Cryptocurrencies are becoming widely popular in the global scenario. The world is entirely in awe of how cryptocurrencies have opened new doors for millennials to budding investors. The market for this digital currency is increasing every passing day with magnanimous potential, and the time is near when the cryptocurrency will become the best and primary asset to trade.
While cryptocurrency is tuning into the market as a currency to make purchases, people still stick with it because of the long-term investments. However, the burgeoning rise of cryptocurrency does not diminish the fact that it is a very volatile asset, and mindful trading will only yield fruitful results.
What’s The Best Cryptocurrency?
The market is flooded with many trending cryptocurrencies, but the bottom line is figuring out the best cryptocurrency to invest in. Cryptocurrencies are virtual money with the issuance and operating rules that do not rely on any legal or government body. Programmed algorithms solely manage them, and for long-term investments, these are very simple yet profitable. However, the very famous and profitable cryptocurrencies which are existed for a long time are:
- Bitcoin (BTC)
- Ethereum (ETH)
- Binance Coin
- Cardano (ADA)
- XRP
- Solana
But before we dig deeper to understand the best cryptocurrencies, Let’s understand
The Benefits Of Long-Term Investments In Cryptocurrencies
Cryptocurrencies are not just other currencies to invest in; these are digital assets with benefits meant to be for the longer terms. However, the way it has evolved, these have become an alternative to fiat currency. And now used for almost everything. But the three head-turning benefits making the existence of cryptocurrencies even more concrete and excellent are :
1. Historical Facts:
Cryptocurrencies are very volatile by nature. Over its short spanned existence, these have seen many sharp peaks and crumbling downfalls. But over five years, the cryptocurrency market has appreciated a whopping 10,000%. However, the traditional investment platforms failed to show nothing near to the crypto rate of returns. Talking about the S&P 500 delivered a rate of return of 60% over five years, while the FTSE 100 settled with a mere 25%. With these scenarios, crypto can outperform the traditional market with some of the best cryptocurrencies.
2. Lower Fees
Another benefit for long-term investments in cryptocurrency is the lower trading fees. The fees are incurred with active trading, but no additional traditional fees get charged if the assets are invested for the long term. A potential long-term investor does not trade daily and has locked the assets for longer, not reducing profits through trading fees.
3. Lesser Risk
Any investment is associated with some level of risk. The risk increases when you rush in and move out of the market constantly while being present minimizes the risk of missing out because you are absorbing all the information. The trouble is lesser with the long-term investment because you are taking a fair part while in the market.
The Best Cryptocurrency Investments For Long Term Investments
1. Bitcoin (BTC)
If there is one best cryptocurrency to buy today, it has to be Bitcoin by its immense popularity. It is the largest cryptocurrency globally, created in 2009 by Satoshi Nakamoto, whose identity is still anonymous. Like all other cryptocurrencies, any central bank or the legal body does not govern it and is referred to as “private money.” Many businesses accept Bitcoin as payment, which makes it an intelligent investment. Tesla, in February 2021, announced that it had invested $1.5 billion in it, and the company accepted it as payment for its cars — and it might again if mining it becomes more environmentally friendly.
With so many pros, the cons are its fluctuations. The prices hit the top and then fall to the ground by thousands of dollars during any month. If insane price fluctuations make you nervous, you can gently avoid Bitcoin. But these price fluctuations should not be intimidating for long-term investments in mind.
2. Ethereum (ETH)
The ETHER world is so popular. It may be far behind Bitcoin in value, but it is far ahead of many other cryptocurrencies. Ethereum differs from Bitcoin or several other cryptocurrencies because, more than a cryptocurrency, it serves as a network for developers, allowing them to create their cryptocurrencies by using the Ethereum network. Ethereum has come very late to the market than some other cryptocurrencies, but it has very well made a place for itself because of its unique technology.
According to CoinMaretCap, Ethereum bore a very high transaction fee, reaching a peak of $71.72 on May 2021. It operates in Blockchain technology; it comes with only one lane for conducting transactions. So, when the load is higher, the transactions may take longer than usual.
3. Binance Coin (BNB)
Binance Coin is a unique cryptocurrency that is great for trading and paying fees on the Binance platform, one of the best crypto exchanges in the world. These coins were launched in 2017 and can serve the purpose of trading, payment processing, and even a good fit for booking travel. This cryptocurrency is an equally good catch for trading and can easily swap with other cryptocurrencies, such as ETH and BTC. With a very stable performance over the years, it is the best cryptocurrency to consider in 2022 for long-term investments.
Binance Coin is a cryptocurrency that came into the market by not a force of tech developers but by a company. Hence, there has been some rising skepticism about security issues that is normal to exist for something as sensitive as digital money.
4. Cardano (ADA)
This cryptocurrency is the best bet in today’s world, where adapting sustainable choices and leaving no or very few carbon footprints has become the goal. The Cardano network has a substantially smaller carbon footprint, making it highly appealing for investors looking for long-term investments. It consumes significantly little energy to finish a transaction compared to a more extensive network like bitcoin. Cardano cryptocurrency is committed to being more adaptable and secure in processing faster and cheaper transactions. Cardano also launched an update to last year called “hard fork” that spiked functionality, meaning it enables smart contract deployment.
Though Cardano leverages a better network, it still lags in competing with the top cryptocurrencies, like Bitcoin and Ethereum. Few adopters mean few developers that do not align with large investors keen to see a high adoption rate.
5. XRP
XRP is a cryptocurrency founded by the digital payment processing company Ripple. It is like a fair mix of crypto and Paypal, facilitating exchanges between different currency types such as crypto and traditional fiat currencies. Created by the giants in the crypto space, it grew up to 16,666% until last November. Ripple expects enormous investments in non-fungible token projects that use XRP Ledger, a public blockchain.
The Securities and Exchange Commission filed a lawsuit against Ripple and its executives violating registration provisions of the Securities Act of 1933 by raising over $1 billion through an unregistered digital asset.
6. Solana (SOL)
Ever since its inception, Solana has taken the crypto world by storm. In 2021, it soared from 0.1% of the market to settle at the top 10 spots, giving Ethereum tough competition. It is hybrid, using both proof-of-stake and proof-of-history mechanisms to process transactions securely and instantly added to its rising popularity. It leveraged decentralized finance uses, DApps, and smart contracts. According to CoinMarketCap, as of Jan. 2022, Solana ranks sixth in terms of market cap, which is currently estimated at $41.949 billion.
Solana has seen an unstoppable appreciation of around 4000% in the past year. However, there is a constant worry about its stability and how quickly prices drop as they spike.
7. Avalanche (AVAX)
It is the fastest smart chain contract in the blockchain industry. Avalanche has the edge over its competitor Ethereum to handle more significant transactions — up to 6,500 per second. It is an open, programmable platform for decentralized applications and is a new layer one blockchain, meaning it polished the base protocol for scalability of the system.
It is a relatively new cryptocurrency launched officially in 2020; hence, there is no path for comparison with such a brief history. But its price has fluctuated from a low of $6.49 to a high of $134.53 over the past year.
8. Dogecoin
Dogecoin is an open-sourced peer-to-peer digital currency created by software engineers Billy Markus and Jackson Palmer, who started a payment system as a “joke .“It stirred a wave thanks to the celebrities and billionaire Elon Musk. Built-in 2013, it vastly became a hit cryptocurrency with the help of a dedicated online community and creative viral memes. There are no limits on the number of Dogecoins created, unlike Bitcoin.
The currency is prone to devaluation with the increase in supply.
Final Take
There’s no question asked. Cryptocurrencies have a promising market and are here to stay. Like any other investment, it is vulnerable to see the highs and lows, but where is it not? If you aim for long-term cryptocurrency investments, familiarize yourself with blockchain and cryptocurrencies and research the market deeper.
Understand cryptocurrencies are not a get-rich-quick-scheme, it takes patience and a long-term investment strategy works best not to lose patience.