The cryptocurrency market in 2022 had it rough due to various factors, such as the Russia-Ukraine conflict, several security breaches, and unprecedented failures of prominent crypto firms, all of which may have deterred many investors from making long-term investments in digital currencies.
However, the decline in cryptocurrency prices presents an opportunity for investors to purchase high-quality cryptocurrencies at a lower cost. This article outlines the ten worst-performing cryptocurrencies in 2022.
Filecoin (FIL)
Filecoin is a decentralized cloud storage network. It serves as the foundation for apps such as Space Storage by Fleek, Estuary, and Chain Safe Storage. These Google Drive and Dropbox competitors hope to disrupt the cloud storage market by providing low-cost, blockchain-powered alternatives.
Despite this exciting utility, investors have rushed to sell Filecoin (FIL). One $FIL was worth $35.56 on January 1. However, it has since lost 88% of its value, falling to $4.16 per coin.
Analysts are baffled by why Filecoin has dropped so precipitously. It began to recover in late January but fell again at the beginning of April and never recovered.
In April, there was no major event that impacted the Filecoin network. As a result, it’s unclear why this coin has performed so poorly.
Axie Infinity (AXS)
Despite being one of the most popular blockchain games (with over a million players), Axie Infinity’s token value fell by 85% in the first seven months of 2022.
Once tipped for success as a popular Play-to-Earn (P2E) NFT game, the network was hacked in April 2022, when cybercriminals infiltrated the underlying blockchain and stole 174,000 ETH and $27.61 million worth of USDC for a total theft of over $600 million.
AXS was already going downhill because of a drop in daily players and problems caused by changes to the game’s infrastructure, but the hack worsened things.
At its peak, 1 AXS was worth $175.56 but now sells on exchanges for $7.39 as the value continues to fall.
Solana (SOL)
Several crypto analysts thought Solana would become a heavyweight, with a Proof-of-Stake model that could handle 3,000 transactions per second as a scalable crypto network.
SOL is currently ranked the 16th cryptocurrency on CoinMarketCap. It has lost more than 90% of its value, falling to $13.15 from a high of $276.05 in November last year.
The crash began in January 2022. Solana fell from $190.04 to $83.60 by mid-March, with a brief rebound to $145.28 at the beginning of April.
This changed in May, when a dApp called Candy Machine mistakenly listed a newly minted NFT for sale at a fixed price, inadvertently prompting bots to overwhelm the SOL network with millions of transactions and causing it to crash.
The Solana developers fixed the problem quickly and informed investors that the flaw had been fixed. However, they (i.e., investors) weren’t convinced.
Algorand (ALGO)
Algorand, launched in 2019, is an autonomous, decentralized, blockchain-based network that supports a variety of dApps. Because it is based on a permissionless, Pure Proof-of-Stake (PoS) blockchain protocol, it has been designed to reduce transaction fees and eliminate mining.
ALGO is now trading at $0.2193. It has a lifetime high of $3.28 and a lifetime low of $0.1024.
Curve DAO Token
Curve DAO Token, launched in January 2020, is a DEX for stablecoins that uses an AMM (i.e., automated market maker) to manage liquidity. The platform uses its native token for governance activities, such as rewarding users based on their liquidity commitment and ownership length.
CRV is currently trading at around $0.6324 per coin. It has a lifetime high of $60.50 and a lifetime low of $0.3316.
Avalanche (AVAX)
Avalanche was one of 2021’s biggest crypto successes. It is a Proof-of-Stake network that can handle millions of transactions per day and confirm transactions in less than 4 seconds. It gave investors a 3,171.06% profit last year. However, it has lost much of its previous value this year.
Each Avalanche coin was worth $113.10 in January 2022. Amid a crypto bear market, it lost $16.63 between January and March. It appeared to be stabilizing and recovering during this period.
However, the real decline just began. During the April-May crypto crash, Avalanche’s daily transactions dropped from nearly 900,000 to only 200,000. It was losing not only investors but also users.
This could have caused investors to lose faith in the network, as it coincided with a price drop from $96.47 to $26.43. It has since dropped further, all the way to $12.73. Over the year, Avalanche has lost 88.74% of its value.
Cronos (CRO)
Cronos is a utility token that can be purchased through the Crypto.com trading app. Crypto.com, debit card users, can earn Cronos. This is similar to a “cash-back” reward, except it is paid in cryptocurrency rather than cash.
Cronos was worth $0.59 per coin in January. However, as the cryptocurrency crash progressed, it dropped to $0.31 by the end of April. Then, on May 1, Crypto.com announced a significant reduction in Cronos rewards for the lowest-tier cardholders. Cronos dropped another 30% in the following week. Cronos has yet to recover, now worth only $0.06109 per coin. It has lost 89.65% of its value since January.
Arweave (AR)
Arweave, officially launched in June 2018, is a decentralized storage network that aims to provide a platform for indefinite data storage. It was first introduced as Archain in August 2017 but was later renamed Arweave in February 2018. AR is currently worth around $8.57. It has reached an all-time high of $90.94 (in November 2021) and a low of $0.4854 (in May 2020).
Polygon (MATIC)
Polygon was a pioneering Proof-of-Stake network when it launched in 2012. The network hosts Ethereum apps such as Sunflower Land, a Play-to-Win game.
Despite its large user base, Polygon has had a difficult year, losing 67.16% of its value from January to December, falling from a market value of $2.71 to $0.89. The decline in MATIC’s price can be attributed to market conditions, as no events have occurred to prompt such a sell-off.
MATIC is currently ranked as the 10th largest cryptocurrency, with a market cap of $7.8 billion, but it still has a long way to go before reaching its previous peak value.
Internet Computer (ICP)
The Internet Computer is a hybrid network that combines the characteristics of a centralized, private blockchain with those of a decentralized, public blockchain. It works similarly to a cloud computing network such as Microsoft Azure or AWS.
Over 70 different dApps are running on ICP, including InfinitySwap (a crypto exchange), OpenChat (a chat app), and ICMoji Origins (a play-to-earn game).
Despite all the progress made by developers on the network, it was not enough to keep ICP from becoming one of the worst-performing cryptocurrencies in 2022. It was worth $25.61 at the start of the year. However, it is now only worth $4.04. Its value has dropped by 84.22%.
According to Rohas Nagpal (an analyst who created the HyFi blockchain network), ICP investors have become victims of a “bad token distribution process.”
Three blockchain explorers discovered that project insiders moved $2 billion in coins to exchanges in June, presumably to sell them. This shocked the market and caused the value of ICP to crash, a situation it has not recovered from.
When Will the Cryptocurrency Markets Recover?
Markets operate in cycles, which are assumed to be four years in crypto. If forecasts are correct, cryptocurrency will recover in 2024, though there are no guarantees and other economic factors may influence the expected recovery.
How Can One Know That the Value of a Cryptocurrency is About to Fall?
The value of a cryptocurrency may crash for different reasons, including specific events, a loss of investor confidence, hacking breaches, or other security concerns. Traders closely monitor cryptocurrency for signs of a potential sell-off or other events that could cause prices to fall.
In Conclusion
- Based on current market trends and the overall performance of these cryptocurrencies in 2022, it is possible to conclude that the top 10 worst-performing cryptocurrencies of the year struggled to maintain their value and underperformed when compared to other cryptocurrencies in the market.
- This can be attributed to several factors, including changes in investor sentiment and security issues. Despite these difficulties, some of these cryptocurrencies may have future growth and development potential, and it will be interesting to see how they evolve in the coming months and years.
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