Crypto bulls are rejoicing. Or at least most of them are not in a state of despair anymore despite the recent volatility. Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD) and several other cryptos have come erupting back to life this summer.
In late July, the group was grinding out near its low. Then bt mid-August we saw many of these names rally more than 50%. By early September, the gains had swelled to more than 100% in several holdings. While many investors were drawn in at higher prices, the recovery offers a glimpse of what these names can do under the right momentum.
It’s also a move we were expecting just a few months ago.
Despite the recent volatility, most crypto holdings sport big gains over the last six weeks or so. But that’s the zoomed-in look. If we’re zooming out, what are some cryptos we can focus on for the long term?
Let’s dial it back and look at six cryptos to own for the next decade.
- Bitcoin Cash (CCC:BCH-USD)
- Polkadot (CCC:DOT-USD)
- Cardano (CCC:ADA-USD)
- Litecoin (CCC:LTC-USD)
Cryptos for the Next Decade: Bitcoin (BTC-USD)
How can we not lead off the list with the 800-pound gorilla? Bitcoin has been and remains the largest cryptocurrency by market capitalization, weighing in at about $850 billion. That’s easily more than double the next largest cryptocurrency in the market (spoiler alert: it’s the next one on this list).
In any regard, to fade the largest crypto seems like a bad idea when we’re thinking in terms of a decade. That’s not to say the largest can’t fail — it certainly can — but when the market is as volatile as the crypto space, it helps to have some stability.
In any regard, Bitcoin has seen a massive rally as of late. Like I said in the intro, we were looking for a summertime boom and we finally got it. Bitcoin is currently higher by more than 70% from its June low. Sitting just below the $50,000 mark now, I’m not sure when we’ll see it challenge the highs near $65,000. However, it seems like it will do so at some point in the future.
So far, this has proved to be an excellent store of value, despite the heavy volatility.
As telegraphed in the prior section, Ethereum is our next pick to own for the next decade. I have really liked Ethereum, because it has proved itself on multiple levels.
First, it has proven to be a viable store of value, much like Bitcoin. Admittedly, that was not the intention of its creation. Bitcoin was created to be an alternative to fiat currency. It has a set amount of supply that is released in an orderly manner. It’s not a money supply that is governed by a central bank that increases or decreases supply as it sees fit.
However, Ethereum has proven itself as a viable, albeit volatile, store of value.
That said, it also has real-world applications as well. Where Bitcoin struggles in speedy transactions — such as checking out during a transaction — Ethereum is much faster. Because of Bitcoin’s slow process, credit card companies don’t really face a real disruptive threat from it. Ethereum is much faster, though. Not that I think Visa (NYSE:V) is necessarily facing the guillotine, but a real-world application is a nice change of pace in this field.
Further, Ethereum is capable of smart contracts, which allows a payment or escrow holding to be released automatically upon the completion of certain milestones or contractual satisfactions.
Ethereum is also fueling the NFT market we’re seeing unfold in front of us. I don’t know how long the NFT market rage will last, but in the meantime, Ether is the one that’s making it possible.
Finally, let’s not forget about the upcoming “Ethereum 2.0” upgrade to ETH’s current protocol, which promises to convert the current coin from a proof-of-work system to a proof-of-stake system. This will ultimately cut back on energy spent on mining operations and improve Ethereum’s network speed.
Cryptos for the Next Decade: Bitcoin Cash (BCH-USD)
Like Bitcoin, Bitcoin Cash is on our “Next Decade” list. Unlike Bitcoin though, this one is much newer. Created in 2017 from a Bitcoin fork, it was designed to “accommodate a larger block size compared to Bitcoin, allowing more transactions into a single block.”
Bitcoin and Bitcoin Cash are not all that different, although size is certainly one of them. Bitcoin Cash weighs in with a market cap of just $12 billion. However, that still makes it one of the larger cryptos to choose from.
The main difference and benefit of Bitcoin Cash is the faster transaction speeds. Just as transaction costs and speed is a major negative for Bitcoin, it’s a positive for Bitcoin Cash.
I’m not a visionary for the crypto space. However, I can see a future down the road where Bitcoin remains a store of value and the transactions are completed using Bitcoin Cash. Perhaps that will never happen, but it doesn’t seem likely that Bitcoin Cash is going away.
Polkadot is an interesting one. I don’t know that it will really take off in the way that some of the larger cryptocurrencies have, but it certainly has potential. First though, what is Polkadot? This is what Forbes has to say:
“Polkadot was founded by the Web3 Foundation in Switzerland and is an open-sourced, decentralized web created by ex-Ethereum CTO Gavin Wood, Robert Habermeier and Peter Czaban. Gavin Wood is one of the founders and is ex-CTO and co-founder of Ethereum.”
Additionally, the company is “on track to deliver the most robust platform for security, scalability and innovation.” It “provides unprecedented economic scalability by enabling a common set of validators to secure multiple blockchains. Polkadot provides transactional scalability by spreading transactions across multiple parallel blockchains.”
I’m loving that one of the founders of Ethereum is here developing another cryptocurrency. I don’t know that it will be adopted like the others, but it at least shows that its underlying fundamentals should be strong.
Cryptos for the Next Decade: Cardano (ADA-USD)
Introducing one of the younger cryptocurrencies out there, many investors are just now hearing about Cardano. Its initial release day was in 2017, but its stable release wasn’t until May 2021.
It’s crazy to think that Cardano is flying under the radar right now. That’s especially true as a majority of casual crypto investors are likely still unfamiliar with it. Despite that, it commands the third-largest market cap in the space, weighing in at $76 billion.
Like Polkadot, one of the former Ethereum founders was behind this one, Charles Hoskinson. Like Ethereum 2.0, Cardano is a proof-of-stake cryptocurrency. According to Cardano:
“Cardano is provably secure against bad actors and Sybil attacks. Every transaction, interaction, and exchange is immutably and transparently recovered, and securely validated using multi-signature and a pioneering extended UTXO model.”
Last but not least, we have Litecoin. With a market cap of about $12 billion, it’s far from the largest name on this list. In fact, it’s the smallest cryptocurrency on this list, although it’s not the youngest.
Founded in 2011, Litecoin is thought of as the “lite version of Bitcoin,” according to its founder Charlie Lee.
Because of its smaller size and lack of popularity vs. some of the crypto market’s other more popular options, it’s hard to know if Litecoin will be thriving 10 years from now. Heck, it’s hard to know what will be thriving in a decade. Very likely it will be something we’ve never heard of, too.
In any regard, only 84 million Litecoins can make it to circulation, so unlike Dogecoin (CCC:DOGE-USD) or some other cryptos, there’s at least a limit to the supply. That should help keep it relevant in the future, even if it fails to gain a full-steam of momentum.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.