This year has had a rocky start for cryptocurrency investors. In November, many major cryptos hit new all-time highs, then suddenly fell by around 50%. Although altcoins are expected to surge this year, it’s essential to keep in mind that they may not replicate the massive gains of 2021. Due to the current economic climate, many investors are shying away from cryptos, which could take a long time to recover.
However, there remains strong potential and long-term gains for taking many promising altcoins. Here are just a few to watch.
1. Avalanche (AVAX)
In 2021, altcoins like Avalanche gained over 3,000%. Its fast processing speeds and low fees make it an attractive alternative to Ethereum.
According to DeFi Llama, 176 projects were running on Avalanche’s network at the time of writing, and it had a total value locked of $10 billion. It’s currently in fourth place.
2. Polygon (MATIC)
Instead of building a new blockchain, Polygon is an aggregation of layer 2s that make Ethereum faster and cheaper. Despite the upgrade to Ethereum’s network, which is expected to be completed in 2023, most developers still prefer to stay on the existing network instead of migrating to a new one. Some of Ethereum’s popular projects are already using Polygon.
Although Ethereum’s upgrade may not be completed in 2023, Ethereum’s founder Vitalik Buterin still holds that layer 2s will be useful in the future.
3. Enjin (ENJ)
Enjin is a platform that lets people create and sell NFTs — an industry that has seen rapid growth. It has a robust community, a reputation, and several proven use cases. Enjin is a project that focuses on non-fungible tokens, more commonly known as NFTs. They are digital certificates stored on the blockchain and used to purchase digital items.
The biggest threat to Enjin is the sustainability of NFTs. Although it had some surprising sales in 2021, it is still expected to see solid use cases once the hype dies down.
4. Cardano (ADA)
Due to its slow-and-steady development, Cardano has become a controversial project. Its supporters are disappointed with its approach to development, as it only released its smart contract functionality in September 2021.
So, what’s the bottom line? Looking for the next big altcoin is attractive but often a high-risk venture, as it’s prone to fraud and poor thought-out projects. While some altcoins may offer promising returns, many will fail. Instead of searching for coins that will surge in the short term, try investing in solid cryptocurrencies that will help you build wealth over time.
All cryptocurrencies are subject to risk, and it is wise to only invest in a few at a time. It avoids getting caught up in the inevitable technical issues and regulations that could affect the industry.