Cryptocurrencies are a unique and exciting investment opportunity. Blockchain is a gamechanger for the way we do business and is impacting every industry under the sun. Cryptos are hot right now and it’s not hard to see why. People who invest in cryptocurrency are investing their money into something that could be one of the most important financial innovations since central banks were created — all with the hope for high returns on innovative new technology.
Cryptocurrencies offer high returns for those who believe in the future of digital currencies. And they provide investors with a way to support technological innovation while still earning money off their investments. The crypto industry had a great year in 2021, with the world still recovering from the Covid-19 pandemic. It was such an exciting time for cryptocurrencies that investors didn’t care about market volatility or anything else.
However, this year is a different story. Cryptos did not have the best start to 2022. Nevertheless, the recent developments highlight the perils of investing in a high-growth space. There’s an old investment rule that you should always remember: never invest more than what your budget can afford.
Keeping this in mind, here are seven cryptos to power your portfolio for the new year:
- Ethereum (CCC:ETH-USD)
- Solana (CCC:SOL-USD)
- Cardano (CCC:ADA-USD)
- Axie Infinity (CCC:AXS-USD)
- USD Coin (CCC:USDC-USD)
- Stellar Lumens (CCC:XLM-USD)
- Decentraland (CCC:MANA-USD)
Cryptos to Buy: Ethereum (ETH-USD)
Ethereum’s blockchain is the most actively used, while its token, Ether, now ranks second in both market capitalization and daily volume. More than 40 top 100 cryptocurrencies are built on this platform. Like most crypto-assets in existence today, Ethereum also has its downsides. Its blockchain is slow and costly to use. Despite this fact, you may have heard about how valuable ETH tokens were during 2020’s market turmoil: they skyrocketed 450%!
Smart contracts are the backbone of Ethereum, powering decentralized applications like decentralized finance (DeFi) and non fungible tokens (NFTs). If you had to pick one cryptocurrency that embodies the spirit of DeFi, it would be Ethereum. DeFi is an exciting new way to trade assets and unlock value. Users can directly borrow or lend money without involving banks in the process.
Ethereum’s popularity has been rising as its blockchain technology promises to improve efficiency and security. The Ethereum 2.0 upgrade will extend proof-of-stake protocols, making it less energy-intensive than before, while making transactions faster with lower costs. Several variables could cause Ethereum to disappoint investors. However, even if it doesn’t perform as well in 2022 compared with other cryptocurrencies, it is much more stable than other cryptos out there.
It wasn’t an easy road for Solana last year. But it eventually came out on top with a massive return. It was up around 9,821% for the year after experiencing general pullbacks from other coins over the last two months — all thanks to its focus on long-term value creation rather than quick profits or hype cycles.
Solana is the fifth-largest crypto market cap. Not only does its blockchain process up to 65,000 transactions per second and have low transaction costs of around $0.00025, but it also provides an easy way for businesses in different industries globally to get together on one platform
With Solana, you can easily develop your own NFTs and DeFi apps. The fast-growing ecosystem offers more than 400 projects, including NFT marketplaces and technology like automated financial management tools that will change how we live our lives forever.
Solana is the clear frontrunner in terms of scalability and stability. Its planned upgrade will provide developers with a stable blockchain that can scale effortlessly to meet demand.
Cryptos to Buy: Cardano (ADA-USD)
Cardano is a new and exciting cryptocurrency created with an approach focused on research in the world of cryptocurrencies. The creators behind this coin are engineers in their fields — mathematics and cryptography — who have come together to create something truly special.
To ensure the long-term stability of their blockchain, Cardano is developing five protocols that will address any future needs. The Cardano roadmap is an excellent way to visualize how each era functions and shows us what to expect from them in future releases. Each new release brings something different, making it easier for you to understand the evolution of this currency with time. These are necessary steps in ensuring this sustainable ecosystem’s growth for years to come.
All of these releases come with a host of upgrades. In the runup to these upgrades, Cardano will usually see a price hike. Once the changes go live, there is an inevitable fall in price. For day traders, this is an additional point to keep in mind.
Axie Infinity (AXS-USD)
It’s no secret that blockchain technology is making waves in virtual worlds. The metaverse is an online virtual world where people can explore, date, and interact with one another. The term was coined in 1992 by Neal Stephenson in his science-fiction novel Snow Crash. Last year, the concept caught fire. As our world becomes more digital, this is an investment area worth watching. If you’re looking for a way to invest in the metaverse, consider investing in virtual real estate. The class of assets is rich with potential and there are so many ways that one can go about it.
Axie has created a game on the Ethereum blockchain that’s been quite successful in recent months. Users collect, breed, and battle Axies — monster-like figures with different abilities for battles. To go into combat, users need at least three of these creatures. Once there, you will receive experience points that developers can use to enhance their Axies.
The idea of a NFT is very interesting. An Axie becomes one when it’s placed in gameplay or monetized through marketplace transactions, which offers gamers full ownership of their creations. It is a revolutionary concept. For decades, when a video game went offline, so did user creations. When you combine that with thousands of dollars a month in income, you can appreciate why Axie Infinity is generating massive interest.
Cryptos to Buy: USD Coin (USDC-USD)
USD Coin is an interesting and promising cryptocurrency for investors who want to invest in cryptos without excessive risk. This coin also carries immense growth potential, with its price reaching new highs last year.
For those who want cryptocurrency without all of its volatility — this might be just what you’re looking for. The user’s bank account is linked to the platform, and once completed, they can make transfers in U.S. Dollars. The money is converted into USDC, which users then exchange or trade for other cryptocurrencies.
Though many traditional investors are wary of cryptocurrencies, new stable coins such as USDC may change that. These coins offer a level-playing field for well-established institutions looking to invest in crypto trading platforms with security and stability.
Today, sending money abroad can take a full week to process. The current infrastructure of banks and financial institutions in the U.S. is not efficient enough for this type of transaction.
The process of sending money through the Stellar blockchain is more efficient than using a traditional method. By utilizing this network, you are able to send and receive payments in Lumens (XLM). Once they’re received by the recipient, your dollars will turn into native currency.
What’s even more incredible about the cost-efficiency of Stellar is that it averages a transaction fee of just 0.00001 XLM, meaning users would only have to pay $0.274 for 364,000 transactions before they hit their first dollar. Compare this number against traditional banking fees or higher costs associated with Bitcoin (CCC:BTC-USD) — which regularly sports an average price point around three times as expensive at over $2 per trade made through its network. The type of services that Stellar offers are not available in many countries. In the long term, this project will help create an inclusive digital economy.
Cryptos to Buy: Decentraland (MANA-USD)
The metaverse is the future of digital content, where you can recreate any place or event in full detail with virtual reality. This meta-universe will have many different versions created by users who explore the world through their avatars. With Facebook’s decision to rebrand as Meta Platforms (NASDAQ:FB), the idea of a virtual world has come into mainstream consciousness.
Decentraland is a virtual world built on Ethereum where users can buy and sell land, create content for their narratives, or monetize it by renting out space in this digital realm. The Decentraland project is a game-changer in virtual world development. It provides the infrastructure for shared worlds, consisting of land ownership records and interactions between users on their respective platforms.
We are still in the early days of the metaverse concept, but the potential is tremendous. The Covid-19 pandemic is forcing us to adapt faster than ever before. The virtual world has become a way of life for many people. A lot of people now work remotely and even visit the doctor remotely, as well. The metaverse is the natural progression of the trends we saw during the pandemic. Decentraland has a first-mover advantage in the space. If you want to play the trend in 2022, this is one of the best cryptos out there.
On the publication date, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.