The cryptocurrency market is showing signs of maturation. That is evident in many ways. Over the course of the last few years cryptocurrency, blockchain technology and decentralized finance (DeFi) have all gained incredible momentum. The best cryptos to buy right now are those with the right technological features.
I would assert that the sector is no longer a laughing stock, if it ever was. Those who derided it not long ago are much more likely to pay attention now. There are any number of ways to measure the maturation of the crypto space but a simple gauge can be found in what we currently discuss.
Early in 2021, Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD) garnered a much greater share of headlines. While both remain fundamental drivers of the sector, these days investors and pundits are increasingly interested in other companies and projects.
I’d assert that the trend will only continue to gain momentum. People are increasingly questioning the future of crypto and whether ETH and BTC are indeed the future at all. Whether they are or not remains to be seen. But I’ll omit them from this list for the sake of argument that their best days are behind them.
A good number of investors are simply looking for growth that replicates their respective trajectories anyway. You can’t get that by establishing a position in Bitcoin or Ethereum now.
So, what then are the projects and companies in cryptocurrency that are currently very attractive? In my opinion, these seven look particularly strong right now:
- Cardano (CCC:ADA-USD)
- Polkadot (CCC:DOT-USD)
- Chainlink (CCC:LINK-USD)
- Shiba Inu (CCC:SHIB-USD)
- Solana (CCC:SOL-USD)
- Polygon (CCC:MATIC-USD)
- Algorand (CCC:ALGO-USD)
Best Cryptos to Buy: Cardano (ADA)
If the investment maxim that you put your money behind companies with strong leaders and vision is correct, then Cardano is an absolute buy. I personally believe in Cardano founder Charles Hoskinson and what he is attempting to achieve.
Part of it is that he simply comes across as a very down to earth, genuine guy who also happens to be brilliant. That is a very subjective assessment, but nevertheless one that humans use.
In any case, Cardano is a cryptocurrency that continues to make progress toward lofty goals. The most recent news is that it has added smart contract functionality to its mainnet. The Sept. 11 deployment of Plutus, known as the Alonzo hard fork, fundamentally elevated the project.
It allows the implementation of smart contracts on Cardano. This in turn, allows the accelerated development of decentralized applications (DApps) on the network.
I alluded to the idea that continued Bitcoin/Ethereum dominance in crypto is less and less a foregone conclusion many once thought. I wrote about this idea as it relates to Cardano and Ethereum in a recent article.
“In 2020 a mere 31% of new DApps were deployed on Ethereum. That’s quite a stark figure. And it makes it really difficult to suggest Ethereum is the future and competitors including Cardano are simply flashes in the pan.” Cardano is still relatively inexpensive but really shouldn’t remain so for long.
Cryptocurrencies are subject to the same broad economic headwinds that all assets are. That’s why there’s likely a strong investment thesis for Polkadot in the midst of the Evergrande (OTCMKTS:EGRNY) scandal.
Overall market volatility inflicted by that scandal has brought Polkadot lower, along with other cryptos and equities as well.
But Polkadot is very likely to continue its overall upward trajectory moving forward. A year ago DOT was priced around $4.50. It has ebbed and flowed in lock step with Bitcoin and Ethereum through 2021 like most other cryptos.
It rebounded from Evergrande news on Sept. 21 and 22, but it has dropped to its prior levels in subsequent days.
The traders at FXStreet believe the technical signals suggest DOT will reach $40 by October. That positive sentiment is nice, but investors really look for utility and strategy when investing in DeFi. And that’s why Polkadot truly makes sense.
Polkadot allows for interoperability of data and token transferral across blockchains. The business of getting disparate nodes to communicate is massively valuable. You can think of it as serving the same role to the crypto space as HTML serves to the internet. The recent dip wasn’t due to any fault of Polkadot, meaning it’s a great opportunity.
Best Cryptos to Buy: Chainlink (LINK)
The utility of Chainlink is partially evident in its name. The company links many chains across its network, specifically as it relates to smart contracts.
Blockchains can be thought of as being isolated in a sense. While they are difficult for bad actors to manipulate by design, there is a problem: each blockchain functions independently. Users don’t have any inherent ability to send data from one blockchain to another.
Chainlink is working to fix that. Chainlink acts as a central hub for other blockchains. It’s basically a conduit or intermediary which receives data from one blockchain and sends it to another. That role is central to information transfer.
The transfer of information is important because it allows applications to be built which connect data to real world events enabling value to be created.
You may have noticed that this sounds a lot like what Polkadot is building. Well, there are many similarities. I don’t know if one will invalidate the other or if they can coexist. Perhaps one succeeds at the expense of the other. Perhaps both fail. Right now, though, both look like excellent projects to invest in.
Shiba Inu (SHIB)
I’ll be the first to admit that chasing meme coins is a foolish thing to do. The odds are that they’ll never amount to much, and any money invested will be lost.
But I make an exception for Shiba Inu, because the potential gains are too enticing from a mathematical perspective. Any investment in SHIB in the first four months of 2021 increased in value by orders of magnitude when it rocketed to historical highs in May. It’s possible some investors could have received a 500,000 times return on SHIB purchased on Jan. 1.
Monday morning quarterbacking isn’t a helpful strategy, I know. Simply identifying a low point and high point takes no skill. I get it, but even so Shiba Inu remains incredibly inexpensive at 0.0007 cents (that’s seven-ten thousandths of a penny).
Its recent listing on Coinbase (NASDAQ:COIN) sent it rising 35% higher, but that won’t be enough. There have been rumors that Amazon (NASDAQ:AMZN) will add SHIB as a payment, but nothing concrete has occurred as yet.
It could end up as another Dogecoin (CCC:DOGE-USD), but if it gets to 1 cent, a lot of people will make a lot of money.
Best Cryptos to Buy: Solana (SOL)
Solana is another of the fast rising competitors to Ethereum’s dominance. It recently burst onto the scene, with its price following suit.
Little more than a month ago it was trading around $40. Then it rocketed above $200 in the span of a few weeks. It came down some and before suffering a network outage on Sept. 14. It has remained in the $140 price range since.
One of the reasons Solana has garnered such attention is that it has the ability to process 65,000 transactions per second (TPS). That’s part of the reason it has been characterized as an Ethereum killer. Ethereum is working toward a 2.0 update which could take its transaction speed to 100,000 TPS. But that looks like it will happen late in 2022 and may be delayed further. Ethereum currently has a TPS of less than 100.
The outage was a consequence of a spike in transactional throughput. Transaction demand spiked to 400,000 per second at the time of the outage. As I’ve mentioned in other articles, I believe the demand spike is simply proof that Solana has utility that users seek. Sure, the outage is bad, but users were seeking its network for transactions in the first place. That’s good.
Let’s begin with what Polygon does, or rather what its utility is. Polygon is a sidechain protocol with Ethereum compatibility. It can be used to solve some of the problems inherent to Ethereum.
Namely, Ethereum is quite expensive from the standpoint of transaction fees. It can cost several dollars to transact on its network, with several spikes in cost to as high as $71 earlier this year.
Transaction costs on Polygon, on the other hand, are very cheap at a fraction of a penny.
It is still relatively cheap, at a bit over a dollar, and has yet to take off. The last time I wrote about Polygon was in June following the massive drop in Bitcoin in May. It was interesting then because it proved to be something of an outlier as it appreciated in price when the bottom fell out of Bitcoin.
So the bullish investment case for Polygon is that it runs tangential to Ethereum and costs much much less on a transactional basis. It also costs slightly more than $1, making it very inexpensive.
Best Cryptos to Buy: Algorand (ALGO)
Like MATIC, ALGO can be purchased for under $2. Attractive price aside, what Algorand has going for it is utility and strong pedigree.
The company has dozens and dozens of use cases listed on its website. For me personally, that was one of the reasons Cardano has always been so appealing. Both companies are well aware that the value in blockchain will ultimately be derived from what gets built upon it.
It looks like Algorand has already inked approximately 500 partnerships to date. That means there will likely be a lot of utility built in the future on its platform. And at the end of the day, utility is money.
The other parallel between Algorand and Cardano is that their respective founders lend a certain pedigree to their projects. Cardano’s Charles Hoskinson was one of the founders of Ethereum.
Algorand’s founder is MIT professor Silvio Micali. Micali won a Turing Prize in 2012, considered the equivalent to the Nobel Prize in computer science.
On the date of publication, Alex Sirois 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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.