Source: The Conversation
Altcoin kicked off 2022 by overperforming over the long-standing cryptocurrency leader Bitcoin. The index also reveals that Altcoins have accumulated the most gains so far in the year and demonstrates a promising start for mid-cap coins.
Altcoins are alternative digital currencies ultimately comprising all other currencies in the crypto space other than Bitcoin. There are over 15,000 Altcoins currently in the industry today, created worldwide. Altcoins have consistently made themselves front-runners in the market, with the most popular ones being Ethereum, Ripple, Tether, Bitcoin Cash, Bitcoin SV, Lisk, Monacoin, and Litecoin. Although Altcoins have the same essential functions as Bitcoin, some Altcoins are created with more purposes.
There are currently many types of Altcoins known–stablecoins, meme coins, utility tokens, governance tokens, security tokens, and forks. Altcoins are also continually evolving, and the industry is yet to face many more changes in the future.
It can be noted that Bitcoin started underperforming since day one of January 2022. Until Arcane Research finally revealed in the early days of 2021 that Altcoins have officially superseded Bitcoins. In addition, many Altcoins have managed to beat Bitcoin in terms of overall gains throughout 2021. Exceeding expectations at the beginning of 2022, experts are predicting that this year will not be any different, projecting more success for Altcoins and a vast shift in the industry.
Arcane Research and other experts separate Altcoins into different indexes based on their market capitalization: large-cap index, mid-cap index, and small-cap index. The coins fall into the three divisions based on where their market cap stands and their gains as a whole. By January 4, 2022, Bitcoins had fallen by 3% off the chart, leading to considerable loss at the start of the year. Meanwhile, large-cap coins have risen by 3%, mid-cap coins have risen by 8%, and small-cap coins have risen by 4%.
Mid-cap Altcoins have performed the best so far. The success is heavily attributed to the unmatched performance of layer-1 tokens, including Cosmos.
On the other hand, Bitcoin’s underperformance shows that cryptocurrency’s dominance has not been as strong as it has in the past years. Bitcoin’s market share has also reached its lowest number in three years at 39.5%. Bitcoin’s value is currently somewhere around $46.2k after its 3% drip. With this, the cryptocurrency industry lost over 6% of its overall value.
Experts are yet to conclude whether Bitcoins could bounce back to their former glory, dominating the cryptocurrency landscape by storm. Many are also speculating that its underperformance at the beginning of 2022 signifies that Altcoins will still take the lead this year as they had in 2021.
Despite the prominence of Altcoins, experts are still reminding investors to be wary of where they put their money in. Bitcoin is still highly speculative, and Altcoins are considered even more speculative. Ethereum leads the Altcoin scene thanks to its smart contract capabilities. The rise of Non-Fungible Tokens (NFTs) have also contributed to its reputation and have grown its market cap to over $500 billion as of November 2021.