This has easily been one of the worst years in the history of cryptocurrencies. A war in Europe, record-high inflation in the US, the collapse of Terra and FTX, massive job losses and plummeting prices — the digital asset market has been through a lot in 2022. However, the circumstances have not affected all coins in the same way. Sure, most cryptocurrencies are in the red, but some have dropped considerably while others have managed to buck the trend and close the year in the green. So, tag along as we list the best and worst-performing cryptos of 2022.

Top Performers:

Ethereum (ETH)

Ethereum’s price action in 2022 doesn’t inspire much confidence. At the time of writing, ETH was trading at $1,190. That’s more than 68 percent lower than its valuation from January 1 this year. However, one thing that puts ETH on the top performer’s list for this year is The Merge.

Ethereum’s shift to the proof-of-stake consensus mechanism was one of the biggest events in crypto history. It has set the stage for ETH to shoot for the moon in the coming months, especially with all the other updates planned on the network. Since The Merge was completed, staked ETH has doubled, going from 7.67 million ETH on September 15 to around 15.7 million ETH today.

Parallelly, staking yields have also seen a steady uptick. In mid-November, staking ether on Lido was paying out as much as 10.7 percent annualised returns. Other more elaborate staking platforms, such as the Interest Compounding Ether (icETH) offered by Index Coop, were offering returns as high as 25.5 percent. Therefore, it might not seem like it, but ETH is one of the better-performing coins of 2022.

Trust Wallet Token (TWT)

TWT is the native token of the Trust Wallet, a self-custody, mobile crypto wallet that supports dozens of popular cryptocurrencies. Trust Wallet also has a built-in DEX for Android users. TWT is Trust Wallet’s native token, and it offers several benefits and incentives to platform users.

TWT is perhaps the best-performing token YTD. At the time of writing, it was changing hands at $1.52, that’s nearly 110 percent higher than its valuation at the start of the year. TWT also hit its all-time high (ATH) of $2.65 on December 12 but began a downward spiral along with the rest of the crypto market after the Fed’s announcement to increase interest rates by 0.50 basis points.

The token’s rapid price appreciation began in November. When FTX collapsed, thousands of users lost access to their funds stuck in the platform’s non-custodial wallets. This created FUD around such crypto storage solutions, and people began shifting funds to self-custody storage solutions like Trust Wallet. This is one of the main reasons for TWT’s sudden and massive growth spike.

GMX

The downfall of FTX has caused traders and investors to lose confidence in centralised exchanges (CEXs). The key figures of such platforms, like Sam Bankman-Fried, have too much power and responsibilities placed in their hands, not to mention, the fate of all the user’s funds. Even the slightest misjudgment or financial error can lead to massive losses.

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As a result, decentralised exchanges (DEXs) have been growing in popularity ever since the FTX meltdown. GMX is one such decentralised trading platform. It allows users to trade cryptocurrencies on-chain, while also offering low swap fees and zero-price impact trades. The platform’s native cryptocurrency has enjoyed a steady uptick in 2022 and there are several reasons for this.

The first reason is the surge in users after the FTX meltdown. The second would be the token’s listing on FTX and Binance in October this year, which sent GMX rallying by 17 percent. And finally, GMX has seen a steady increase in the total value locked on the network. It has risen from a mere $100 million at the start of the year to $504 million on December 16.

USD Coin (USDC)

You’re probably wondering what a stablecoin like USDC is doing on this list. It is pegged to the value of the greenback and cannot increase in valuation. While that is true, USDC has gained significant ground in terms of market capitalisation. The token is also closing the gap to USDT, which is currently the top stablecoin in terms of market capitalisation.

At the start of the year, USDC had a market cap of around $42 billion. This rose significantly to $55 billion in June this year before going on a gradual decline. At the time of writing, USDC had a market cap of $44.5 billion. In comparison, Tether had a market cap of $78.35 billion at the start of the year. However, that has plummeted to $66.22 billion at the time of writing.

So, while the top stablecoin on the market has dipped since the start of the year, USDC has increased and is threatening to steal the number one stablecoin spot.

Worst cryptocurrencies of 2022

Crashed tokens

Of course, the biggest losers for this year would be the FTT, LUNA and UST tokens. After their respective platforms crashed and burned, these tokens lost most of their value. LUNA, now Luna Classic (LUNAC), fell from $82 on May 4 to $0.00003 on May 13. A 99.99 percent drop in less than 10 days.

It’s a similar story for UST, now TerraClassisUSD (USTC), which lost its $1 peg on May 5 and slipped to $0.017 a month later. Six months later, it was FTT’s turn to crash and burn. The native cryptocurrency of Sam Bankman-Fried’s now bankrupt exchange has tumbled from $25 on November 5 to $0.97 at the time of writing.

Solana (SOL)

SOL has lost close to 94 percent of its valuation since the start of the year. The token was trading at $172 on January 1, but the bear market, several network outages, and platform hacks, along with the Terra and FTX meltdowns have caused its price valuation to plummet.

For instance, after the collapse of Terra, SOL nosedived from $94.14 on May 5 to $43. 91 on May 12. Over the next few months, the crypto winter took its toll on SOL, which reached $36.02 on November 6. Then, thanks to the FTX fiasco, SOL lost half of its value over the next 4 days, reaching $13.86 by November 10.

One of the reasons for SOL’s sharp decline is the close relationship between FTX and Solana. FTX’s sister concern, Alameda Research, invested in over 10 Solana projects between December 2020 and March 2022. This relationship was a good thing when FTX was flying high but was the reason for its downfall when SBF’s empire burnt to the ground.

Metaverse tokens

Metaverse tokens such as Axie Infinity (AXS), Sandbox (SAND) and Decentraland (MANA) have suffered tremendously at the hands of the crypto winter. AXS and SAND are down nearly 93 percent for the year, while MANA has lost 90 percent of its value. Most of these losses came in the first half of 2022, with dwindling user interest, the Russia-Ukraine war, inflation worries, and poor earnings from Meta all taking a toll on these tokens.

Things look even uglier if you compare the ATHs of these tokens with their current valuations. For instance, AXS has an ATH of $165.37, but it is currently changing hands at $6.82. The ATH for SAND is $8.44, but it is currently trading at $0.455. And finally, MANA hit an ATH of $5.19 in Nov 2021, but it is currently trading at $0.31.

Fantom (FTM)

Fantom is a smart-contract layer 1 blockchain that was launched in December 2019 as an “Ethereum” killer. However, the project hasn’t been doing too well in 2022, registering a 92 percent drop since the start of the year. Like the aforementioned metaverse tokens, FTM also lost most of its value in H1 of 2022. The added kicker was the exit of the platform’s key personnel.

The platform’s CTO Andre Cronje and Senior Solutions Architect, Anton Nell announced their departure from the crypto space in March 2022, causing the token to drop 22 percent in a day. Add this to all of H1’s market noise and FTM had dropped from $2.3 on January 1 to $0.26 by May 12, after the Terra meltdown. Since then, FTM has been trading within the $0.3 to $0.2 range.

Conclusion

Historical data shows that crypto markets are cyclical in nature. Therefore, while most coins are currently deep in the red YTD, a turnaround could be on the cards in 2023. Till then, the current bear market offers an ideal opportunity to buy the dip and lower acquisition costs. However, cryptocurrencies are highly volatile. So, ensure you do your research and invest only as much as you can lose.

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First Published:Dec 20, 2022 1:46 PM IST