward former users of the platform, launched in 2018. The issuance of UNI tokens is expected to take place over 4 years to eventually issue 1 billion units. To date, 60% of the capitalization is issued. UNI's recent success shows perhaps more encouraging prospects than other virtual currencies. Nevertheless, it should be noted that UNI has lost a few places in the rankings in 2021 despite its strong performance.
8. PAX GOLD: a cryptocurrency to protect your wallet
Capitalization: €285 million
Daily volumes: 10 and 20 million €
Price change 2021: -2.3%
PAX GOLD is a particular crypto currency, which allows you to reduce the risk in your portfolio. Issued by the company Paxos, the objective of the cryptocurrency is to reproduce very exactly the variations in the price of gold . Thus, PAXG tokens are issued at 177,000 units, with corresponding reserves via the Paxos company.
While the capitalization of PAX GOLD has almost tripled since 2020, the price of the token remains correlated to the price of gold, which has stagnated over the year 2021 (after a performance of +19% in 2020). This shows the interest of crypto investors in stablecoins.
This virtual currency could thus be interesting in the coming months with regard to the movements of gold to come in 2022. Even if gold generally performs less than virtual currencies, it is a way for the investor to reduce his risk. and to digitally invest in gold. The fall in tensions on sovereign rates could indeed favor the stability or the rise of the PAXG. The favorable context for gold, and its low volatility (gold is 3.5 times less volatile than Bitcoin), makes it possible to tend towards more stable performance in its portfolio.
Crypto currencies: what prospects for 2022?
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