Dogecoin (DOGE -1.10%) was one of the hottest cryptocurrencies in 2021, running up an amazing 4,000% in a year. What coin might pull off a similar feat in 2022? I'm not particularly bullish on the coin, Splintershards (SPS) but I am super-bullish on the game it represents, Splinterlands. I predict the non-fungible tokens (NFTs) in the game will be worth a lot more in a year or two than they are today.
Of course, nobody can predict short-term price moves. But it's always fun to try! So here's my explanation for Dogecoin's meteoric rise this year, and why -- if the stars are in alignment -- Splinterlands and its crypto might have a fantastic surge next year.
image source: Splinterlands
Why Dogecoin skyrocketed in 2021
Dogecoin was a joke coin created in 2013 by Jackson Palmer and Billy Markus. The value of the coin has run up 49,000% since then.
Dogecoin Price data by YCharts
One of the reasons that Dogecoin took off is that the richest man in the world, Elon Musk, owns the coin and tweets about it. It was a joke to Musk, too, but nonetheless the coin skyrocketed.
An overlooked reason for the coin's popularity is how easy it is for investors to acquire it. The stock brokerage Robinhood listed the meme currency in July 2018. So when Musk tweeted "Dogecoin rulz" a day after April Fool's Day in 2019, plenty of ordinary people were able to invest a little money in the coin.
Listing on a major exchange elevates a coin from obscurity
Very few crypto coins are listed on the major exchanges. For instance, Coinbase sells 140 cryptocurrencies, Gemini offers 95 coins, and Voyager Digital lists 72. Robinhood only sells seven. And yet there are more than 8,000 cryptocurrencies in existence, and more pop up every day.
How do you acquire crypto that's not traded on a major exchange? You swap other crypto for it. This means you have to own a digital wallet and link your wallet to a trading marketplace and transfer crypto back and forth. This complexity limits the demand for the vast majority of coins. One of the things that can cause a big run-up in the valuation of a crypto is when a tiny micro-cap with little liquidity begins trading on a major exchange.
Thus, if you want to own some crypto in the hope of seeing a huge 4,000% return in a year, the place to shop is not on Robinhood or Coinbase. Rather, you want to find a crypto that has a pretty strong chance of debuting on a major exchange in the future. That's one reason I'm bullish on Splinterlands.
image source: Splinterlands
It's the most popular game on the blockchain right now
Splinterlands has more than 300,000 daily users. According to DappRadar, that makes it the most popular game on any blockchain. This popularity has all come about from word of mouth, because the company doesn't advertise. The basic game is free, and about 7,000 new people check it out every day.
What's interesting is that out of those 7,000 daily visitors, about 3,000 of them opt to pay $10 for a fuller version of the game. That fee allows players to earn NFT assets in the game. So that $10 investment turns a free game (which is a lot of fun) into a money-making operation. When you play you win monster cards, and also two forms of crypto, Splintershards and Dark Energy Crystals.
I've been playing Splinterlands daily for a couple of years now, and my NFT assets and crypto winnings are worth about $14,000. Liquidity is limited and cashing out is rather tricky, of course, because the Splintershards token isn't sold on major exchanges. People acquire NFT assets through gameplay, or they trade crypto for it. And you can add cash to the game via PayPal, and buy crypto or the NFTs that way. But the real demand is for the playing cards, not the crypto.
image source: Splinterlands
I was early to the game, and so I'm really happy with my 140,000% return so far. But I think this game, which is largely still under the radar, has the potential to spike much higher in popularity and value.
For instance, Axie Infinity is a gaming crypto that jumped 30,000% in 2021, in part because in August Coinbase listed the token on its platform. Every day about $4 billion in NFT assets trade in the Axie marketplace, according to DappRadar. Splinterlands has three times as many players, and yet the daily transactions aren't up to even $1 million yet. So Splinterlands is still tiny. That's exciting, and I see a huge financial upside as interest and awareness continues to soar.
Invest $10 in Splinterlands
Despite its popularity, Splinterlands has a micro-cap valuation. I have yet to add any cash to the game. When you have 140,000% returns, you really don't need to. Nonetheless, you have to invest at least $10 if you want to become an NFT owner and a crypto winner. With such a low cost basis, I am confident that your percentage returns will dramatically outperform anything Dogecoin does in the future.
