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Investment Solutions


Recapping 2021's Crypto Coins

Fresh Capital

Tuesday, December 21, 2021

Tuesday, December 21, 2021

It's been a crazy year for crypto. From Bitcoin to NFTs, gas fees, DAOs, dApps, altcoins, metamask¦ you name it 2021 was the year crypto entered the mainstream.

It's been a crazy year for crypto. From Bitcoin to NFTs, gas fees, DAOs, dApps, altcoins, metamask¦ you name it 2021 was the year crypto entered the mainstream.

With players like Coinbase going public, CBA offering crypto trading and NFTs making headlines, you'd have to be living off-grid (or be an RBA Governor) not to wise up to crypto potential this year.

We certainly did. And that why we're launching crypto early in 2022, becoming the first Australian share platform of its kind to do so. In our lead-up, we've been researching coins and following movements and figured we'd jot down a few of our major findings.

These were our favourite coins to read about, to despair over, to question, and to cheer on.

[note: All numbers here are expressed as Australian Dollar with cryptocurrency values at 10 December 2021].

Ripple (XRP)

Before we start with our power rankings, we thought we'd give special mention to Ripple (XRP), which made some splashes (or ripples even) but definitely not waves this year. This year saw a number of coins reach their all-time highs at the end of the year, but XRP bucked this trend, finishing well below its peak.

XRP is a cryptocurrency that enables financial institutions to transact and send money almost instantaneously and is used to do payment settlements, remittance and asset exchanges.

XRP had a large spike earlier this year. It started 2021 at around 30 cents a coin, peaking at about $2.40 per coin in April, and then finishing the year declining from that peak to about $1.20 per coin. This spike in the coin was due to some heavy speculation resulting from a lawsuit that Ripple's Executives were involved in with the court ultimately ruling in favour of Ripple.

XRP is likely to finish the year with 4x gain on its January 2021 value. That might not be much for NFT kids selling jpegs at 1000% profit, but a 400% return Still isn't shabby. Ripple may keep growing in 2022, but there's increased competition in the payments sector of cryptocurrencies that makes the look ahead for XRP decidedly cloudy.

With that said, we're taking you through our favourite coins to watch.

Cardano (ADA)

Cardano is a newer coin described by crypto enthusiasts as a third-generation coin that relies on proof-of-stake rather than proof-of-work. This makes Cardano more efficient and scalable than earlier coins as, at a very simple level, proof-of-stake coins tend to have lower fees.

By being cheaper and more efficient than its peers, Cardano is becoming a 'go to' choice for building decentralised applications (dApps) such as smart contracts. Cardano's use in dApps makes it attractive as a cryptocurrency because the coin has value and a rationale for future growth. And as more dApps are developed, that attraction (and valuation) is growing.

Cardano is on our list largely due to strong year. It started the year at around 22 cents and is positioned to finish at about $1.80 a 10x increase on the start price.

To put that into context: if you bought $1,000 worth of Cardano at the start of the year, it would be worth around $8,000 right now.

It's not the biggest return in the game a range of cryptocurrencies generated much higher returns, but Cardano is notable for its rising popularity, efficiency, and hefty potential.

Ethereum (ETH)

Ethereum made big moves due its role in the NFT ecosystem. Early in 2021, while some proclaimed a 'hot vax summer', crypto enthusiasts instead turned towards 'hot JPEG summer' as they bought CryptoPunks and NBA Tops Shots.

Ethereum is the backbone of the largest NFT marketplaces, like OpenSea and SuperRare. Ethereum is used for NFT transactions, as well as recording ownership securely on the Ethereum blockchain.

Over the past year, Ethereum price rose from about $950 per coin to just under $6,000 per coin in December this year. It's had some streaks along the way, dropping by more than 40% in May after Elon Musk tweeted that Tesla would no longer accept cryptocurrency, as well as a sell-off sparked by China announcing bans on financial institutions trading crypto. But the downturn didn't last long and Ethereum finished the year on an all-time high.

In 2022, Ethereum will move to become Ethereum 2.0, adopting a proof-of-stake protocol that enables Ethereum to compete with other assets such as Cardano.

Bitcoin (BTC)

As the OG cryptocurrency, Bitcoin is front-and-centre of every cryptocurrency discussion, news article, and EOY article ramblings.

In 2021 it ascended into mainstream popularity, with ETFs launching, major banks enabling trading, major FinTechs supporting it, and even Coinbase going public. Bitcoin has remained omnipresent as a cryptocurrency this year, even with the increase popularity of other coins.

Bitcoin started the year trading at close to $38,000 and is hovering around $68,000. It may even finish above $70,000 as we peak close to the holiday period. (Do Santa Rallies effect crypto?)

Bitcoin's market cap is currently $1.3 trillion, which put it in the same weight category as the likes of Amazon, Apple, and Alphabet. Its growth might not be sustainable in 2022 as it was propelled by the low interest rate environment and the US Government stimulus, but Bitcoin bulls think there's more to come in 2022. You won'tneed to follow Bitcoin story, you're going to hear about it anyway.

Dogecoin (DOGE)

The Dogecoin story is a page-turner because of its reputation as a meme coin. It represents all the good (and bad) things that come with the crypto community, but also shown surprising resilience and return.

Still, its price is highly volatile. At the start of the year Dogecoin was trading at about 1 cent, and is now sitting around 24 cents. Dogecoin spikes are explained meme-volatility or celebrity endorsements whether the latter is from Snoop Dogg, Elon Musk, or billionaire NBA team owner Mark Cuban.

It's difficult to predict how Dogecoin will grow in 2022 (read: impossible), its status as a meme coin and its incredible volatility means that its price doesn't follow rhyme or reason, that why it so enticing; it embodies the essence of cryptocurrency trading and investing.

Axie Infinity / Axie Infinity Shards (AXS)

One of our favourites to watch this year was Axie Infinity Shards, the in-game token and currency of the game, Axie Infinity. Axie Infinity is a Pokemon-esque game powered by NFTs where users can collect, breed, raise, battle and trade Axies', which are pet-like creatures (NFTs, of course) stored on a blockchain.

This year, the company behind Axie became a unicorn, valued at over $3 billion with over two million users. The power of Axie Infinity is its 'play-to-earn' structure, which enables players to earn items in the game, creating a giant digital economy based on Axie Infinity Shards.

Naturally, Axie Infinity Shares enjoyed rocket-ship growth in the 2021. At the start of the year, it was trading at 77c, and now to close out the year it has grown to an amazing $146 at the time of writing. If you invested $1000 in Axie Infinity Shards at the start of the year, you'd have close to $190,000 to close the year out.

This amazing growth has been propelled by a number of tailwinds, including the increased popularity of online gaming, NFTs, and even the growth of the digital economy. Investors in Axie Infinity believe that close to 25% of the users are 'unbanked' (meaning they don't have traditional bank accounts and rely on their cryptocurrency wallet as their bank), and 50% had never bought cryptocurrency before playing Axie Infinity.

It's been a crazy year for cryptocurrency. The low interest rate environment, rise in popularity of blockchain based gaming, NFTs and circulating Government stimulus has propelled cryptocurrencies to new heights and opened the floodgates for retail and institutional investors to enter the game. While this list shows some we enjoyed, you shouldn't overlook coins like Solana (SOL), Ecomi (OMI), and Verasity (VRA) that prospered in the background.

Looking to 2022, expect to see these coins and more falling into the crypto portfolios of investors. Hey, you might even be able to buy couple through Selfwealth.

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