3 cryptocurrencies that are easy to keep forever

The process of determining whether a particular stock belongs in your portfolio should focus on a handful of things.

It turns out that this same strategy can be applied to one of the newer asset classes, cryptocurrencies.

Stocks and cryptocurrencies aren’t all that different. Both offer investors the opportunity to earn passive income. Both fluctuate in value as demand rises and falls. And finally, they both have to provide something that is useful.

In general, cryptocurrency investors need to look for blockchains that provide real utility and purpose. To do this we can look at the statistics on the growth of a blockchain, the problem that the cryptocurrency aims to solve and the long-term potential it holds.

On this basis, there are three cryptocurrencies that stand out from the crowd: Bitcoin (BTC -1.13%), Ethereum (ET -0.24%)And Polygon (MATIC -1.42%).

The original cryptocurrency still has it

Bitcoin’s rise to the most valuable cryptocurrency has made it the strongest candidate for public companies and institutional investors looking to start gaining exposure to the asset class. In recent years, companies like it Tesla, MicroStrategyAnd To block they all added Bitcoin to their balance sheets.

Black rock, the largest investment management company in the world, has offered its high-profile clientele the opportunity to purchase Bitcoin. Therefore, the cryptocurrency is directly exposed to sums of wealth that no other cryptocurrency has access to. If Bitcoin continues to attract the attention of institutional investors, a price appreciation could follow.

Furthermore, the Bitcoin network has grown steadily, a key sign of its growing use and value around the world. We can look at the number of transactions on the blockchain over the past 10 years to get an idea of ​​how much Bitcoin is growing. Ten years ago, there were only around 30,000 transactions per day on the Bitcoin blockchain. Today that number is around 260,000; an increase of over 750%.

READ ALSO :   Cost of Cryptocurrencies: Report says US bitcoin is as dirty as 6 million cars - Business

Furthermore, as more national currencies devalue due to the increase in the money supply, more and more investors are looking to Bitcoin as a hedge against devaluation. Due to its limited scarcity and advanced level of security and decentralization, Bitcoin cannot be manipulated like governments’ currencies or even some of its other cryptocurrency counterparts.

The DeFi champion doesn’t stop

Ethereum is the second most valuable cryptocurrency, but it provides a completely different utility than Bitcoin. It is a programmable blockchain. This means that developers can build applications with pieces of code known as smart contracts that automatically apply actions when certain conditions are met.

These smart contracts are the backbone of an industry known as decentralized finance or DeFi. Since 2020, Ethereum’s DeFi ecosystem has grown from around $ 600 million to over $ 30 billion today. At one point in 2021, Ethereum’s DeFi was worth more than $ 100 billion.

Although growth has subsided during the recent bear market, Ethereum continues to be a favorite of DeFi developers. As DeFi continues to evolve and provide alternatives to traditional financial products like lending and lending, Ethereum is expected to continue to dominate the burgeoning industry, particularly with upgrades like The Merge.

A rising star of the Web3

In just five years, Polygon has become one of the most popular and valuable Layer 2 blockchains.

Instead of trying to reinvent the wheel, Polygon took a different approach and instead works with the Ethereum blockchain. As Ethereum has evolved into one of the most popular blockchains, the network has become slow, congested and sometimes expensive to use. To combat this, Polygon processes transactions cheaper and faster on their blockchain and then adds them back to Ethereum.

READ ALSO :   Holders of Cronos (CRO) and Bitcoin Cash (BCH) surprised by the negative price action

As a result, Polygon’s potential is attracting the attention of some of the world’s most prolific companies. Recently, Disney (DIS -2.23%) selected Polygon to be part of its 2022 class of the Accelerator Program, a venture capital firm that provides participants with funding and resources. Furthermore, Half announced that the blockchain will be one of four to be integrated with Facebook and Instagram’s new non-fungible token (NFT) functionality. Coke has even released a series of NFTs on the blockchain.

Of greater interest may be Polygon’s role in the development of Web3, a name given to the next evolution of the Internet that aims to be decentralized, permissionless and completely open source.

Polygon co-founder Mihailo Bjelic predicts that Polygon will eventually become “the Holy Grail of Web3 infrastructure”. He believes that the ideal Web3 blockchain should possess three main qualities, “scalability, security and compatibility with Ethereum”, criteria that Polygon easily meets.

Profitable opportunities abound

It is becoming increasingly difficult to ignore the role cryptocurrencies could play in the future of finance. Taking note of technological and social trends is one of the most efficient ways to position your portfolio for long-term success. Hindsight is always 20/20 but imagine if you would have invested in household names like Apple And Amazon Years ago.

Just like in the past, technology is being developed to meet the needs of society. Investors can follow suit and realize that as trends continue to evolve, there are similar opportunities that can be tapped in the cryptocurrency world today.

John Mackey, CEO of Whole Foods Market, a subsidiary of Amazon, is a board member of The Motley Fool. Randi Zuckerberg, former director of market development and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool has positions and recommends Amazon, Apple, Bitcoin, Block, Inc., Ethereum, Meta Platforms, Inc., Polygon, Tesla and Walt Disney. The Motley Fool recommends the following options: long January 2024 calls $ 145 on Walt Disney, long January 2024 calls $ 47.50 on Coca-Cola, long March 2023 calls $ 120 on Apple, short January 2024 calls $ 155 on Walt Disney and short March 2023 calls $ 130 on Apple. The Motley Fool has a disclosure policy.

READ ALSO :   Bitcoin SV Price Prediction | Is Bitcoin SV a good investment?

Tinggalkan komentar