What are the cryptocurrencies that have increased the most in value this year?
The economic upheaval in the wake of the covid-19 pandemic saw a large influx of new participants in the cryptocurrency markets pushing up valuations.
A new survey from the US cryptocurrency exchange Gemini, shows that nearly half of cryptocurrency holders were first-time participants in 2021. The digital coins saw major upswings last year, but most have since fallen from those peaks.
Bitcoin remains the dominate cryptocurrency with over $800 billion in market capitalization, but its market share has been eroded with a number of new entrants. Only one virtual currency, Terra's LUNA, has managed to gain ground since the start of the year hitting an all-time in April.
What are the biggest digital currencies?
The world of cryptocurrencies was launched in 2009, a year after an academic white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto, an invented name, laid out the system that would become the cryptocurrency Bitcoin. Since then thousands upon thousands of new digital coins have been minted. The total number has more than doubled from 2021 to 2022, albeit many of these have quite small followings and do very little trading.
The two biggest crypto coins are Bitcoin, with just over 40 percent of the market share and Ether at slightly less than 20 percent and over $400 billion in market capitalization. Avalanche, BNB, Cardano, Solana, Terra, Tether, USD Coin and XRP all have between one and four percent of the market while all the remaining virtual currencies make up around 20 percent.
Dismal start to 2022 for cryptocurrencies
The survey on cryptocurrencies conducted by Gemini, found that those dipping their feet into the market are not in it for the short haul. Almost 80 percent of respondents are doing so for the long-term investment potential. Especially in countries where the local fiat currency has devalued compared to the US dollar, people that do not yet own crypto were five times more likely to purchase it to hedge against inflation.
The first three months have seen most of the top competitors for punters loss value, only one of which has reached new highs compared to prior valuations. The market went from a valuation of over $3 trillion in November last year to just over $2 trillion currently, dipping below that level at times.
Much of the volatility and sliding value is due to uncertainty in the global economy from Russia’s invasion of Ukraine and the Federal Reserve moving to tackle rampant inflation with interest rate hikes. Also, regulators around the world are taking a closer look at the industry raising questions about how governments plant regulate crypto. President Joe Biden signed an executive order in early March outlining the responsible development of digital assets.
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