2 Top Cryptocurrencies to Watch Out for in 2022

Here’s why Ethereum and Kusama have the potential to deliver outsized returns to investors in 2022 and beyond.

| More on:
Businessman with his palm open containing a hologram saying 'Why Invest In Cryptocurrency?'

Image source: Getty Images.

The cryptocurrency market is valued at a market cap of almost US$2 trillion at the time of writing. However, investing in this asset class still carries significant risks, as it’s difficult to value them fundamentally.

It’s quite tricky to identify which digital assets will succeed in the long run, given there are over 17,000 cryptocurrencies in circulation. Despite these risks associated with cryptocurrencies, there are a few that enjoy certain competitive advantages, making them solid long-term bets.

Kusama

Valued at a market cap of US$1.4 billion, Kusama (CRYPTO:KSM) has returned a staggering 13,000% to investors since December 2019. Despite its astonishing gains, the KSM token is trading 73% below all-time highs, allowing you to buy the dip.

Kusama is a canary network of Polkadot. It is basically an earlier release of the code that holds economic value. Developers can use the Kusama network as a proving ground for on-chain governance, parachains, and runtime upgrades. It has a similar codebase to Polkadot and is one of the most popular interoperable blockchains in the world.

The projects deployed on the Kusama blockchain allow developers to gain access to a scalable and interoperable sharded network. In fact, Kusama is an ideal network for those looking to deploy their own blockchain, as developers can use it as a preparatory network before launching on Polkadot.

Its low entry barrier for deploying parachains as well as low bond requirements for validators makes Kusama attractive to early-stage start-ups and experimentation.

Last week, Tether announced it launched USDT tokens on Kusama. Now, USDT tokens will be used to power transactions on the Statemine parachain. A parachain is a blockchain network that runs in parallel with Polkadot. The Statemine is the first parachain on Kusama, and it aims to be the balance-keeper of a range of fungible and non-fungible tokens.

The launch of USDT on Kusama enables developers to introduce decentralized applications across networks and chains. Additionally, Statemine will ensure users benefit from lower fees while addressing problems related to the scalability, security, and interoperability of blockchains.

Ethereum

Valued at US$364 billion by market cap, Ethereum is the second-largest cryptocurrency in the world. The blockchain network, launched back in 2015, was the first to support dApps (decentralized applications) or decentralized applications which are self-executing contracts.

Now, the Ethereum blockchain accounts for 54% of the decentralized finance vertical with almost US$120 billion in total value locked. Ethereum also hosts OpenSea, which is the world’s largest NFT (non-fungible) marketplace with a 24-hour trading volume of US$75 million.

In March 2022, Ethereum miners generated US$1.29 billion in revenue, an increase of 7.2% compared to February and 1.08 times higher than Bitcoin. It was the first month of sequential revenue gains since November 2021, when Ethereum miners raked in US$2.07 billion in revenue.

While Ethereum enjoys a first-mover advantage, it is wrestling with lower transaction speeds compared to other blockchain networks such as Solana. Right now, Ethereum can process just 13 transactions per second. But the network is now shifting towards a proof-of-stake protocol, which should increase transaction speeds and lower costs significantly.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin, Ethereum, and Solana.

More on Investing

Canadian Dollars
Stock Market

Where to Invest $5,000 in April 2024

Do you have some extra cash to spare? Here are five companies to invest $5,000 in next month.

Read more »

Plane on runway, aircraft
Stocks for Beginners

Up 53% From its 52-Week Low, Is Cargojet Stock Still a Buy?

Cargojet (TSX:CJT) stock is up a whopping 53%, nearing closer to 52-week highs from 52-week lows, so what's next for…

Read more »

Question marks in a pile
Bank Stocks

Should You Buy Canadian Western Bank for its 4.8% Dividend Yield?

Down 35% from all-time highs, Canadian Western Bank offers a tasty dividend yield of 4.8%. Is the TSX bank stock…

Read more »

Gold bars
Metals and Mining Stocks

Why Alamos Gold Jumped 7% on Wednesday

Alamos (TSX:AGI) stock and Argonaut Gold (TSX:AR) surged after the companies announced a friendly acquisition for $325 million.

Read more »

tsx today
Stock Market

TSX Today: Why Record-Breaking Rally Could Extend on Thursday, March 28

The main TSX index closed above the 22,000 level for the first time yesterday and remains on track to post…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »