June 12, 2024

Cryptocurrency: A brief 2021 roundup using 10 top assets and thoughts for going into 2022.

By Glyn Granville Gifford

Table for crypto coins that will be discussed and compared in the following article.

Coin Open Close Percent gain Rollback

BTC 28926 46208 59.75% 2nd Feb

ETH 736.30 3675.45 499.20% 7th May

BNB 37.35 511.47 1,370% 11th Apr

SOL 1.512 169.97 11,240% 7th Sept

ADA 0.1813 1.3078 721.3% 27th Feb

XRP 0.2196 0.8294 377.7% 4th Apr

DOT 7.232 26.678 368.9% 12th Feb

LUNA 0.655 85.45 13,046% 21st Dec

AVAX 3.195 109.39 3,424% 17th Nov

LINK 11.24 19.52 73.67% 14th Jan

*Open close data UTC 00.00am1st Jan to UTC midnight 31st Dec, Gate.io

*Rollback: The last date that an asset has returned to price parity as its original 2021all time high.

Well, it has been a fantastic year for crypto currency in general. As can be noted, all nine altcoins have outperformed bitcoin and thus in Satoshi values have thus gained too. Included in the list is Link which was a top 10 asset last year but has underperformed in relation to all the other listed altcoins and thus has dropped substantially out of the top 10 to rank 23. However, excluding stablecoins, USDT ranked 3, USDC ranked 7, BUSD ranked 15, UST ranked 21, Link is then ranked 19.

The obvious latecomers to the party are exceptionally Luna and Sol with 10,000% plus gains and notably AVAX with a large gain also. Will they keep on going through 2022 and gain more or are they now overheated? Many 2021 investors and those especially who invested in Q1 may be tempted to offload their hodl positions given the enormous gains in such a short space of time.

The battle between bitcoin and ethereum has been a fascinating one ending up the year with bitcoin dominance at 40.2% whilst ethereum standing at a market share of 20% of the entire crypto market (agreed it still includes stablecoins which are in the calculation of market cap thus the percentages are actually higher in terms of real market share of unpegged assets) . Thus ethereum has made substantial gains throughout 2021 and is catching up bitcoin rapidly. Can 2022 be the year that many traders have been calling ‘The BTC flippening’ whereby ethereum surpasses bitcoin in terms of market cap and takes the number 1 spot away from bitcoin? It’s too early to tell but at nearly half the market cap now to that of bitcoin there is a genuine possibility it can do so.

However, the coin to watch which is an immediate threat ranked number 3 and tough competitor to ethereum is BNB. Binance’s BNB running the Binance smart chain (BSC) network has gained huge traction in 2021 with numerous altcoins being transacted through it. As can be seen ETH has had a great year with a near 500% gain but with BNB at 1370% well one could say the proof is in the pudding. In my opinion, this gain difference is down to one simple and major factor, gas fees. As by example to withdraw any amount of USDT via the ethereum network (ETH/ERC20) right now on Gate.io is a fee of $66, whereas using Binance smart chain on Binance (BSC/BEP20) is a mere 80 cents (As of 1st January 2022. Of note ETH fees are updated hourly thus can go down and up accordingly. AFAIK BSC fees are fixed) Across the board with assets that have a choice of either network to ship coins the contrast in fee price is stark and always 10 fold or more using ethereum network (As from a general search of a few altcoins). They say that this problem will be resolved sometime with the update in ETH with the 2.0 version allegedly occurring now in June 2022 after many setback (Investopedia: ethereum-upgrade-delays-difficulty-bomb , accessed 1/1/2022. For a fuller discussion refer to this article. Not all is clear as to when the gas fee problem is resolved but with ETH 2.0 fully implemented it is argued that the energy consumption will be reduced by some 99.95% thus in turn should impact the price of fees for withdrawal of assets) It could the game changer for ethereum and have the ability to outperform BNB in terms of spot price gains, but there is also no guarantee of this. BNB has certainly gained from a strong starting position at the beginning of 2021 and may have another explosive year for 2022; time will tell.

XRP is still hanging in there and amazingly ended up the year 377% up. However, it is plagued with ongoing investigations by the SEC as to which is still hasn’t been fully resolved since it started in December 2020. Its history as a well-established coin has been a rocky road. Back in the original altcoin season in early 2018 it peaked to $4.16 yet in the corona crash of March 2020 a mere 10 cents. It even had a good rally up to $1.96 in April 2021 but has now more than halved from that year peak to end the year at 83 cents (Data points Gate.io. Weeks of 1/1/18 $4.161, 9/3/20 $0.10290, 12/4/21 $1.96582). There is still much debate as to where this coin is heading and if it will be mass adopted by banks for its use case as a transactional coin within banking systems worldwide. XRP has received much hype in the past but it has failed to deliver on its promises. In my opinion it is an asset to be avoided given the numerous other newer altcoins that appear much more promising; why invest in a coin with a chequered history?

Of the last 3 coins to mention, ADA, DOT and LINK have all outperformed bitcoin too at 721%, 369%, and 73.7% respectively. ADA is a very promising coin but has failed the given 2021 hype of being a $10 coin by years end. However, the gains are still nonetheless impressive and sitting at a comfortable price now of $1.30 it is poised to maybe fulfill that promise albeit a year later. DOT quite a bit behind ADA in gains terms is also doing great and has gained a lot of traction and interest through various projects one of them in particular being para-chain auctions. This again is a coin that may have a bright future through 2022.

Lastly LINK and has been included in the list even though it’s not a top coin anymore because this coin has received so much hype and promises of a $100 coin years end but as can be seen with a close price of $19.52 it is fivefold below the speculated target. What’s gone wrong with link I can only assume that there is so much new competition from the likes of ADA, SOL, LUNA and so on that the investor’s attention has been steered away into these other more potentially rewarding projects. Link had a cracking rally in 2020 and topped out at an all-time high of $20.16 in August of that year (Data point Gate.io. Week 10/8/20 $20.168) thus Link has failed to deliver being some 3% down after nearly 17 months. Again it also appears akin to the hype XRP used to receive and thus again why would you invest in this coin given the many other promising altcoin projects out there?

Finally to discuss ‘Rollback’. As can be seen from the table on page one, rollback dates have been given to highlight as to where an asset finished the year compared to when it first discovered its original all-time high for 2021. As can be seen Q1 is where the most profit was gained in general for 4 of the assets being BTC, ADA, DOT, and LINK. The year has seen bitcoin on a bit of a rollercoaster with a new all-time high in April of $64,814 and $69,000 dead in November (Data points Gate.io. Weeks of 12/421 $64,814.81, 8/11/21 $69,000) but in between these highs dips below 30K also followed by a final drag down to $46, 208 year end. By viewing roll back it can be seen that Link only essentially gained in price until 14th January thus has spent 50 weeks without gain for year-end price, quite a long time and arguably underperformed greatly in comparative terms with numerous other altcoins. DOT and ADA’s gained dried up in mid to late February after bitcoin hit first ever hit the 50K mark and thus since then a rough parity in Satoshi value has returned over the next three quarters to year end. At the end of the day bitcoin is king and has the power to drag altcoins up and down with sometimes drastic cuts on the way down with altcoins often suffering two or threefold losses compared to bitcoin in a given single days trade.

ETH, BNB, and XRP gained until Q2 and have finally reached a rough Satoshi parity since then to year end. They roughly coincided with BTC’s all-time high at its first peak of $64,814 for the year and thus bitcoin can be seen to have clearly aided in the impressive gains for these altcoins but especially BNB which by then had exploded in spot price ending the year up with a huge gain of 1370%; ETH not too shoddy either at 500% and XRP benefitting nicely from the bitcoin rally too.

Lastly the parabolic runs of SOL, LUNA, and AVAX to a good degree have seen their price action mainly in Q4 but with SOL slightly starting before towards the latter end of Q3. Yes certainly parabolic for SOL and LUNA with 10,000% plus gains and maybe more will follow but caution will certainly be needed as to buy in with these two altcoins as surely overheated.

In conclusion, yes it has been a great year for crypto with the market cap going from quite a chunk under $1 trillion to a fair bit over $2 trillion now. It is still an immature market given its at best only 12 years old and time will tell if this whole crypto idea takes off and truly becomes the next step in financial evolution with mass adoption by the larger powers in the financial world or does it just become another bubble? I don’t have the answer to this and I feel nobody can conclude one or the other right now as it’s far too early to tell. However, time to ride the gravy train, hop aboard and invest for the year to come; hop off if the warning signs indeed come to fruition. Just like the amazing year of 2021 in crypto 2022 can be equally so and will be interesting to see where we end up in 365 days from now.

But a word of caution given many uber-bullish predictions that often arise at the beginning of each year, for example ‘a 100k Bitcoin’ for 2021 years end and as we know it fell short of that target by a mile at $46,208 being more than twofold from the speculated target. Already as of 31st December the target for this year touted by many including Brock Pierce is 200K. To me, these nice round figures are a bit arbitrary and akin to pulling a happy impressive figure out of thin air. Often they fail, 2021 was supposed to be the year of a 100K bitcoin, a 10K ETH, a 100 dollar LINK, a 10 dollar ADA etc. but as seen none are anywhere near these arbitrary figured targets but one must still be happy with the gains made by all these 4 coins in general. My opinion, for what it’s worth, ignore the hype and huge predictions and be happy to gain a 100% on an asset in a single year because really where else can you make such terrific gains outside of the crypto world? Yes there are some out there but sitting in your armchair with a laptop and a crypto platform running it’s probably the easiest money one can make. Good luck to all in 2022.

Glyn Granville Gifford, 1st January 2022.