What coins will sink or swim in the future?

The crypto market has seen some big dips, but some coins are thriving

It’s been a rough year for crypto investors. Bitcoin, Ethereum, and Solana recently dropped four, six, and seven percent respectively. Further, Bitcoin has lost around 60% of its total value since the start of 2022, dropping below $19,000.

It’s important to note, however, that the stock market writ large is also experiencing a general slump. Even though crypto is actually quite insulated from the difficulties facing Nasdaq and the Dow Jones–designed, as it was, to circumvent the loss of confidence in fiat currency after the 2008 recession–a general lack of investor and consumer activity has kept it quite volatile.

However, there are some interesting developments on the horizon, such as new government regulations and increased global adoption, that point to a lively future for crypto. In the meantime, the various coins have experienced a wide range of results over the past few months, giving investors insight into which coins might have the headstart as these sweeping changes begin to transform the market.

Coins to keep an eye on

While Bitcoin has experienced extreme volatility throughout its existence, especially in recent years, there’s reason to believe that it remains a safe crypto investment. For one, even taking the price drop into account, it’s still worth the most of any coin. Some have even predicted that it will reach staggering highs ($80,000 or more) in 2023. This is because of the increased popularity of halving, an event in which mining Bitcoin only yields half the rewards it normally would. Halving results in a shortage of newly minted coins, pushing the price of Bitcoin upwards.

By contrast, Binance Coin–the signature coin of major crypto exchange Binance–keeps a hard limit on the number of Binance coins out in the market, capped at 200 million, to help each individual coin retain its value better. The company spends around 20% of its profits every quarter to purchase and remove its own tokens, also helping them retain their value on the market. This strategy has prevented the coin from ever reaching the dizzying highs of Bitcoin, but has made it uniquely stable: the coin has consistently hovered near or above $270 per coin as of late.

Another coin to take note of is the Maker cryptocurrency, the native token of the Ethereum-based decentralized credit system called the Maker protocol. The Maker protocol also uses smart contracts to automate various functions associated with DAI, its stablecoin, such as lending and collateralization. As of late, the coin has been hovering around a price of $1,000, and has remained largely stable during these turbulent times.

Coins facing difficulties

While most cryptocurrencies have been facing a downturn, there are some that have been ailing a bit worse than others. For example, Elon Musk’s Dogecoin dropped 56% last spring, and does not appear to be showing signs of recovering. Dogecoin never had anything like the value of Bitcoin, capping out at $0.682, but recently it’s been hovering around $0.06. Commentators have pinned this low valuation on the fact that five billion Dogecoins are created each year, and the fact that the coin’s platform doesn’t support decentralized applications.

Coins associated with non-fungible tokens and the Metaverse have also taken a hit recently. Many of them—such as APE, which is tied to the Bored Ape Yacht Club NFT platform—are seeing double-digit losses. Though there is strong enthusiasm surrounding the Metaverse, it is still not clear exactly what role crypto will play in it. On a related note, the NFT market is currently taking a hit, causing many of its associated currencies to underperform as a result.

What’s next?

As always with crypto, it’s important to keep the bigger picture in mind. There are many encouraging signs of crypto’s global future: for instance, The United Nations Conference on Trade and Development has indicated that digital currencies may come to play a major role in allowing developing nations to easily establish modern digital payment systems. Of course, its volatility still poses some risks, but increased adoption might go some way towards stabilizing it.

El Salvador and the Central African Republic are two nations that have made headlines for allowing Bitcoin to be used as legal tender. Andorra, a small European nation, has also drafted legislation that would allow it to issue its own digital token, indicating a path that other similar countries might follow going forward. Moreover, as more countries adopt crypto, it is likely that we will see clearer regulations surrounding its use, which will draw in potential buyers who feel unsafe in the absence of regulation.

Based on narrowing trading ranges and previous trading volumes, there are signs that the crypto market’s volatility may be slowing down. As it stands, the market is relatively low, but at least there’s evidence that it might have found its floor at current prices. Despite the recent hits the market has taken, there is good reason to believe that many coins have a bright future. As recent difficulties in other sectors of the market reduce the public’s faith in fiat currency, it is likely that we will see increased interest in crypto going forward.

About Zain Jaffer

Zain Jaffer is a tech entrepreneur and the founder of Zain Ventures. He is an active investor and mentor, engaging with startups at an early stage in their journey.