Cryptocurrencies are virtual currencies or digital money. With over 20,000 cryptocurrencies in the market, investors’ interest is exploding. Yet, cherry-picking the right mix of cryptocurrencies is an uphill task. There are many factors involved. Further, the cryptos behave differently in the short term as compared to the long term. If you are interested in long-term investment in cryptocurrencies, this write-up is for you.
Here are the five best cryptocurrencies that have excellent investment potential.
1. Bitcoin (BTC)
Bitcoin is the world’s most well-known virtual currency developed in 2009. It is the biggest cryptocurrency by market capitalization ($455 billion). Because of its price and market cap, it is the market leader.
Bitcoin is used to make peer-to-peer online payments, with no central authority. You can use it to store, send, and receive a value on blockchain from anywhere in the world. Visa, PayPal, Microsoft, and many other businesses accept payment in bitcoins.
Investors consider BTC as the best buy and hold asset in their long-term investment portfolio. Despite volatility in its price, bitcoin has been the best-performing asset over the last decade or so.
2. Ethereum (ETH)
Ethereum is the second largest cryptocurrency by market capitalization ($210 billion). ETH entered the crypto market much later. But it has overtaken many other digital currencies because of its superior technology.
Ethereum’s success is based on its smart contracts. Smart contracts act like accounts on the Ethereum blockchain. They send transactions automatically when the defined rules are met. Ethereum provides a coding language for developers to create their own apps. This makes the blockchain popular in Decentralized Finance and NFTs.
Presently, ETH is undergoing an upgrade. Market analysts believe that this up-gradation will increase its market value. Thus, the investors are taking a keen interest in this digital currency.
3. Cardano (ADA)
Another best cryptocurrency to invest in for the long term is Cardano. It has a market cap of $17.348 billion. Cardano has a smaller footprint as compared to Bitcoin and Ethereum. But, it is cheaper, faster, and more energy efficient than BTC and ETH.
This cryptocurrency uses ADA tokens to send and receive digital money anywhere in the world, without a middleman. Users can mine ADA tokens to execute transactions digitally.
Cardano has recently launched the test version of AdaSwap. It is a platform where developers can make decentralized finance apps. This platform can raise Cardano’s status as a Web3 network and may push up its price.
4. Polkadot (DOT)
Polkadot is a new entrant in the crypto world. It was launched in 2020 and has a market capitalization of $7.746 billion. It is one of the best digital currencies to buy for the longer term.
Polkadot helps connect various independent blockchains into a single network. This facilitates users to transfer digital assets like apps and tokens across the blockchain. Users can freely interoperate with a wide variety of blockchains within the Polkadot network.
Its innovative technology and transactional security make it very popular among investors.
5. Chainlink (LINK)
This cryptocurrency came to the fore in 2014 and it has a market cap of $3.336 billion. It is the fifth best virtual currency to buy for a long-term investment. Chainlik intends to create the world’s first blockchain oracle network.
Chainlink has entered into a strategic partnership with Google. This allows Google to use Chainlink’s protocols to connect users to its cloud services.
Chainlink allows the usage of smart contracts to request data from any source, such as banks, NGOs, individuals, and companies. Users can then pay for this data in the LINK.
Picking the 5 best cryptos from a pool of thousands of digital assets is a demanding task. I’ve selected these 5 promising cryptocurrencies based on their historical performance, market capitalization, and expert opinion.
The experts warn against putting a huge amount into risky assets like cryptocurrencies. They recommend a lesser than 5% crypto investment in the total assets portfolio. The ultimate choice is yours. You must do your own detailed research before deciding about investment in cryptos.