Cryptocurrency is a form of digital money that is not controlled by a central authority, such as a government. It is instead based on blockchain technology, with bitcoin being the most commonly used. As the traction of digital money grows across Wall Street, more options become accessible. There are around 9,800 cryptocurrencies on the market right now.
While cryptocurrency can be used to make purchases, most people treat it to be a long-term investment. But, because cryptocurrency investment is risky due to its volatility, it’s crucial to understand what you’re getting into before investing. These are the top eight cryptocurrencies worth buying in in 2022.
Top 8 Cryptocurrency Investments in 2022
1. Bitcoin (BTC)
Bitcoin has the lengthy history of any cryptocurrency. With a price and market cap much larger than any other crypto investment option, it’s clear to see why it’s the leader.
Bitcoin is already recognized by a large number of businesses, making it a wise investment. Bitcoin is accepted by Visa, for example. Larger banks are also beginning to include bitcoin transactions in their services.
Also, Tesla stated in February 2021 that it had invested $1.5 billion in bitcoin, and the firm accepted bitcoin as payment for its cars for a time — and it may do so again if mining bitcoin becomes more environmentally friendly. According to CNBC, Blockstream and Block, formerly known as Square, are constructing a bitcoin mine in Texas that will be powered entirely by Tesla’s solar array and Megapack battery.
Investing in Bitcoin Comes With Risks
Bitcoin’s value is notoriously volatile. During any given month, the price could vary by thousands of dollars. If you’re worried about dramatic changes like these, you might want to stay away from bitcoin. Otherwise, these changes shouldn’t be too alarming as long as you remember that cryptocurrency could be a good long-term investment.
Another reason to think twice about investing in bitcoin is its high cost. Most people can’t afford to acquire full bitcoins because they cost almost $43,000 each. This is a downside for investors who wish to avoid buying a fraction of a bitcoin.
2. Ethereum (ETH)
Ethereum is a network that allows developers to use it to generate their own currency. While ethereum is far behind bitcoin in terms of value, it is also considerably ahead of its rivals.
Despite the fact that it was launched years after certain other cryptocurrencies, it has far outperformed its market position due to its unique technology. It is the most widely used blockchain and the second-largest cryptocurrency in the world, after bitcoin. Once an impending upgrade called “The Merge” is deployed later this year, it stands to gain even more ground. The upgrade will convert Ethereum to a proof-of-stake consensus, reducing the number of coins in circulation and making mining redundant. The Merge is also predicted to cut Ethereum’s energy consumption significantly.
Investing in Ethereum Comes With Risks
While the Ethereum network makes use of blockchain technology, transactions are limited to one “lane.” When the network is overloaded, this can cause transactions to take longer to process. The cost of transactions is also high. Due to increasing demand for block space, the “gas” price — the amount of ether required to complete a transaction on the Ethereum blockchain — increased 13 percent in March, according to CoinDesk.
The question of security has also arisen. In 2016, for example, a hack exploiting a security hole resulted in the loss of almost $50 million in ether. The Merge upgrade, on the other hand, is expected to make the blockchain more secure.
3. Binance Coin (BNB)
Binance coin took off at the start of 2021, rising from around $38 on January 1 to an all-time high of $683 in May, after years of relatively stable values, at least by cryptocurrency standards. The price is on the rise again after a steep decline.
Binance coin has shown to be one of the more stable investment options due to its success. According to CoinMarketCap, Binance is the largest cryptocurrency exchange in the world (U.S. residents must use the Binance.US version). Binance coin, despite its wide functionality and success in Binance sub-projects, is still a very risky investment.
Binance has paused deposits and withdrawals for various networks, including Polygon and Solana, while it completed updates, which investors should be aware of. However, the most recent one, which took place on April 8, had no effect on airdrops, which are rewards based on a percentage of users’ deposits.
Investing in Binance Coin Comes With Risks
The fact that Binance Coin was founded by a company rather than a bunch of software developers sets it distinct from its competitors. Despite the fact that Binance Coin’s commitment to maintaining a solid blockchain has won over many critics, some investors are still wary of the cryptocurrency’s possible security issues.
4. Cardano (ADA)
For several reasons, the Cardano network has a smaller footprint, which appeals to investors. On Cardano, completing a transaction takes less energy than on a larger network like Bitcoin. As a result, transactions are both speedier and less costly.
Last year, Cardano launched a “hard fork,” a software upgrade that adds new features, such as the ability to deploy smart contracts.
Cardano also claims to be more versatile and safe than other cryptocurrencies. To remain ahead of hackers, it constantly improves its growth.
Investing in Cardano Comes With Risks
Cardano may not be able to compete with larger cryptocurrencies even with a better network. Fewer developers means fewer adopters. Most investors want to see a high adoption rate, thus this isn’t tempting to them. The platform has ambitious aspirations, such as opening an incubator to help Africa reach its potential as a major economy, but it’s unclear whether it’ll be able to deliver on those claims.
5. Polygon (MATIC)
Polygon was created by a group of developers who greatly contributed to the Ethereum blockchain platform. According to CoinMarketCap, Polygon is intended for Ethereum scaling and infrastructure development. It expands Ethereum into a multi-chain system as a “layer two” solution, allowing for faster transaction and verification speeds.
Binance and Coinbase, two cryptocurrency exchanges, have backed Polygon. MATIC, the company’s token, is used for payment services, transaction fees, and settlement.
AMB Crypto announced on April 9 that Zo World, a distributed tourism startup, has launched its Founder non-fungible token and other digital assets on Polygon, which could improve MATIC pricing. Those who buy those assets also become owners of Zo Metaverse real estate.
More important, according to CoinTelegraph, an Indian state government is using Polygon to issue caste certificates to assist deliver government benefits to nearly 1 million low-income individuals.
Investing in Polygon Comes With Risks
Polygon said late last year that it has corrected a vulnerability that put nearly $20 million worth of its currencies at danger, according to CoinDesk. A hacker found the flaw and alerted Polygon, which issued a remedy within two days. Black-hat hackers, on the other hand, have already stolen over 800,000 tokens, leaving Polygon with a $1.4 million debt.
6. Terra (LUNA)
According to CoinMarketCap, the Terra network employs crypto to power global payment networks, which are coins pegged to fiat currencies like the US dollars, South Korean won, and the International Monetary Fund’s Special Drawing Rights currencies. LUNA, the network’s native coin, helps to stabilize the prices of the blockchain’s stablecoins and serves as a governance token that allows holders a say in Terra’s choices.
Since June 2021, LUNA has been steadily increasing, and it has more than doubled since February. Terra’s investment in assets like bitcoin and avalanche to hold in reserve as collateral for UST, a Terra stablecoin, is likely to be part of the reason for this. As a result, UST has seen a rise in demand and LUNA has seen less volatility than some other cryptocurrencies in recent months.
Investing in Terra Comes With Risks
Terra employs LUNA to keep the value of its stablecoins stable, placing it “at the heart of the shock absorption mechanism,” according to Matt Hougan, chief investment officer of Bitwise Asset Management. LUNA’s performance could suffer if Terra’s stablecoins fail to maintain their pegs to fiat currencies, according to Hougan.
7. Avalanche (AVAX)
Avalanche is a new “layer one” blockchain, according to Binance, which upgrades the base protocol to make the system more scalable. According to CoinMarketCap, it was founded as an Ethereum competitor by Ava Labs and Cornell University computer experts, one of them, former professor Emin Gün Sirer, is a cryptographic research veteran. Unlike Ethereum, where all nodes must approve each transaction, Avalanche’s three blockchains can approve transactions independently. This improves Avalanche’s scalability and ability to handle high transaction volumes – up to 6,500 per second. As a result, as according U.S. News, it’s becoming more popular among Ethereum projects.
In terms of the coin itself, according to Bloomberg, avalanche beat over ether as Terra’s reserve currency for its own UST stablecoin on April 7. As part of the initiative, the Luna Foundation Guard, a non-profit group that provides Terra, will purchase $100 million worth of material.
AVAX began trading in a 24-hour initial coin offering (ICO) in 2020. Its price has ranged from $9.34 to $146.22 in the last year. The coin is currently worth $84.09.
Investing in Avalanche Risks
In 2018, Sirer published a white paper explaining the cryptocurrency. It was launched in the year 2020. Because avalanche has such a young history, it lacks a track record to compare it to, making it a riskier investment for potential buyers.
8. Chainlink (LINK)
According to CoinMarketCap, Chainlink uses a decentralised oracle network to enable secure interactions between blockchains and external data feeds, events, and payment methods, with the developers expecting that smart contracts would become the main form of digital payment.
According to Benzinga, one thing working in Chainlink’s favour is a strategic relationship with Google, which employs Chainlink’s protocol to connect users to its cloud services. According to Securities.io, the project’s advisors include former Alphabet Chairman Eric Schmidt, DocuSign co-founder Tom Gonser, and former LinkedIn CEO Jeff Weiner.
Chainlink is also the best platform for Truflation, a decentralised finance business that is developing a new inflation index to replace the consumer price index. Unlike the CPI, which uses survey data to calculate inflation, Truflation’s index will employ price data in conjunction with the CPI’s calculating technique, according to CoinDesk. The Truflation index is intended to be more precise, transparent, and suppression of free speech than the CPI.
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Despite its proven use and widespread acceptance, chainlink has been subjected to the same level of volatility as other cryptocurrencies. Its cost decreased from $52 in May 2021 to just over $15 in April.
Final Take
Cryptocurrencies are here to stay, there’s no question about that. The question then becomes, where is the best place in the market to invest your money?
Here are some other things to consider as you decide which cryptocurrency is the best investment for you:
– The time it takes for a transaction to be completed.
– Transaction fees are the costs involved in completing a transaction.
– The ability to make regular purchases and bank transfers with your cryptocurrency
If you’re only ready to invest but not transacting on the network, keep in mind that cryptocurrency isn’t a get-rich-quick scheme. Instead, think of it as a long-term investment.
