Best Cryptocurrency Investments in 2023
Cryptocurrencies have proven to be a good long-term investment. Over the years they’ve had their ups and downs in terms of value. However, crypto is now more widely accepted than ever before and more regulated as well. There are a few currencies that have remained on the top of the investment charts, and a few new ones that are propping up recently.
In this article, we’ll explore what trending crypto to buy now, and how to hedge your investments by buying different currencies aimed at a variety of different users.
Bitcoin
Bitcoin has been around the longest of all cryptocurrencies and it’s the most valuable and most reliable one to invest in. There are still risks involved and Bitcoin has proven that it was volatile, but it’s also the most widely accepted cryptocurrency.
One of the biggest boosts for Bitcoin came in 2022 when large banks started issuing loans based on the value of Bitcoin. This made it more like any other currency, which in turn increased its value.
At the same time, Bitcoin reacted to the collapse of the FTX crypto exchange, and that lowered its worth as it did with most other cryptocurrencies. All that said, Bitcoin is still the safest investment one can make in cryptocurrencies when long-term profits are taken into consideration.
Ethereum
Ethereum is also one of the largest and oldest cryptocurrencies out there. It’s just as accepted as a payment method, as Bitcoin and it has more complex tech applications when it comes to micro-transactions for instance.
In 2022, Ethereum stopped the mining process and made efforts to reduce the consumption of energy needed to create more coins. Traditional companies, such as banks still aren’t using Ethereum however, in ways they accept Bitcoin, which is its biggest downside.
There are also risks involved when it comes to investing in cryptocurrencies and therefore Ethereum as well. The biggest one comes from the fees involved when trading with Ethereum. They are much higher than with other cryptocurrencies and that can turn some users away.
BNB
A cryptocurrency called Binance is now known as BNB. It’s one of the most stable cryptocurrencies out there. When it comes to investing in cryptocurrencies, stability is what everyone is after and it’s much more difficult to find than with traditional investments.
The number of coins available, however, has taken a big hit recently. Now, there are 1.99 million tokens less – or about $619 million in worth. This hasn’t affected the price of BNB as of yet, but it did lower the managing cost since there are fewer coins and therefore fewer resources to worry about.
The biggest risk related to BNB comes from the fact that it’s native to one particular crypto exchange. This means that it can be regulated more intensely than other cryptocurrencies.
Cardano
The main appeal of the Cardano network comes from the fact that it has a smaller footprint. Investors like this because it means that every individual transaction will be faster and cheaper than with the more famous alternatives such as Bitcoin.
In 2022, Cardano added another feature – it enabled smart contract deployment. This means that new applications within gambling games are now available. It opens up a market that wasn’t available to Cardano users before and now they are competing with the likes of Ethereum.
The risk for investing in Cardano is in the fact that it has a rather low adoption rate. Many believe that this means it can’t compete with the big leagues in the industry. Investors believe that it may be difficult for a less-known cryptocurrency to gain a reputation similar to Bitcoin.
Polygon
Polygon was made by a team that’s responsible for Ethereum and that’s its most important draw from the perspective of an investor. It also has a token called MATIC which can be used as a payment service and as a settlement currency.
In 2022 Polygon launched zkEVM, a scaling solution made to rival that of Ethereum. It uses an innovative type of cryptography known as zero-knowledge proofs. It makes the transaction easier and less costly, by reducing fees. Investors see this as an opportunity to get more adoption and to expand a user base.
By the end of the previous year, Polygon hosted over 55,000 decentralized applications. These included some big names such as Stripe and Meta, and traditional financial institutions such as Deutsche Bank. Those are encouraging relationships, showing great potential when it comes to investing in this cryptocurrency.
Terra 2.0
Terra coin is somewhat different from the other coins we mentioned on our list. Its base is the so-called stable coin. This means that the value of this cryptocurrency is tied to the value of traditional fiat currency such as the US dollar. This makes it less volatile, but also less exciting to invest in.
However, Terra has had a bad year in 2022 since it crashed and burned based on the volatility of the foreign currency market. This still doesn’t mean that this crypto isn’t worth investing in. Such changes are common in the currency market and the tech behind the company is solid.
The biggest risk when it comes to investing in Terra 2.0 is that it’s not easy to determine how viable it will be in the long run. This isn’t because of its features or qualities but due to the suspicion behind the whole idea of stablecoin.
Avalanche
Avalanche is a relatively new addition to the big leagues of cryptocurrencies. Its main attraction comes from the fact that it’s supposed to be more scalable than the competitors, meaning it can grow fast. The currency was founded by a team from Cornell University and it was supposed to be a direct competitor to Ethereum.
Avalanche was founded in 2020 in a 24-hour initial coin offering. The price fluctuated from $10 to $30 and now it stands somewhere around $12. The blockchain behind it can process as many as 6500 payments per second, which is what got the investors interested in the first place.
The biggest risk for investing in this cryptocurrency comes from the fact that it’s novel and that it hasn’t had the chance to find its base of users yet.
Chainlink
Chainlink is an interesting cryptocurrency for investors due to its technology. It uses a decentralized oracle network to connect blockchain with data feeds, events, and payment methods. Their main goal is to make smart contracts a much more widely used payment method and in the end, a dominant one.
Chainlink plans to set up a partnership with Google the goal of which is for Google to use Chainlink technology to connect its users to cloud services. Former Google officials, as well as former LinkedIn CEO, are part of the Chainlink team.
The main risk involved in trading in Chainlink is in the volatility. That’s also the case with any other cryptocurrency so it won’t turn too many investors away.
Conclusion
The cryptocurrency market is on the rise and new currencies are being introduced all the time. When deciding which cryptocurrency to invest in, it’s important to balance the risks and the potential rewards that come with new currencies. Bitcoin and Ethereum are the most widely used and the safest currencies to focus on.
Other, newer cryptocurrencies however can quickly explode on the market and bring in the profit. They usually have an angle in terms of new tech or new applications. Before picking which smaller cryptocurrency to invest in, it’s useful to carefully consider all of the factors as well.
