Global economic uncertainties are weighing heavily on the cryptocurrency industry. In 2021, the market situation was different as cryptocurrencies were doing well. Bitcoin, for example, hit the $68,000 mark in November 2021. Ethereum also saw a positive rebound reaching an all-time high of $4,891 in November 2021. Back then, low interest rates and a Increased participation from retail/institutional investors have been among the major contributors to the growth of digital currencies.
The current market slump, however, is creating bearish momentum that seems unrecoverable. This slowdown raises the question of whether cryptocurrencies will hold up as the world tries to destabilize.
Performance outlook and future expectations
The ongoing market sell-off is not sparing virtual currencies, as the ecosystem continues to lose its overall market capitalization. Determining the future direction of cryptocurrencies will therefore begin with an assessment of the performance of major digital assets. Users can dig deeper into the progress of these assets with Coincodex, a platform that provides analytical crypto data.
Below is an overview of what the market can expect from the top performing cryptocurrencies. They understand:
As of this writing, Bitcoin is trading at $21,130 with a dominant market cap of $403 billion. This value follows a series of price corrections that began to gradually decline in March 2022. In June 2022, the asset declined further to a price of $18,000.
From a macro perspective, an increase in inflation rates has had a negative impact on the value of Bitcoin. The data shows that the consumer price index rose by 1%, pushing the level of inflation to 8.6%. Thus, an increase in the inflation rate will force investors to liquidate their BTC holdings.
As Bitcoin prices fall, some analysts believe the number one cryptocurrency is capable of weathering the economic turmoil. On the one hand, experts are optimistic that BTC could hit $100,000 while a few think it could fall below $10,000.
Ethereum is the second largest cryptocurrency with a market value of $1,212. The asset derives most of its value from various use cases that support decentralized application development. Ethereum’s price is also facing similar market movement as Bitcoin, despite being a major player in the DeFi world.
As mentioned earlier, ETH reached an all-time high of 4,891 in November 2021. According to its current prices, the value of Ethereum has declined by 75% since November 2021. Factors such as war, inflation and the COVID-19 pandemic directly affect the price of Ethereum.
Nevertheless, many industry experts hope that the second largest crypto will rise again, especially due to the introduction of consensus PoS. This ambitious initiative aims to improve the Ethereum transaction system by replacing mining procedures with a staking mechanism. This infrastructure change could help increase network transaction speeds and reduce trading fees.
Cardano ranks as the 8th largest digital asset in the market with a current price of $0.5025. The blockchain-driven network allows users to develop decentralized applications and smart contracts.
In 2021, Cardano started the year with a market capitalization of $5.5 billion and each ADA token was trading at $0.18. By the end of the year, ADA’s value had risen to $1.46 with a market capitalization of $49 billion. Despite its strong fundamentals, Cardano’s price is recording a downward trend attributed to various economic factors.
Nearly 70% of investors held their ADA coins through the network’s staking feature in May 2022. Today, the native asset (ADA) is down 80% since September 2021. Investors are hastily selling their coins digital to manage the effects of inflation.
Cardano’s future, however, is set to change as economic conditions become more favorable. In June 2022 alone, more than 1000 projects were establishing their infrastructures via the network’s blockchain. Additionally, 40% of these projects were NFT-based protocols. The analysts’ Cardano price prediction indicates that the growing popularity and adoption of Cardano could increase the current price of ADA by around 30% at the start of the third quarter of 2022.
Binance Coin (BNB)
Concluding the list, BNB is the fourth largest digital currency with a market capitalization of $38.5 billion. The asset primarily functions as a trading tool that settles exchange and listing fees on the Binance platform.
BNB’s downward trend in the market is evident as it has lost nearly 65% of its value since May 2021. The asset made headlines in 2021 after hitting an all-time high of $686. As of this writing, BNB is trading at $235 per token. Like any other digital asset today, BNB’s fall is tied to common contributors like inflation and unclear regulatory policies.
Even so, industry players expect the asset to trade at a minimum and maximum price of $354 and $413, respectively. On average, investors expect to trade the asset at $368 in 2022.
Applying BNB on the Binance Smart Chain could help drive the growth of the asset. Essentially, Binance Smart Chain provides developers with a platform where they can launch their DApps. The chain has a better edge over Ethereum as it addresses scalability issues and implements lower trading fees.
Pinpointing the exact direction of digital assets and their prices can be difficult.
However, one thing is certain; Cryptocurrencies are undoubtedly highly volatile assets prone to loss.
At the same time, various factors could energize the entire market and make the industry lucrative again. In this regard, the crypto space will eventually rebound as the global economic situation begins to improve.
Disclaimer: Cardano Feed is a decentralized news aggregator that allows journalists, influencers, editors, publishers, websites and community members to share news about the Cardano ecosystem. User should always do their own research and none of these articles is financial advice. The content is for informational purposes only and does not necessarily reflect our opinion.