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Bitcoin and Ethereum are “core investments,” with BTC as the largest crypto, says Real Vision CEO.
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Terra and Solana currently sit among the top 10 cryptocurrencies by market capitalization, while Avalanche and Polygon rank in the top 15.
Terra (LUNA) is currently the ninth-largest cryptocurrency by market capitalization at $29 billion, a position driven by a dramatic price rally over the past year.
Although the native coin of this decentralized finance (DeFi) blockchain has faced volatility in the past two weeks, its price is up 23% since mid-December. More strikingly, LUNA has surged 10,579% since January 2020.
That token, along with Avalanche (AVAX), Solana (SOL), and Polygon (MATIC), is likely to see additional gains in 2022, according to Real Vision CEO Raoul Pal.
The investment strategist made these remarks in an interview published on Friday.
Pal said he has personally increased his Ethereum holdings and is monitoring “a number of tokens that have fallen” within decentralized finance and among layer-1 altcoins.
He was responding to a question from Jessica Walker about what an experienced trader might focus on in crypto markets entering 2022. Pal noted that Bitcoin (BTC) and Ethereum (ETH) will likely remain at the top of many traders’ lists, and he explained why.
In his view, ETH and BTC are “core investments.” He called Bitcoin the largest cryptocurrency and described Ethereum as the most powerful network in the crypto industry, citing its large community of developers and the broad investor base it attracts.
Beyond those two coins, Pal said investors will look to “network effects” when searching for investment opportunities. The most compelling assets, he added, are those whose networks demonstrate meaningful potential for growth within the crypto ecosystem.
As a result, he singled out layer-1 coins as likely candidates to outperform in 2022, while also including interoperability tokens on his watch list.
“We’re watching these layer-1s, several coins like Terra, Avalanche, and possibly Solana,” he said.
Solana is currently the seventh-largest cryptocurrency with a market cap of $44 billion, while Avalanche sits at 12th with a $21 billion market cap. Both coins were trading lower on the day, with SOL down 3.8% and AVAX down 4.3%.
Pal also cited Polygon and Quant—blockchain projects focused on connecting disparate chains, including Quant’s Overledger technology—as candidates for further growth.
The Real Vision CEO suggested this could be “the year of interoperability,” which is why Polygon and Quant could represent significant opportunities.
Last week, crypto strategist Michael van de Poppe expressed a bullish outlook for Polygon, adding that other tokens such as Fantom (FTM) and Enjin Coin (ENJ) could also perform well in the market.