Investing in the cryptocurrency market is an intriguing proposition for most investors, offering a “high risk, high reward” type of investment. While the crypto space remains highly speculative at this point, it doesn’t necessarily mean investing in cryptos is a poor decision.
If a digital asset strikes real-life utility, it is primed to skyrocket, generating massive returns for those early investors. Therefore, investors need to zoom out and take a long-term approach to crypto investing. For instance, Ethereum (CCC:ETH-USD) was the first cryptocurrency to offer smart contracts, and it became a game-changer for the blockchain platform. Its market capitalization is now over $341 billion.
Such smart contracts currently power the lucrative decentralized finance (DeFi) industry, eliminating the middleman from various financial transactions. Ethereum dominates the DeFi space, where the value of cryptocurrencies pledged has skyrocketed over $100 billion in 2021. Out of over 3,000 decentralized applications (dApps) that currently extend across various blockchains, about 2,800 are based on the Ethereum network.
Meanwhile, other smart contract platforms that promise fast transactions and low costs are working hard to gain market share from Ethereum. The recent surge in prices of these wannabe ‘Ethereum-killer’ cryptos reflects the extraordinary investor interest in these next-generation smart contract platforms.
One company that is paying close to attention to the growth in Bitcoin (CCC:BTC-USD), as well as altcoins, is the cryptocurrency exchange platform Coinbase Global (NASDAQ:COIN). In August, management announced “plans to spend $500 million plus 10% of future profits in a broad portfolio of digital assets that mirrors its customers’ holdings.”
Understandably, crypto investors were excited to hear that Coinbase will beef up its balance sheet with digital assets. Several other public firms that also hold cryptos include Galaxy Digital Holdings (OTCMKTS:BRPHF), MercadoLibre (NASDAQ:MELI), MicroStrategy (NASDAQ:MSTR), Square (NYSE:SQ) and Voyager Digital (OTCMKTS:VYGVF).
Given the volatility in prices of cryptos, it’s difficult to forecast where digital assets are headed in the short run. But in addition to long-term tailwinds provided by corporate investments, analysts are also watching issues that range from regulatory risks to institutional adoption of crypto payments.
With that information, here’re seven cryptos to buy that could gain traction in the coming quarters:
- Avalanche (CCC:AVAX-USD)
- Cardano (CCC:ADA-USD)
- Cosmos (CCC:ATOM-USD)
- Fantom (CCC:FTM-USD)
- Polkadot (CCC:DOT-USD)
- Solana (CCC:SOL-USD)
- Tezos (CCC:XTZ-USD)
Cryptos to Buy: Avalanche (AVAX-USD)
52-week range: $2.79 – $79.52
Market cap: $14.1 billion
Launched by Ava Labs in 2020, Avalanche aims to host the first decentralized smart contract “platform built for the scale of global finance, with near-instant transaction finality.” The network can settle transactions in less than a second, while those on the Ethereum network take a lot longer, possibly up to several hours. It is an open-source network that primarily focuses on decentralized finance applications.
Avalanche competes with Ethereum to become the internet’s primary host of dApps. The network uses an eco-friendly proof-of-stake (PoS) protocol to reward its users. AVAX-USD, its native coin, is not inflationary like Ethereum, as the token has a maximum supply of 720 million. Additionally, the network burns a portion of its fees with every transaction.
Avalanche has recently integrated data feeds from Chainlink (CCC:LINK-USD). In other words, the platform is now bringing data from outside sources into its blockchain.
As a result, Avalanche can run smart contracts with real-world API connections, allowing parties to run instant transactions based on stock market data, future prices, breaking news or weather forecasts.
In addition, Avalanche has a flourishing decentralized finance ecosystem thanks to its prominent partnerships. Tether (CCC:USDT-USD) is expected to launch its coin on the Avalanche blockchain, offering a faster and cheaper way to transfer the stablecoin.
Frontier (CCC:FRONT-USD) has also partnered with the platform to support AVAX staking and non-fungible tokens (NFTs). The Frontier collaboration allows even more users to access DeFi applications within the Avalanche ecosystem.
Avalanche looks primed to continue growing in the DeFi space. AVAX recently hit an all-time high of $79.52 on Sept. 22, and is currently hovering at $62. It is up 1,600% year-to-date (YTD).
52-week range: 8.8 cents – $3.10
Market cap: $67.2 billion
Cardano aims to be the go-to blockchain platform for smart contracts. It recently became the world’s third-largest cryptocurrency, though it has dropped back down to fourth. Its dual-layer system and friendly programming language offer an ideal ecosystem to host tokens and dApps. Cardano boasts lower fees and quicker transactions than Ethereum.
The Cardano platform also uses an eco-friendly PoS system. It has a limit on how many tokens can be produced, similar to Bitcoin, which helps increase its value over time and enables users to hedge against inflation.
The “Alonzo” upgrade, which launched Sept. 12, now allows users to run smart contracts on the Cardano blockchain and develop dApps. Investors are noting that the demand for ADA has significantly increased due to surging interest in DeFi and NFTs. However, Cardano still has a lot of catching up to do with Ethereum in terms of the number of smart contracts build on the platform.
ADA has surged by nearly 1,100% this year alone. It currently trades a few cents over $2. Its current price level possibly indicates that crypto bulls have already priced in the potential for a broader adoption of the platform due to its smart contract capabilities.
Cryptos to Buy: Cosmos (ATOM-USD)
52-week range: $1.96 – $44.70
Market cap: $7.8 billion
Similar to Polkadot and Avalanche, Cosmos is another blockchain that helps cryptos connect with each other. Dubbed the “Internet of Blockchains,” the Cosmos network focuses on creating an entire ecosystem of interconnected blockchains. The protocol’s utility token is ATOM.
Cosmos has attracted investment from several prominent names in crypto, including Paradigm and Bain Capital. The network is widely used by developers, as it utilizes a modular framework to make it easier to develop dApps.
More than 250 apps and services already use the Cosmos network, with over $112 billion digital assets under management. Well-known projects created using Cosmos include Binance Chain (CCC:BNB-USD), Terra (CCC:LUNA-USD) and Crypto.com Coin (CCC:CRO-USD).
The recent launch of its first DeFi interface, its integration with Ethereum, and its interoperability with Bitcoin have contributed to a remarkable surge in ATOM’s price. It recently hit an all-time high of $44.70 on Sept. 19. It currently hovers close to $34. It has surged 485% YTD and 549% over the past year.
52-week range: 1.3 cents – $1.93
Market cap: $3.2 billion
Fantom is another smart contract platform that promises fast transactions and low costs. It uses a Directed Acyclic Graph (DAG) consensus. Research led by Yepeng Ding highlights, “DAG-based techniques are free from mining and incentive mechanisms to save unnecessary computing costs and improve a lot in scalability, which provides the possibility to construct a decentralized database platform with efficiency, cost-effectiveness and security.”
The Fantom platform is ultra-fast and highly scalable, as it can process thousands of transactions per second and scale to thousands of nodes. Users can deploy and run Ethereum dApps on Fantom.
As a high-performance platform, Fantom aims to become the information technology infrastructure backbone for emerging smart cities. It can communicate across multiple service providers and store extensive amounts of data securely.
In addition, its DeFi suite enables users to mint, trade, lend, or borrow digital assets directly from their wallets with almost zero fees. Fantom has recently announced the launch of Rarity, a game in which players can craft and trade NFTs. NFT gaming is becoming a popular niche in the crypto space.
Fantom’s price surge in 2021 reflects surging investor interest in next-generation smart contract platforms. FTM-USD is up more than 6,500% since the start of the year. It hit an all-time high on September 9. It has since declined 36%, currently hovering at $1.22. Its market cap of a bit over $3 billion is considerably smaller than its peers, implying higher growth opportunities during the current crypto bull-cycle.
Cryptos to Buy: Polkadot (DOT)
52-week range: $3.62 – $49.69
Market cap: $27.9 billion
The Polkadot network was launched in 2016 by Gavin Wood, co-founder of Ethereum. The project was developed by the Switzerland-based Web3 Foundation, which promotes a fully decentralized web. Web3 refers to the next-generation internet, where decentralized platforms offer users complete control over their privacy and personal data.
Polkadot wants to “deliver the most robust platform for security, scalability and innovation” and “become the new internet of blockchains that are going to seamlessly communicate with each other.” Put another way, the platform helps develop projects by enabling transparent cross-chain connectivity and customization of blockchains. It connects various blockchains to facilitate an easier and more efficient dApp development.
DOT-USD is the digital token used for staking, bonding, and governance on the platform. With a market cap of almost $28 billion, it is currently the ninth-largest digital coin in the crypto space. The crypto started 2021 at around $9. It is up 233% YTD and 514% over the past 12 months.
52-week range: $1.09 – $214.96
Market cap: $40.8 billion
The Solana blockchain also aims to compete with the Ethereum network. Supporting a hybrid architecture of proof-of-stake (PoS) as well as proof-of-history (PoH) protocols, Solana is one of the fastest blockchain protocols available. SOL, Solana’s native token, powers the platform. There are over 272.6 million coins in circulation, with no fixed supply.
Combining the PoS algorithm with a newer PoH makes Solana a robust destination for dApps and NFT projects. In the past month, Solana has been on a tear as NFT sales have surged. As a result, several dApp platforms have integrated with Solana.
There are currently more than 400 projects built on Solana’s network, including various DeFi applications. FTX and Alameda Research created their decentralized cryptocurrency exchange and native currency Serum (CCC:SRM-USD) on the network.
Solana is currently the seventh-largest digital coin in the market. SOL recently rallied to an all-time high on Sept. 9. It has since declined 38%, currently hovering around $134. It’s up a whopping 7,200% YTD.
Cryptos to Buy: Tezos (XTZ)
52-week range: $1.64 – $8.40
Market cap: $5.1 billion
Launched in 2018 by Arthur Breitman, Tezos is a smart contract platform designed as multi-layer software. Much like Solana and Ethereum, Tezos also wants to see more global adoption of smart contracts and DeFi in everyday business activities. As it uses a delegated proof-of-stake model, Tezos is more eco-friendly and faster than the Ethereum network.
While popular blockchains have had to cope with hard forks and splits, Tezos is designed in a way to avoid this pitfall. The Tezos blockchain uses a “self-amending crypto ledger,” which allows it to evolve without requiring a hard fork. People who own Tezos are allowed to propose and vote on-chain to approve any changes without the need for in-person discussions.
In late August, Swiss-based Incore Bank, Crypto Finance Group, and Inacta declared they would be using Tezos to create DAR-1 tokens. These new tokens will utilize smart contracts to comply with anti-money laundering regulations and improve governance. Incore Bank also recently announced it would launch staking services for the Tezos network.
Tezos’ price hasn’t seen the same spike as its competitors. XTZ-USD, the native currency, started 2021 at around $2. It currently trades close to $6. XTZ is up more than 186% YTD.
On the date of publication, Tezcan Gecgil 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.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.