The crypto sector is one that has always been volatile. However, of late, this volatility appears to have skyrocketed. This sector surged incredibly last year, followed by an end-of-year decline, which continued into January. In February, however, the tides have started to turn, with an impressive rebound brewing.
Accordingly, many investors are now wondering which direction the winds will blow for the remainder of the year.
In this regard, I have no idea how the overall crypto sector will perform. On the one hand, there’s a number of headwinds, including increasingly burdensome regulation globally, rising interest rates and increasing usage of derivatives that spell volatility on the horizon.
On the other hand, crypto has gone mainstream, with the recent “Crypto Bowl” Super Bowl event showing how far a once niche movement has become. Additionally, corporate and institutional adoption of crypto continues to pick up. Should these tailwinds continue, there’s a lot to like about where this sector could be headed over the long-term.
The range of crypto projects investors can choose from has grown incredibly. There are thousands of tokens out there, each representing networks doing different things. Picking which tokens may outperform over the long-term isn’t an easy task.
That said, these seven cryptocurrencies are tokens I think have tremendous potential to be long-term winners. Let’s dive into why these tokens may deserve investor consideration right now.
- Bitcoin (BTC-USD)
- Ethereum (ETH-USD)
- Dogecoin (DOGE-USD)
- Solana (SOL-USD)
- Lucky Block (LBLOCK-USD)
- Fantom (FTM-USD)
- Stellar Lumens (XLM-USD)
Top Crypto Bets: Bitcoin (BTC)
Over the long-term, Bitcoin hans’t disappointed crypto-enthusiasts in terms of returns. However, volatility has remained omnipresent with this token, one that’s seen multiple 50%+ declines over the past decade. Accordingly, many long-term investors in Bitcoin look at this most recent 50% decline from its peak as the latest buying opportunity.
Bitcoin is the largest digital asset in the world, with a market capitalization of $835 billion at the time of writing. Still down considerably from its peak, Bitcoin has started to rebound. Since hitting a low of around $33,000 per token three weeks ago, Bitcoin has surged above the $44,000 level at the time of writing.
Bitcoin’s value mainly comes as a long-term store of value and a means of transferring money globally. This token is widely considered to be the “gold standard” in the crypto space, and is generally perceived to be a market hedge, to some degree. For long-term investors seeking a store of value other than gold, Bitcoin may be an attractive place to hide amid market uncertainty of late.
The world’s second-largest cryptocurrency, Ethereum, is a top holding among many long-term investors. That’s because this crypto network is the foundation upon which most decentralized finance (DeFi) applications are built.
Like other top tokens such as Bitcoin, Ethereum has lost approximately half of its value since its peak. However, this token’s recent rise is an indication investors remain bullish on the overall Ethereum network right now.
Ethereum is currently undergoing a series of updates that will usher in Ethereum 2.0. This updated network will transform from a proof-of-work validation mechanism to a proof-of-stake system, improving the network’s cost structure and vastly improving speeds. It’s generally believed that this updated network could handle as many as 100,000 transactions per second (TPS), something that would result in vastly improved fees, one of the biggest gripes around Ethereum right now.
Of course, risks with this update, and with the overall sector remain. However, investors looking for a top crypto leader often pick Ethereum for good reason.
Top Crypto Bets: Dogecoin (DOGE)
Perhaps the most speculative token on this list is Dogecoin. This dog-inspired token has gone parabolic since its inception, though it has declined much more than most other large-cap tokens due to its speculative nature. Indeed, as far as “high-risk, high-upside” bets go, Dogeocin exemplifies this to the extreme.
Initially started as a joke, Dogecoin has since turned into a network with some edge use cases. There’s increasing adoption of this network, and recent high-profile corporate acceptance of DOGE tokens (specifically by AMC) has driven interest in this cryptocurrency of late.
Dogecoin is perhaps the most sentiment-driven token in the world, with investors buying heavily on any Elon Musk tweet, or generally bullish piece of news. However, when sentiment turns bearish, the downside on this token has been brutal in the past.
As an investment, it’s hard to make the case that Dogecoin makes much sense at all. This network carries little utility, and this token has an extremely high beta relative to its peers. However, for bulls who think crypto could take off once again this year, perhaps this meme token may start to look attractive.
Down 61% since its all-time peak in November, Solana still has a lot of room to grow. It was one of the top-performing cryptos in 2021, gaining over 14,000% in just a year. There are certainly doubts with respect to whether Solana will be able to replicate its 2021 gains. Nonetheless, I still think this token is a top cryptocurrency to consider this year.
Often referred to as one of the top “Ethereum Killers,” Solana’s cost structure and transaction speeds are what many investors like with this network. With Solana’s unique proof-of-history consensus protocol, users enjoy a transaction speed of up to 65,000 TPS. Its verification process uses less energy, making Solana a greener alternative to BTC and ETH.
Even though Solana’s current dip was mainly tied to sector-specific catalysts, this token has a number of fundamental drivers that appear to be positive for investors thinking long-term. Solana’s ecosystem is expanding rapidly, with the potential for more developer interest driving this token’s flywheel.
The number of active developers using Solana’s blockchain has doubled that of Ethereum’s. Thus, I remain very bullish on this token’s long-term potential.
Top Crypto Bets: Lucky Block (LBLOCK)
Investing in digital assets is the new trend, so new cryptocurrencies keep entering the market every day. Among these newly launched cryptos is Lucky Block. Introduced at the end of January 2022, LBLOCK was up by over 1,000% within just three days. It is now trading at a “cheap” per-token value of $0.0071.
Even though it is highly risky because of being extremely new, Lucky Block is a unique crypto with a compelling target market. This cryptocurrency is targeting the multi-billion dollar lottery industry. Through the use of smart contracts, the developers behind this project found a way to create a global platform for users to play secure lottery games.
Thus, Lucky Block is a project that combines both gaming and gambling, two high-growth sectors. Via a Random Number Generator (RNG), Lucky Block ensures that none of the games has a third-party influence or is predetermined. Lucky Block also offers a fast payout while bringing in the factor of entertainment for crypto-enthusiasts.
For those looking for a truly high-risk, high-upside pick, this is perhaps the most entertaining option on the list.
Among numerous Ethereum killers, Fantom is a relatively new contender disrupting the DeFi industry. Fantom has surged approximately 19,000% since its inception in December 2019. It is one of the more established projects on this list, and therefore presents a nice risk-reward for investors to consider.
Fantom’s main purpose is to solve two of the key issues in the crypto world right now: scalability and interoperability. Via a proof-of-stake consensus mechanism called Lachesis, Fantom has found a way to create unique efficiencies with the finality process. Users typically enjoy a time-to-finality (transaction completion) of one second. That’s lightning fast.
Fantom is trying to position itself as a faster and cheaper alternative to Bitcoin and Ethereum, and it is working. This network is fast-growing, becoming the third biggest dApp network. On Fantom’s platform, 129 protocols are built, double the amount on Solana’s platform.
This project is one I’ve been keeping an eye on recently. While I’m going to wait on the sidelines for now, this token has made the watch list, and may make the buy list in the future.
Top Crypto Bets: Stellar Lumens (XLM)
This first-generation cryptocurrency is considered one of the most volatile assets in the market. Even though XLM fell almost 40% in 2021, Stellar’s price unpredictability is what captivates short-term and long-term investors. In less than four months, this cryptocurrency once dropped from $0.938 to $0.18. In the last week alone, XLM gained 17.15% to reach $0.24.
Industry giants like IBM (NYSE:IBM), Deloitte, TechCrunch, etc. use Stellar’s Universal Payment System. What makes XLM unique is that on its platform, you can run fiat currencies and cryptocurrencies in parallel. Thus, with transaction fees, you can easily convert your fiat money into crypto.
The main purpose of Stellar is to allow fast and effective international transactions. As it does not operate as a traditional cryptocurrency and faces minimal competition, it can achieve its goal of becoming the only global payment network in 2022. Thus, now may be a great time to consider picking up XLM tokens as a high-risk, high-upside bet in 2022.
On the date of publication, Chris MacDonald 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.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.