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Are the Doge-days over?
Key points
- Dogecoin put meme coins on the map, but cryptos with utility are better bets in 2022.
- Algorand, Polygon, Cosmos, The Graph, Helium, and Enjin are all well-placed to overtake Dogecoin’s market cap.
Dogecoin (DOGE) was the sixth most searched-for news term in the U.S. this year, according to Google. The only other crypto to make it into the top 10 was Ethereum, which took 10th place.
Dogecoin’s popularity isn’t so surprising when you think of the rags-to-riches story behind the coin. What started as a joke coin designed to poke fun at the way people bought into cryptos they didn’t understand, grew to one of the top tokens by market cap. And, as popular culture stretches its tentacles into finance, Dogecoin personified (or dog-ified) the new trend.
There are various reasons people buy meme coins. Some want to get in on the joke or be part of a community. Others hope to get rich or see it as a way to access the seemingly impenetrable world of crypto. As Mark Cuban said back in April, buying 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 starting to find utility as a form of payment, but its move to the mainstream doesn’t sit well with its anti-establishment image. It is down over 75% from May’s all-time high. And even tweets from the self-proclaimed Dogefather Elon Musk have failed to reanimate the well-known Japanese dog.
Here are six cryptos that are likely to overtake DOGE in terms of market cap next year.
1. Algorand (ALGO)
Algorand is one of a number of promising smart contract cryptocurrencies being promoted as potential Ethereum (ETH) alternatives. Ethereum, the original programmable blockchain, is struggling with high fees and network congestion. As it works on an upgrade to Eth2, other cryptos like Solana (SOL) have made it into the top 10 coins by market cap. It isn’t yet clear which coins will come out on top.
One reason Alogrand is interesting is that it can be staked on several platforms, including Coinbase which only allows staking on a handful of coins. Staking is where you tie up your tokens to contribute to the overall security of the network.
2. Polygon (MATIC)
Polygon is an Ethereum layer 2 solutions aggregator. Where layer 1 cryptos like Algorand built their own more scalable blockchain ecosystems from scratch, layer 2s sit on top of existing networks to improve performance. Polygon pulls together various ways 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 — it is what will help them to talk to each other. There are a couple of interesting cryptos in this space, and Cosmos is one to watch. Currently positioned at 30th place in the crypto charts, its market cap is about $6 billion — compared to Dogecoin’s 12th place market cap of almost $23 billion.
4. The Graph (GRT)
Smart contracts are tiny pieces of self-executing code that run on the blockchain. They’re programmed to trigger when certain circumstances occur. But for them to execute automatically, they need good information. That’s where The Graph comes in. It is basically a data indexing tool that helps decentralized applications — and the smart contracts that power them — to access the data they need. It performed relatively well in 2020 but sits below Dogecoin in terms of market cap and still has space to grow.
5. Helium (HNT)
Helium brings a decentralized approach to wireless infrastructure. A network of individual users provides wireless access for Internet of Things devices. The Internet of Things are all the devices — from modern fridges to smart collars for pets — that connect to the internet. Users can earn HNT tokens and contribute to the network by operating the hotspots that make up the network.
6. Enjin (ENJ)
Gaming and metaverse tokens are hot right now, as is anything related to non-fungible tokens (NFTs). NFTs are certificates attached to various types of digital collectibles, such as art, music, and in-game items.
But it can be hard to know which game, virtual world, or piece of NFT art might capture people’s imaginations, especially if you’re not an active gamer or collector. Rather than trying to hunt out the next big thing, it’s worth looking into the infrastructure behind these projects. For example, Enjin is a gaming focused NFT platform that simplifies the process of creating and managing NFTs.
The cryptocurrency world is unpredictable
Each of the tokens above have a solid management team, are available from top cryptocurrency exchanges, and solve a problem that needs to be addressed. But they still carry risks — such as increased regulation, potential security breaches, or being superseded by newer technology.
Make sure you do your own research to understand each coin. Look at how it compares to its competitors, what its long-term prospects are, and whether it has an active community of developers.
If you clicked on this article hoping to discover the next big meme coin, I hope you’re not feeling too disappointed. We’ve focused on coins that have potential and a solid use case, which rules out most meme coins. That doesn’t mean one or two of the hundreds of different meme coins on the market won’t jump in 2022. It’s just that they are even more unpredictable than other cryptos and only a few have any chance of succeeding.
Ultimately, we don’t know what will happen to the cryptocurrency market next year. But tokens that serve a purpose are much more likely to perform well in the long term than those that don’t.
Emma Newbery owns Algorand, Ethereum, Solana, Polygon, Cosmos, The Graph, Helium and Enjin. The Motley Fool owns shares of and recommends Bitcoin.
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