With the May 2021 collapse, crypto currencies started a pretty healthy corrective process after the speculative high in early 2021. The strong risk aversion in early 2020, which coincided with the Covid-19 crisis, created a significant low point in several crypto currencies. Following the release of financial stress, huge liquidity injections, and a recent drive for institutionalization, virtual currencies saw a tremendous rise that culminated in a thunderous collapse in May. The market, on the other hand, rapidly rebounded and is again on the rise. There are many of cryptos with 1-year returns in the three or four figures. Despite medium-term dangers owing to the general market direction, the challenge towards the end of 2021 will be to grasp any bullish or bearish chances.
1. Bitcoin: The Industry's Reference Crypto Currency
€600 billion in capitalization
Volumes on a daily basis by the end of 2021: €20-40 billion (5 percent of capitalization)
Change in price in 2020: + 170
Bitcoin (BTC) continues to be the most popular crypto currency and provides an excellent window into the patterns of all other cryptos. 2020 will be a watershed year for Bitcoin. Its market value grew by nearly 2.5 times in a single year! Bitcoin has exceeded the market value of businesses such as LVMH and Bank of America.
Bitcoin's rise is mostly explained by liquidity injections and the consequent decrease in financial stress, but also by the desire to institutionalize cryptocurrencies. Bitcoin will reach a tipping point in 2021. The risks would be those associated with an abusive speculative dynamic or a strong reversion to risk aversion as a result of economic readjustments.
On the other hand, Bitcoin should continue to be driven by the dropping dollar index, ongoing liquidity injections, and its future application. However, chances of corrections may materialize in the medium term as a result of potential liquidity constraints.
Read also: Bitcoin Halving: Everything You Need To Know
2. Ethereum: A Major Competitor To Bitcoin
€ 230 billion in capitalization
Volumes on a daily basis by the end of 2021: €15-30 billion (10 percent of capitalization)
Change in price in 2020: + 340
Ethereum (ETH) is the second most valuable cryptocurrency by market capitalization. ETH ranks among the top major crypto currencies in terms of average annual performance. ETH is often referred to be the world's most commonly utilized virtual money. This is because a large number of tokens (crypto-currencies issued by businesses) are dependent on the usage of ETH. The ETH may be compared to a stock market index, since its constituents would be the crypto industry's participants.
ETH, on the other hand, continues to be more volatile than Bitcoin. Daily volumes are proportionately higher in comparison to capitalization. ETH is worth monitoring in 2021, depending on the degree of agent democratization and financial hardship experienced by markets.
3. Binance Coin: A Crypto That Wants To Play It Big
€45 billion in capitalization
By the end of 2021, daily volumes will range from €1 to €3 billion (4.5 percent of capitalization)
In 2020, the price increased by 110 percent.
For its part, Binance Coin's market capitalization has risen from almost €1.7 billion to more than €3.5 billion, demonstrating the magnitude of capital flows in 2020 and indicating the split between the 2017 and 2020 rises: investment is no longer purely speculative.
Binance Coin, which is issued by the same-named platform, is one of the top ten crypto currencies in the world. Binance is one of the behemoths that has benefited from the democratization of crypto currencies in personal savings. The platform would profit from an increase in the prices of key crypto currencies. However, given the price connection between BTC and Binance Coin, any additional dips in 2021 should be closely monitored.
4. Ripple: A Passport To Decentralized Finance
€30 billion in capitalization
By the end of 2021, daily volumes will range from €2 to €6 billion.
Price increase in 2020: 135 percent.
Ripple is one of the most prominent crypto currencies on the market. Although its capitalisation has grown by more than 2.5 times over the year 2020, Ripple has benefitted less from the rebound to late 2017/early 2018 levels.
Ripple is a company that has made no secret of its desire to get its feet wet in the DeFi space this year (decentralized finance). The business mainly caters to institutions that need to make quick and worldwide payments. The significance of ripple makes it an attractive cryptocurrency, despite its statistically inferior average yearly performance.
Ripple is a crypto currency that is extensively utilized by a variety of businesses. Nonetheless, it has a lower and steeper performance than most other digital currencies. As a result, Ripple fits into the larger virtual currency structure, with positive periods occurring on a regular basis. Ripple, located in San Francisco, was recently pursued by the SEC for selling unregulated "securities," causing its price to plummet. However, recent developments seem to indicate that the SEC may rethink its accusations.
5. Litecoin: A Cryptocurrency That Ranks Among The Top Virtual Currencies
€8 billion in capitalization
By the end of 2021, daily volumes will range between €1.5 and €4 billion.
Price increase in 2020: 160 percent.
Litecoin (LTC) is a cryptocurrency that competes with Bitcoin. It maintains its position among the top 15 cryptos in terms of market capitalization. Its supply will ultimately be restricted to 84 million LTCs, compared to 21 million for BTC. Currently, only 80% of LTC is in circulation, compared to 90% for Bitcoin. This coin, which is widely accepted by many agencies, has a faster mining pace (2min and 30 seconds per block).
Litecoin is a cryptocurrency worth keeping an eye on, if only because of the momentum it gained in 2020. Unlike Bitcoin, though, Litecoin is currently trading far below its all-time highs. Litecoin may profit from a relative catch-up impact as long as the trend stays substantially positive across all cryptos. Risks, on the other hand, may remain if cryptos are tense.
6. Cardano: A Top Ten Crypto Based On A Dual Blockchain
€35 billion in capitalization
Daily volumes: €1.5 to €4 billion by the end of 2021 (9 percent of capitalization)
Change in price in 2020: + 350
Cardano (ADA) is now ranked among the top five most valuable crypto currencies. Cardano is a blockchain platform with two blockchains, which sets it apart from its rivals. This enables safe and scalable data transmissions (ability to meet high demand).
Even though Cardano has not regained its late 2017/early 2018 heights, the momentum it has created remains intriguing, and trading volumes have hit new highs, indicating investor interest in 2021. The question will be if the business can achieve its goals.
Cardano is one of the virtual currencies that has benefited greatly from the cryptocurrency bubble that began in the autumn of 2020, which explains its outperformance against the crypto market.
7. Uniswap: The Rise Of The Little Cryptocurrency
€10 billion in capital
In 2021, daily volumes would range from 500 million to 1.4 billion euros.
UNISWAP is a relatively new crypto currency that has quickly climbed into the top ten of the world's virtual currencies. The aim of UNISWAP is to make crypto currency trading easier. UNISWAP is a decentralized financial system based on the Ethereum blockchain, making it a pioneer in the decentralized finance industry. Staking may therefore assist UNISWAP users by facilitating exchanges by providing liquidity.
UNISWAP has been on the list since September 2020, with the goal of rewarding previous users of the site, which debuted in 2018. The issuance of UNI tokens is scheduled to take place over the course of four years, with a total of one billion units being issued. Sixty percent of the capitalization has been issued thus far. The recent growth of UNI suggests that it has a brighter future than other virtual currencies.
What Is The Outlook For Crypto Currencies At The End Of 2022?
The era of all records for crypto currencies will be 2020 and early 2021 (until the collapse in May 2021). Despite the fact that pricing records aren't visible everywhere, the era will be remembered for the enormous inflow of money. A decrease in risk aversion, liquidity injections, and, most importantly, a desire for regulation and institutionalization have all contributed to this inflow. Although threats to liquidity and democratization persist, the underlying trend should stay robust until the end of 2021. The current speculative movement, which was sparked by this fundamental increase, should be one of the most significant threats to prices by the end of 2021.
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