Are the Doji days over?
the main points
- Dogecoin put meme coins on the map, but interest-bearing cryptocurrency is a better bet in 2022.
- Algorand, Polygon, Cosmos, The Graph, Helium and Enjin are all well positioned to surpass Dogecoin’s market cap.
Dogecoin (DOGE) ranked sixth among the most searched for news terms in the US this year, according to Google. The only other cryptocurrency to reach the top ten was Ethereum, which took 10th place.
Dogecoin’s popularity isn’t too surprising when you consider the poverty-to-riches story behind the coin. What started as a joke coin designed to make fun of the way people bought into cryptocurrencies they didn’t understand has grown into one of the best coins by market cap. And with pop culture extending its claws into finance, Dogecoin (or dog) personified the new trend.
There are many reasons why people buy meme coins. Some want to participate in the joke or be part of the community. Others hope to get rich or see it as a way to gain access to the seemingly impenetrable world of crypto. As Mark Cuban said in April, buying a Doge is better than a lottery ticket and can be a great way to learn about the market.
But, Dogecoin’s star may be waning. Dogecoin is beginning to find interest as a form of payment, but its transition into the mainstream does not align well with its anti-establishment image. It’s more than 75% down from its May high. Even tweets from self-proclaimed godfather Elon Musk failed to revive the famous Japanese dog.
Here are six cryptocurrencies that will likely overtake DOGE in terms of market capitalization in the coming year.
1. Algorand (something)
Algorand is one of a number of promising smart contract cryptocurrencies being promoted as potential alternatives to Ethereum (ETH). Ethereum, the original programmable blockchain, is struggling with rising fees and network congestion. As it upgrades to Eth2, other cryptocurrencies like Solana (SOL) have made it into the top 10 by market cap. It is not yet clear which currencies will appear in the foreground.
One of the reasons why Alogrand is so interesting is that it can be placed on many platforms, including Coinbase which only allows storing on a handful of coins. Staking is where you bind your tokens to contribute to the overall security of the network.
2. Polygon (Matic)
Polygon is an aggregator of Ethereum layer 2 solutions. Where Layer 1 cryptographers like Algorand have built their own blockchain ecosystems from scratch, Layer 2 is layering on top of existing networks to improve performance. Polygon combines various methods to make Ethereum faster and cheaper – giving developers the option to choose the right solution for their project.
3. Cosmos (ATOM)
Cosmos calls itself the “Internet of Blockchains.” It is a smart contract platform that focuses on interoperability. Interoperability is one of the next big challenges for cryptocurrencies – which is what will help them talk to each other. There are a couple of interesting cryptocurrencies in this space, and Cosmos is one to watch. It currently ranks number 30 on the cryptocurrency charts, with a market capitalization of around $6 billion – compared to Dogecoin’s twelfth market cap of nearly $23 billion.
4. Graph (GRT)
Smart contracts are small pieces of self-executing code that run on the blockchain. It is programmed to turn on when certain conditions occur. But for it to be done automatically, they need good information. This is where The Graph comes in. It’s essentially a data indexing tool that helps decentralized applications — and the smart contracts that power them — to access the data they need. It has done relatively well in 2020 but falls below Dogecoin in terms of market capitalization and still has room for growth.
5. Helium (HNT)
Helium brings a decentralized approach to wireless infrastructure. A network of individual users provides wireless access to IoT devices. The Internet of Things is all the devices – from modern refrigerators to smart pet collars – that connect to the Internet. Users can earn HNT tokens and contribute to the network by running the hotspots that make up the network.
6. Enjin (ENJ)
Game tokens and metaverses are hot right now, as is anything to do with non-fungible tokens (NFTs). NFTs are certificates associated with various types of digital collectibles, such as art, music, and in-game items.
But it can be hard to figure out which game, virtual world, or piece of NFT art might capture people’s imagination, especially if you’re not an active player or collector. Instead of trying to find the next big thing, it’s worth looking into the infrastructure behind these projects. For example, Enjin is a gaming-centric NFT platform that simplifies the process of creating and managing NFTs.
The world of cryptocurrency is unpredictable
Each of the above tokens has a strong management team, available from top cryptocurrency exchanges, and solves an issue that needs to be addressed. But it still carries risks — such as increased regulation, potential security breaches, or being replaced by the latest technology.
Make sure you do your research to understand each coin. See how it compares to its competitors, what its long-term prospects are, and whether it has an active community of developers.
If you click through this article in hopes of spotting the next big meme coin, I hope you won’t be too disappointed. We’ve focused on coins that have a potential and powerful use case, which excludes most meme coins. This does not mean that one or two of the hundreds of different meme coins on the market will not make a jump in 2022. It is just that they are more unpredictable than other cryptocurrencies and only a few of them have any chance of success.
Ultimately, we don’t know what will happen to the cryptocurrency market next year. But tokens that serve a purpose are more likely to work well in the long run than those that don’t.
Emma Newbery It owns Algorand, Ethereum, Solana, Polygon, Cosmos, The Graph, Helium, and Enjin. Motley Fool owns and recommends shares in Bitcoin.
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