Looking at some of the best performers to date, Fool.com contributor Chris MacDonald and The Motley Fool's Eric Bleeker discuss why Uniswap (UNI +4.32%), Chainlink (LINK +3.66%), and NEAR Protocol (NEAR +2.57%) have each outperformed Bitcoin (BTC +4.32%) and Ethereum (ETH +3.21%). This discussion took place on the Jan. 5 episode of "The Crypto Show" on Backstage Pass.
Eric Bleeker: With that, let's look at some recent price activity. In the past seven days, we have Bitcoin down 1%, Ethereum up 2.5%. We do have some notable standouts: Uniswap is up 11%, Chainlink which on the last show that we had before the holiday break, you had featured Chainlink as one of your favorite ideas for 2022, and NEAR Protocol up 21%.
Chris, at the beginning, you said, for the crypto world, this is pretty sleepy. I do think it's interesting to note at the beginning of 2022, we're seeing a similar equity environment to what we're seeing toward the tail end of 2021, which is a risk-off environment. A lot of days with the Dow are seeing marginal increases. Dow being a lot of blue-chip stocks across non-tech industries.
While the further you niche into smaller technology stocks, you get more and more losses. In this environment, in a way, I'm surprised how well crypto is holding if you're down 20% on a position that might sound like not a lot of comfort, but I think it's a relative positive how resilient it's been in the face of how much churn there is below the water and these risk-off stocks like software-as-a-service.
Chris MacDonald: Yeah, I think that's a really good way to think about it. When you think about the crypto market and you compare it to the stock market, what we're seeing with a lot of the meme stock plays and maybe the reopening rallies or even the pandemic plays that got driven up by the various closures that we saw because of the pandemic. Those are generally selling off and investors seem to be gravitating more toward quality.
What's interesting too in the crypto world, you're seeing certain meme tokens take a hit right now with the risk-off sentiment, Bitcoin and Ethereum, you see that they're relatively stable. Some investors obviously are doing very little with those, but maybe rotating out of some riskier ones and rotating into ones that they might see a little bit more value with in terms of growth.
Uniswap, Chainlink, NEAR Protocol, there are three interesting ones. They're very different, but each of them provide some serious upside. There are also smaller tokens with the ability to grow into the valuation that a lot of investors want to see.
It's a unique time where you've got some of the large-cap tokens that are basically holding steady. Some of the lower-quality or perceived lower-quality tokens taking a hit. Then some of the higher-quality, higher-growth ones starting to take off a little bit. It's going to be an interesting year, I think.
