After the two major peaks of 2021, the cryptocurrency market experienced a major crisis that affected almost the entire market in 2022
While monetary or financial risks, particularly related to the war in Ukraine, inflation and interest rate rises around the world, have persisted throughout the year. Last year, the cryptocurrency market fell considerably. The crypto industry is said to have lost almost $3.9 billion in 2022.
As cryptocurrencies appear to be recovering in early 2024, it is important to know which cryptocurrency to focus on to take advantage of them. Therefore, in this article we give you an overview of the best cryptocurrencies of 2024.
Bitcoin: the reference cryptocurrency
Bitcoin (BTC), created by Satoshi Nakamoto, is not exactly a new cryptocurrency. BTC, as the main cryptocurrency, offers a good overview of the trends of all other cryptocurrencies. 2020 has been a record year for Bitcoin. Its capitalization multiplied by more than 2.5 over the course of the year. In 2021, Bitcoin grew more slowly, but still managed to gain almost 50%. Bitcoin's capitalization has also surpassed that of companies such as LVMH or Bank of America. But such performances generally herald brutal falls, since for example it lost almost 60% in 2022.
Bitcoin's rally was mainly explained by liquidity injections, by the fall resulting from financial stress, but also by the desire to institutionalize cryptocurrencies. We have thus noted the presence of strong vacillations on Bitcoin in 2021 with more recurrent bearish movements. The year 2022 confirmed the deceleration of the bullish performance with an acceleration of the decline of BTC, precipitated by the general market crisis.
Bitcoin started 2024 above $16,550 and is currently around $26,230. The trajectory of inflation and monetary policies will be key to Bitcoin's evolution in 2024 as investors may turn to riskier assets. We must also not forget the crisis in the banking and financial sector that could influence the value of the token. Technological developments around Bitcoin should also support network performance and attract more investors.
Ethereum: competition from Bitcoin and most used cryptocurrency
Ethereum (ETH) is the second cryptocurrency in terms of valuation. Therefore, it is not a new cryptocurrency either, but its dominance still makes it an essential cryptocurrency in 2024. In 2021, ETH had significantly outperformed Bitcoin (+270%), but the 2022 drop was not more significant as the token lost almost 70% last year. Since the beginning of 2024, ETH has gained over 50% so far and has risen from $1,200 to $1,800.
Despite last year's poor performance, Ethereum managed to implement "The Merge" upgrade in mid-September to move from proof-of-work to proof-of-stake, which turned out to be one of the few positive developments in the market in 2022. The merger reduced the number of ETH tokens available in circulation and made the Ethereum network 99.95% more energy efficient.
This is a big step forward as ETH is often considered the most widely used virtual currency. This is explained by the presence of many tokens that are based on the use of Ethereum. Therefore, the recent boom in the DeFi sector should support the crypto asset, especially if the banking crisis intensifies.
We can associate ETH with a stock index to the extent that the companies that would make it up would be the players in the crypto industry. This mechanism also explains the panic attack that hit ETH in 2022. Some Ethereum-pegged tokens, such as StETH, are one of the main explanations for the collapse of platforms like Celsius.
This year 2024 should be another year of major upgrades for Ethereum that could support the network such as the Shanghai (or Shapella) upgrade that will allow validators to unlock their reserved ETH to secure the network.
Binance Coin: the cryptocurrency that invites itself to the big leagues
Binance Coin, issued by the famous platform of the same name (Binance), now belongs to the very closed club of the 5 largest cryptocurrencies in the world. Binance is one of those giants that are taking advantage of the democratization of cryptocurrencies in individual savings.
Binance Coin (BNB) had gone from almost €5 billion in capitalization at the beginning of 2021 to more than €75 billion at the end of 2021, before falling to €42 billion in mid-2022 and rising to €49.81 billion towards the end of the year.
Since the beginning of 2024, the BNB token has gained 39%, from $246 to almost $339, but falling back to $216. Many promising projects on the BNB Chain blockchain are expected to support the Binance ecosystem and its cryptocurrency this year.
Although Binance remains exposed to structural risks amid the market crisis, investors appear to be sending the company a signal of confidence. In fact, Binance Coin is one of the few exchanges that continues to hire and shows its confidence in the future, mainly due to its historical and dominant position.
USDC and USDT: the maintenance of stablecoins
The year 2022 will have been the year of all turbulence for stablecoins. Despite this, USDT and USDC stablecoins rank third and sixth among global cryptocurrencies as of early 2024 and could attract investors who want to diversify their portfolios while (theoretically) investing in less risky crypto assets.
The crisis in the cryptocurrency market was mainly induced by parity problems of several stablecoins (Terra in the lead). In fact, it is necessary to differentiate stablecoins indexed (theoretically) in "real" dollars, from algorithmic stablecoins based on other cryptocurrencies and which also aim to guarantee parity. The Terra USD was in the latter category. In contrast, USDC and USDT are top-tier stablecoins. However, when it comes to USDC, the token is pegged to Circle, a platform that has experienced significant difficulties.
Finally, it is important to remember the appeal of cash during periods of market decline. “Cash” (dollars in particular), is one of the rare asset classes that has performed despite the crisis in the cryptocurrency market. In addition to the protective effect of stablecoins, it has an attractive effect in a context of inflation and liquidity crisis, especially for the dollar.
Solana: An Outlier Blockchain Using Proof of History for Faster Transaction Management
Solana, an open source blockchain, was launched in March 2020 with the goal of facilitating access to decentralized finance (DeFi) through fast and secure processing of transactions through the Proof of History protocol.
This method allows you to encode the timestamp of messages that pass through the network to obtain consensus on transactions once this step has been validated, without the need for coordination between network nodes. Therefore, anyone can quickly verify the validity of a transaction's timestamp, greatly improving the performance and speed of the blockchain.
So far in 2024, the SOL token has gained over 120%, from $11 to over $22. This is the best performance in 2024 in the Top 10 largest cryptocurrencies by market capitalization at the time of writing. The growth prospects for the network and token are attractive, especially thanks to the growing Solana ecosystem and the recent boom seen in DeFi.
Cardano: a crypto based on a double blockchain and well established in the Top 10 virtual currencies
Cardano (ADA) is among the 8 largest cryptocurrencies to date. It is a blockchain platform that differs from its competitors by the existence of a double chain of blocks that allows secure and scalable transfers (ability to meet high demand).
In 2021, Cardano price performed even better than in 2020 (+390% vs. +350%), allowing the virtual currency to surpass previous highs from 2018. But the correction was also brutal and Cardano has had a significantly underperforming major cryptocurrencies in 2022 with a drop of over 80% from $1,309 to $0.239.
In 2024, the ADA token has gained over 50% so far, rising to $0.3775 and then falling back to $0.268. Therefore, it is a relatively affordable token compared to other options in the cryptocurrency market. As a third-generation blockchain platform aimed at solving the scalability and interoperability issues that plagued previous generations of blockchains, Cardano could continue to enjoy growth this year.
Chainlink: the blockchain that allows linking data from the real world and the world of blockchains to develop Web3
Chainlink is a blockchain that was created to offer a decentralized network to connect two worlds: on-chain (hence, on the blockchain) and off-chain (hence, outside). Therefore, use cases related to smart contracts are interesting to make them increasingly relevant in our world today.
In March 2024, Chainlink announced the launch of its latest product, Chainlink Functions, which connects Web2 APIs to the world of Web3, making it easier to integrate real-world data into a blockchain. This functionality offers a wide variety of possibilities and use cases, as it allows you to connect Web3 projects (dApps or smart contracts) with Web2 systems such as Meta, Amazon Web Services or Google Cloud.
The LINK token, the 22nd largest cryptocurrency, has gained more than 30% since the beginning of 2024, rising from $5.56 to $7.5 (currently $6.36). By allowing developers to combine the best of Web3 smart contracts with the power of Web2 APIs, Chainlink will undoubtedly encourage the development of applications that combine the best of both worlds. Therefore, this should sustain the network and its token over time as blockchain adoption and project creation increases.
PAX GOLD: a cryptocurrency to protect your wallet
PAX GOLD is a particular cryptocurrency that allows you to reduce the risk in your portfolio. Issued by the company Paxos, the objective of the cryptocurrency is to very accurately reproduce the variations in the price of gold. PAXG tokens are therefore issued with corresponding reserves through the Paxos company.
One of the biggest benefits is that investors do not have to worry about the custody and protection of the actual gold, nor its transfer, as these services are provided by PAX. Additionally, it is possible to profit from gold through fractional investing, making these tokens more accessible to individual investors who want to invest in gold, but would not otherwise be able to profit from it.
The price of the token remains correlated with the price of gold, which stagnated during 2021 (after a +19% return in 2020) and remained relatively stable in 2022 (although very volatile, peaking at $2,070 and a low of $1,614), but has strengthened since early 2024. The PAX Gold token has gained more than 6% since early 2024 so far with gold recently briefly surpassing $2,000 and then returning to $1,900. Investors are increasingly interested in the PAX GOLD token, which is now ranked 69th worldwide.
This virtual currency could then be interesting in the coming months with respect to the gold movements to come, particularly in the midst of a crisis in the banking and financial sector with high inflation and an increasingly expensive cost of borrowing. Since PAX Gold is a hybrid asset that combines cryptoasset technology and gold, and bridges the gap between these two different investment opportunities, while offering the same degree of security and consistency as BTC, it should attract a growing number of investors. they want to diversify their portfolios.
Cryptocurrencies What prospects in 2024 with the banking crisis?
While the cryptocurrency market largely outperformed in 2020 and generally stagnated in 2021, the year 2022 was characterized by a bear market. However, although structural risks remain, the main projects in the ecosystem seem to be holding up and could be developed in 2024 with many new developments that could benefit the best cryptos of 2024.
Cryptocurrency prices rose in early 2024 with prices accelerating at the start of the mid-March banking crisis that began with the bankruptcy of SVB and concerns about the European and global banking sector intensifying with the fall of Credit Suisse. from certain banks in the United States.
If you are wondering what crypto to buy, keep in mind that some cryptocurrencies could take advantage of these uncertainties and attract those who want to develop their investments in alternative assets, as the traditional financial and banking system seems increasingly unstable. However, it is important to note that cryptocurrencies are extremely volatile and therefore very risky assets, which may not be suitable for all investors.
