3 Top Cryptos That Could Outperform Despite Risk-Free Volatility
Overall, digital currencies had a great year in 2021. Collectively, this asset class started the year with just over $800 billion in aggregate market capitalization (cap). That figure nearly tripled by the time 2022 rolled around and had reached $2.25 trillion by the end of the year. Much of these gains came from the major crypto sectors, which led the way in terms of increasing valuation.
However, the recent sector-wide decline we have seen has sent investors into a spiral. Most tokens are down, due to a large-scale portfolio risk reduction led by the riskiest investments first. This type of volatility has manifested itself daily in the crypto sector. Often, the crypto sector has seen much larger daily moves than the broader stock market.
Of course, if the bullish sentiment returns soon, there might be a chance for a nice bounce for crypto investors. In this market, anything is possible.
However, with risk sentiment prevailing, investors may be interested in tokens worth buying at these depressed levels as long-term bets. Here are three cryptos that I believe fit that profile, especially in this uncertain environment:
|BNB-USD||Binance USD Coin||$319.98|
Top Cryptos to Buy: Solana (SOL-USD)
Solana (SOL-USD) is a decentralized computing platform that aims to improve blockchain scalability using a combination of this network’s unique proof-of-history and proof-of-stake consensus mechanisms. The technical aspects of the Solana blockchain are difficult to understand. However, the bottom line is that this unique configuration gives Solana the ability to process up to 50,000 transactions per second. It’s up there with the best credit card processors.
Arguably the fastest blockchain in terms of finality time, Solana has reaped the benefits of its technological advantage. Developer interest in this network has skyrocketed, with a number of promising projects recently released that should propel future growth even higher. Among the projects I have on my radar right now are Solana Pay and the network’s non-fungible token (NFT) marketplace, Solanart.
Like other top cryptos, Solana is down from its peak. However, I believe this token has the ability to outperform if growth continues on the Solana network. Various outages have undermined the bullish thesis on this token lately. However, if Solana fixes the kinks, it’s a project with immense long-term trade at a compelling valuation today.
Ethereum (ETH-USD) is a cryptocurrency that really needs no introduction. Ethereum provides the building blocks upon which much of the decentralized finance world is built. For those who are optimistic about the long-term growth of crypto in general, Ethereum is an integral part of this thesis.
However, there is yet another catalyst investors are looking for for even greater long-term growth. The next highly anticipated Ethereum “merger” is just around the corner. This merger will combine the network’s proof-of-stake Beacon chain with its mainnet, providing a true proof-of-stake option for investors.
This will significantly reduce the energy impact of Ethereum mining and improve network speed. While costs won’t necessarily go down (always a headwind for Ethereum), this merger will likely improve the tokenomics of Ether, the network currency.
It is expected that this merger could take place in August, providing a short-term catalyst for investors. On the contrary, ETH deserves to be on the watchlist of investors considering the best cryptos right now.
Top Cryptos to Buy: Binance Coin (BNB-USD)
Binance Coin (BNB-USD) is currently the fifth largest crypto by market capitalization. With a market capitalization of around $52 billion, Binance Coin remains one of the top cryptos that most investors may not have dipped into to any great extent. At least, compared to Bitcoin (BTC-USD) and Etheruem, which are currently the top two in this regard.
BNB offers investors a great way to bet on the world’s largest crypto exchange, Binance. For those who are optimistic about growth in trading volume and the health of the forex market as a whole, this is a key reason to own BNB.
However, perhaps one of the most intriguing use cases Binance Coin has seen recently is the use of this token in the gambling industry. A number of top crypto gambling sites and casinos offer Binance Coin. As this sector continues to grow, there is a truly unique angle to consider when it comes to this token.
The game is not for everyone and these three tokens each have their issues. However, in the long term, these three cryptos could outperform despite short-term volatility.
As of publication, Chris MacDonald holds positions at Solana and Ethereum. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.