Global demand for cryptocurrencies has steadily been increasing for the past decade, but in 2023, it looks like it’s slowing down. The trends and popularity have been reduced due to crypto scams, pump and dumps, and Ponzi schemes in the headlines in late 2022 and 2023. Crypto is a bad investment. This post is a cool educational post with a lot of interesting information, but I’ve edited the intro because I wasn’t the author and I don’t agree with changing the content I didn’t write. I paid for this post, it has great value in understanding the technology.
IMARC Group reports that in 2021, the global cryptocurrency market size was $1.78 trillion and is currently on track to reach $32.4 trillion by 2027. During this period a CAGR of 58.4% is expected. One of the most influential use cases driving this growth is none other than cryptocurrencies. With over 10,000 cryptocurrencies currently in circulation, deciding on which ones to invest in can be daunting and downright intimidating. Don’t fret though, because we’ve made it easy for you and compiled a list of the top three cryptocurrencies that you should buy in 2022. To help you make an informed decision, we’ll also provide insight into our methodology for choosing these cryptocurrencies.
Who Should Buy The Crypto On Our List?
If you ever invested in stocks you will know that the markets can be volatile, especially in the technology sector. Cryptocurrencies are derived from blockchain technology which is essentially no different than any other software.
As Kevin O’Leary explains to Yahoo Finance,
“If you invest in Microsoft and Google and Amazon, what is the core you’re investing in? It’s basically software.” He goes on to say, “Well, Bitcoin is not a coin, it’s actually software. The blockchain is software…”.
Understand that when you invest in cryptocurrencies, you are buying into the technology behind them and that volatility comes with the territory. Cryptocurrencies can be viewed as a technology stock and understanding this will help you navigate the crypto investing landscape. Be sure that you are risk-tolerant and that only a small portion of your portfolio is allocated to these assets.
Determine if you’re planning on trading or investing for the long term. The list here is compiled with long-term holders in mind, so if you’re thinking of actively going in and out of trades, this article won’t help you. If you are looking to buy and hold for decades to come, you’re in the right place.
Why Should I Invest In Cryptocurrencies?
Now that we’ve established that you’re in it for the long run, the question becomes: Why should I invest in cryptocurrencies? If the expected growth of the global cryptocurrency market is too abstract for you to conceptualize, simply take a look at what the big leagues are doing. We’ve all heard of El Salvador as being the first to establish Bitcoin as a legal tender. Ukraine just jumped on the bandwagon and countries like Panama, Cuba, and Paraguay are soon expected to do the same.
On the macro scale, it’s difficult to forecast what adoption rates we will see across different governments but we do know that some of the largest economies are at least considering regulations. Recently on March 9th2022, the Biden administration ordered federal agencies to develop a coordinated framework to regulate cryptocurrencies. The Bank of England also followed suit on March 24th by initiating Britain’s regulatory framework for crypto assets. Plenty of other governments have or are in process of establishing regulatory frameworks and it is only a matter of time before cryptocurrency oversight is clearly defined in every country. This is indicative of cryptocurrency acceptance as an alternate form of payment which is a good sign for the industry.
Large businesses and corporations are getting in on the action and this trend is growing. Visa just announced that in the first fiscal quarter of this year, there were $2.5 billion in customer payments made through the use of their crypto-linked cards. Mastercard is currently on a hiring spree to onboard 500 college graduates to expand their consulting services that focus on helping businesses understand cryptocurrencies. Tesla added another $1.5 million in Bitcoin to their portfolio back in mid-February and the list goes on and on. The big players are buying crypto – so should you invest? As with any technology stock, getting in early when there’s still room for growth is key to locking in the most gains.
Which Cryptocurrencies Should I Invest In?
Cryptocurrencies as a whole are just getting started so the growth potential is there but not necessarily for all of them. Cryptos like Shiba Inu or Dogecoin lack real-world utility which reserves them in the realm of ‘meme’ coins – coins that are made in a joking or humorous way that are typically lacking economic value beyond just hype. There are, of course, the blue chips on the other end of the spectrum such as Bitcoin and Ethereum. Should you invest in these? It goes without saying but let’s investigate why and also take a look at another top contender.
Bitcoin
As the undisputed king of all cryptocurrencies, Bitcoin is by far the most coveted cryptocurrency in the world. Since its inception in 2009, it is known as the original cryptocurrency and held its top position in market capitalization since then, and for good reason. Bitcoin is a digital currency that was created to facilitate fast and secure payments on the internet. It has evolved from being a simple payment currency, however. Over the years, its public perception as a store of value, coupled with its ever-increasing price has cemented it as digital gold. Buying and holding is the play these days and because of new, faster transacting, and improved cryptos flooding the markets, investors prefer to park their Bitcoin and let it grow.
- Ticker: BTC
- Market capitalization ranking: 1
- Market capitalization: $895 billion
- Current price: $47,133
- Total Supply: 21,000,000
- Circulating Supply: 18,998,775
Bitcoin’s limited supply creates scarcity and we’ve watched this play a role in its ascending price trend since its inception. Additionally, block mining rewards are cut in half at every Bitcoin halving event which occurs roughly every four years. The effort to mine a Bitcoin increases in parallel to the demand amid a decreasing production rate. The price of Bitcoin was $12 at the first halving in November 2012 and just a year later it increased to $1217. July 2016 marked the second halving and we saw the price explode from $647 to $19,800 by the following December. The latest halving occurred on May 11, 2020, and at the time the price was $8787. A year later, the price skyrocketed to $64,507 on April 14th, 2021.
Could we see another parabolic rally with Bitcoin at the next halving event in 2024? It’s probable but we would be speculating if we told you with any certainty. However, if we take a look at what the leading financial institutions are doing we can gain insight into what they have faith in. SEC filings show that BlackRock invested and held almost $400 million in Bitcoin mining companies at the end of Q2 2021. As of September 2021, Morgan Stanley increased their exposure to Bitcoin with over $300 million invested in Grayscale shares. These are small figures compared to Greyscale’s Bitcoin Trust which currently has an AUM of $30 billion.
We don’t need to speculate on Bitcoin because the world is embracing the coin and so should you.
Ethereum
If Bitcoin is digital gold, then Ethereum is digital silver. Just like the precious metal, Ethereum creates value not just from its scarcity but also from its utility. Smart contracts were popularized by the Ethereum blockchain which enabled decentralized applications (dApps) to be developed and used by the masses. These dApps are integral for the operation of decentralized finance (DeFi) protocols, which are transformative technologies that are disrupting traditional finance and global economic markets. Ethereum’s DeFi total value locked (TVL), which represents the total number of assets within these DeFi protocols, is currently over $121 billion at the time of this writing.
No other blockchain comes close to Ethereum when it comes to DeFi adoption. You’ve heard of the NFT boom recently driven by million-dollar digital art sales on the OpenSea marketplace, right? I’m sure you’ve read some headlines featuring Decentraland, The Sandbox, and Uniswap too. Guess which blockchain they were all built on? You guessed right, it’s none other than Ethereum.
- Ticker: ETH
- Market capitalization ranking: 2
- Market capitalization: $388 billion
- Current price: $3240
- Total Supply: Uncapped
- Circulating Supply: 120,194,049
It may surprise you that Bitcoin doesn’t even register on the DeFi radar but that’s because they were built for two entirely different purposes. Bitcoin was created for payments while Ethereum was built with smart contracts in mind. Silver is far more useful in the manufacturing of everyday electronics than gold, so when we speak of utility silver takes the cake. In the same sense, Ethereum has the most utility of any blockchain and this is why its native cryptocurrency Ether is always in second place.
Unlike Bitcoin, however, Ether doesn’t have a total supply. No, we won’t be seeing rising inflation affect its value as we see with the dollar and this is partially due to the recently launched EIP-1559 protocol. Its main purpose is to keep transaction fees, also known as gas, at a more reasonable rate while increasing speeds to provide a better overall user experience. A fee-burning mechanism was introduced in this protocol which has slowed down the production output of Ether. Since the protocol was introduced, over 2 million ETH was burned and this number continues to grow every day on every transaction.
Ethereum is currently transitioning into Ethereum 2.0, or Consensus Layer, and is on track to be fully upgraded this year. When this happens its current proof of work (PoW) consensus mechanism will be replaced with proof of stake (PoS). According to LuckyHas, as part of the upgrade, the issuance of new coins will, “stabilize at 1.71%, that is, the average daily output is about 5600. If by then the upgraded Ethereum can maintain the current burn volume, it can achieve 1% deflation every year.” The entire DeFi market is anticipating this welcomed change and excitement is mounting especially with those who have been accumulating Ether.
We don’t know if you’re excited about all of this but if you ask us, you definitely should be.
Cardano (edit, Cardano is not a top 3 in 2023, take a look where they are before considering)
When investing in a cryptocurrency, you’re essentially buying into the coin’s blockchain technology, its applicable use cases, and the positive impact it has on the world. Cardano was created with the big picture in mind: a world without intermediaries, in which people hold the power and have control over their daily interactions and transactions. Decentralized finance and self-governance in societies are some of the main objectives for Cardano and you can see what they’re doing to move towards this realization. Cardano founder Charles Hoskinson has chosen Africa to introduce its blockchain and native token ADA which is meant to be a more stable monetary alternative to the existing banking systems.
As Hoskinson stated in the 2021 Blockchain Africa Conference, “The first countries that hold national elections online that are credible, free, fair, and auditable are likely to be African nations. They will be the first countries to have an end-to-end digital identity and economy.” African countries have struggled historically with infrastructure issues, which caused financial services to be virtually inaccessible to the majority. Cardano’s commercial arm Emurgo invested $100 million to boost development in DeFi, NFTs, and blockchain education. The beneficiaries include regional startups and developed markets focused on Africa.
Coupled with the fact that there are currently over 1.3 billion people in the African continent along with it being home to some of the fastest-growing economies, the potential for a financial, technological, and infrastructure revolution is present. Cardano already partnered with World Mobile to roll out blockchain-powered internet connectivity throughout Tanzania. Ethiopia’s Ministry of Education partnered with the blockchain to create a blockchain-powered digital identity for five million teachers and students. SingularityNET and iCog Labs established a partnership with Cardano to support African technologists and scientists to advance AI and robotics by leveraging Cardano’s blockchain technology. There are plenty more Cardano-powered projects just like these in Africa and it looks like Cardano’s adoption across the continent is just getting started.
- Ticker: ADA
- Market capitalization ranking: 8
- Market capitalization: $36 billion
- Current price: $1.13
- Total Supply: 45,000,000,000
- Circulating Supply: 32,066,390,668
As Ethereum works to migrate its network into PoS, Cardano is already there. Cardano’s unique peer-review process relies on evidence-based research to ensure that all development on the blockchain is signed off by decentralized programmers and scientists in academia. Although meticulous and arguably better suited for future-proofing the blockchain, this has delayed the rollout of their smart contract capability which was only released in September 2021. Ethereum is enjoying the fruits of deploying smart contracts several years before all of the major blockchains and therefore dominates the DeFi market.
However, Cardano’s ecosystem is growing exponentially now that developers are launching applications. Currently, Cardano’s ecosystem boasts over 550, and this is expected to grow rapidly as users look for alternatives to Ethereum where entry into these protocols is burdened by high gas fees and network congestion. TVL is a measly $237 million at the time of this writing which pales in comparison to Ethereum’s $120 billion. Cardano is only just getting started, though and with its current price hovering around a dollar, it’s an attractive investment, especially for those with low initial capital.
Get In Before The Mainstream
Investing in these cryptocurrencies before the mainstream gets in on the action should be your game plan. The world is gravitating toward a cryptocurrency-infused economy whether you believe in the technology or not. The resilience of any cryptocurrency is measured by the technology behind the host blockchain, its applications, and its positive impact on society. Bitcoin will always be viewed as the de-facto crypto store of value so this should automatically be in your portfolio. Ethereum’s ecosystem is vast, especially in the DeFi space, and with its upcoming updates along with currently supporting sidechains, Ether is not only a smart choice but a necessary one. Cardano presents an early opportunity for investors as it is building itself to be the blockchain that establishes true decentralization across societies.
This post was written by Ironsung on Fiverr, I hire Fiverr writers to write about topics they are competent in. This way we all learn more. Subscribe for more investing posts. Have a lovely day.
Disclaimer
I want to make it unequivocally clear that I do not promote any cryptocurrency, nor do I endorse any crypto investments. This website is dedicated to providing information and insights into the world of cryptocurrencies to help you better understand what crypto is. If you ever find yourself in a position where you need to explain your decision not to invest in cryptocurrencies to friends or acquaintances, you can use the content on this site as a guide to discourage people from falling victim to scams or making hasty financial decisions. My ultimate goal is to empower individuals with knowledge and awareness so that fewer people become financial victims. Life is already challenging with its inherent obstacles; we don’t need the added burden of unscrupulous individuals looking to exploit our hard-earned money. Stay vigilant, stay informed, and make financial decisions with caution. Your financial well-being is of paramount importance, and it is my sincere hope that the information here can assist you in making prudent choices.
