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The US inflation data has adversely affected cryptocurrencies and their investors
While Bitcoin and other top cryptocurrencies like Ethereum have finally breached their long-term resistances, but not before, diving into their extreme all-time lows. Earlier, BTC had surged above the US$22k resistance but then the crypto plummeted back to the US$19k range. As astonishing and dramatic as it may seem, analysts were quite prepared for this adversity. They claimed that in the current bearish market circumstances, a relief rally is much expected, but it does not signify any long-term proposition for the crypto market. There are several reasons why major cryptocurrencies are still plummeting and the recent release of the CPI inflation data is one of the major reasons behind it. Bitcoin, Ethereum, and other cryptocurrencies plummeted again after the report was released, indicating that investors are quickly dumping their investments. Here, we have listed the top cryptocurrencies that you can invest on in 2022 amid turbulent inflation winds.
Binance is the world’s largest cryptocurrency exchange that hosts a variety of trading functions. The firm burns its native BNB token every quarter through buybacks utilizing its operational profits and BNB reserves. As this burning continues, the value of its tokens is expected to significantly rise in the upcoming years. This makes it a perfect hedge against inflation.
Avalanche is a blockchain platform designed to support decentralized applications, which use self-executing smart contracts to offer services on the network. But the token is different from other cryptos due to its lightning transaction speed and its distinctive burning protocol. The platform is created to maximize investments through its burning protocol, which aims to boost the price of its native token, aiding its value in the long run.
XRP is a good investment during inflation because while mining the token, investors need to pay fees for every transaction. These charges are not sent to any central authority or even as a reward to validators. Instead, the developers burn them, making them a deflationary coin.
Polygon introduced its version of the Ethereum Hardfork, which makes its pricing more predictable, eventually making MATIC deflationary by burning coins. Its purpose is to avoid over-flooding the market with token circulation, eventually improving the overall value of the token.
Litecoin is quite similar to Bitcoin and hence would prove as a good investment during inflation. Its supply is designed to dip in the coming years, which will make its existing coins rise in value in the future.
EOS focuses on making blockchain operations more efficient and easier to handle. Its network uses a delegated proof-of-stake consensus mechanism, which deploys delegates for its governing protocol. EOS can also burn its tokens, given its community proposes to do so to curb inflation.
Adding Bitcoin to the list might be controversial since it is one of the most volatile cryptocurrencies in the market right now, but experts still believe that the crypto might successfully act as a hedge against inflation. The price of BTC did plummet after the release of the US inflation data by CPI, but quite shortly its value recovered and now it’s inching its way towards the US$22k resistance once again!
One can never fail to mention Ethereum after Bitcoin! Quite similar to BTC, the Ether price also faltered after the release of the inflation data, but quite shortly after, ETH also breached its previous resistance! Unlike other cryptocurrencies, Ether does not have a fixed supply cap. But it does have an inflation cap at 18 million new coins per year and a fixed inflation rate that issues 5 new coins for every block mined.
Algorand might prove to be a good investment asset amid bearish market conditions. The crypto has ranked as one of the biggest smart contract platforms in the world and is adopted by some of the most notable global institutions. It got a huge lift last year when El Salvador said it would establish its blockchain infrastructure using Algorand.
Decentraland is a virtual reality game on the Ethereum blockchain that uses the MANA token as an in-game currency. Users can purchase goods and services, buy land, visit other players, as well as create and monetize their own content using this cryptocurrency. Decentraland’s value grew intensely after the growing adoption of the metaverse.