Similar to the stock market, cryptocurrencies also see bear markets and negative investor sentiment. Of late, the crypto market has faced a wave of massive dips, dragging down the price of most tokens in excess of 50% of their peaks in the matter of months. The overall crypto market has gone from a valuation of more than $3 trillion in November to just $1.3 trillion as of last week.
However, over the past few days, the cryptocurrency market has begun to recover. The crypto market is now quickly approaching the $2 trillion mark, with investors jumping back into this risk-on trade heavily. Whether this means the “crypto winter” everyone was calling for just a week ago is over or not remains to be seen. However, it’s clear that bullish momentum has finally returned to the crypto space.
Longer-term crypto investors have seen previous dips that have been much more pronounced, and longer-lasting than this one. Accordingly, this dip may present an intriguing opportunity for investors looking to pick up high-quality crypto projects on the cheap.
The question is — which cryptocurrencies are worth buying?
Here are seven of the cryptocurrencies that are on my watch list right now as potential buys.
- Ethereum (ETH-USD)
- Solana (SOL-USD)
- Cardano (ADA-USD)
- Polkadot (DOT-USD)
- Polygon (MATIC-USD)
- Litecoin (LTC-USD)
- Axie Infinity (AXS-USD)
Top Cryptos at a 50% Discount: Ethereum (ETH)
Currently the world’s second-largest cryptocurrency, Ethereum is a core holding of many long-term crypto investors. Next to Bitcoin (BTC-USD), Ethereum is largely viewed as the next big thing. This smart contract-enabled network has become the lifeblood of the decentralized finance (DeFi) movement. Accordingly, investors may not be surprised to learn that this token is one that’s risen approximately 30,000% over the past five years. Those are certainly some decent long-term returns for investors.
The introduction of smart contracts into this network early on has served Etheruem well. Currently, there are approximately 2,900 decentralized applications (dApps) on the Ethereum network. As the world searches for more blockchain-based solutions, Ethereum is likely to be the platform upon which these solutions are based.
This network is currently undertaking a massive update, which will bring Ethereum 2.0 to life. Expectations are that Ethereum 2.0 should be fully operational this year. This update brings with it the potential for faster speeds and lower costs, a key driver of investor interest in this token right now.
Now, among the cryptocurrencies often referred to as “Ethereum killers,” Solana is top of mind for most investors. The 8th-largest cryptocurrency by market capitalization, Solana is an extremely intriguing blockchain project to look at. Enabled with smart contracts and a proof-of-stake validation mechanism, Solana has a speed and cost advantage that’s worth considering.
What gives Solana an advantage over other cryptos is its infrastructure. Solana has 400 dApps on its network and works on a unique proof-of-history (PoH) protocol. This model allows Solana to run multiple blockchains in parallel and also removes the necessity of verifying timestamps of every transaction.
Reportedly, the Solana network has the potential to process 50,000 transactions per second. Additionally, this network has charged incredibly low gas fees of $0.00025 per transaction recently. These fundamentals are hard to beat, and make Solana a network worth watching over the long-term.
These fundamentals also helped give rise to Solana Pay, a platform allowing for crypto payments for merchants, a big catalyst I’ve got my eye on right now.
Top Cryptos at a 50% Discount: Cardano (ADA)
Interestingly, Cardano just surpassed Solana in terms of market capitalization recently. This top proof-of-stake network is another “Ethereum-killer,” and is widely considered to be the largest pure proof-of-stake network out there.
Despite dropping more than 60% from its peak in September of last year, Cardano has a lot to offer long-term investors looking to buy the dip. This network is one that’s currently on a mission to change the world. The hope is that Cardano’s ADA token will be able to create entirely new economies, and gain usage by large-scale organizations. Cardano has been working to build out its developer base and decentralized application ecosystem to make this a reality.
Perhaps the more intriguing element of Cardano, to me, is this network’s focus on the environment. Via the Cardano Forest Project, funded by the Cardano Foundation, more than a million trees have been planted, to help offset the carbon emissions generated by the network. The hope is to make Cardano a carbon-neutral (maybe carbon-negative) network, truly making the world a better place.
Lastly, adding to its potential is Cardano’s effort to solve its scalability issue. Unlike other Ethereum Killers, ADA has a slow transaction speed of 257 TPS. However, expectations are that the upcoming Hydra 0.2.0 update will help the Cardano network overcome these issues. This update should allow for transaction speed of up to 2 million transactions per second.
Launched in May 2020, Polkadot is a newcomer to the market compared to other Ethereum Killers. That said, this cryptocurrency did climb 278% in just one year. But unfortunately, like the broader crypto market, DOT is also down substantially from its peak in November.
Despite this, Polkadot attracts crypto enthusiasts with its innovation and solid reputation. Polkadot’s parachain protocol allows for blockchain interoperability and scaling in a way that generally blows out most of the competition. An Ethereum parachain (code for parallel blockchains), Polkadot essentially adds lanes (parachain) to the highway (the Ethereum network), to allow for faster transaction speeds and lower costs.
Now, the upcoming Ethereum 2.0 update could pour cold water on Polkadot’s growth. That’s one of the key reasons why this token is down considerably from its peak, like its peers.
However, Polkdaot’s transaction volumes, particularly linked to NFTs, have been soaring of late. Those bullish on the future growth of NFTs, and Polkadot’s role in this space, may like where this network is headed.
Top Cryptos at a 50% Discount: Polygon (MATIC)
Another layer-2 scaling solution, Polygon is another interesting option for long-term investors to consider. Many of the same catalysts are at play with Polygon as with Polkadot. However, Polygon is unique in that this network focuses on both Ethereum scaling, as well as infrastructure development.
Polygon similarly adds another layer on top of the Ethereum network, to solve for the gas fees and transaction time issues with Etheruem’s network. This efficient platform reportedly allows users access to the Ethereum network at an average transaction fee of $0.00004, compared to ETH’s fee of $134. That’s a substantial difference.
As Ethereum developers look for scaling options outside of the Ethereum network, investors in Polygon expect to continue to pick up market share. The race to own the DeFi world is on, and Polygon’s network is one that’s certainly gaining attention right now, for good reason.
Polygon’s recent dip from its 52-week high has been less than 35%. That’s a substantial dip, but a much less profound one than many of the token’s peers have seen. I think that’s mainly due to this network’s perceived value among investors right now.
Now the 20th-largest cryptocurrency by market capitalization, Litecoin is one of the “old guard” tokens that’s been around since nearly the beginning. This token surged to more than $400 apiece this past year, but has since settled down in the $135 range at the time of writing. Indeed, there’s been significant bearish sentiment behind this token of late, perhaps for good reason.
It seems to me that most crypto investors are interested in DeFi, Web3, NFTs, and other “use cases” in the crypto world. Most projects tied to these growth areas are related to Ethereum, Solana, or other layer-1 networks that support smart contract capabilities. Litecoin, on the other hand, is more akin to Bitcoin, as this token is viewed more as a true “currency” used for transactional purposes.
Making transactions on the blockchain is great. However, everyone’s doing it. Litecoin’s differentiating factors haven’t really shone of late.
That said, investors bullish on Bitcoin may want to look at Litecoin. This token’s network is approximately four times faster than BTC. It’s also much cheaper than Bitcoin on a per-transaction basis. Accordingly, those concerned about the impact congestion on large-scale networks like Bitcoin will have on this token’s future may want to look at the competition. In this regard, Litecoin is one of the largest options.
Top Cryptos at a 50% Discount: Axie Infinity (AXS)
Metaverse-themed cryptocurrency Axie Infinity has absolutely skyrocketed along with its metaverse-related peers over the past year. However, like its peers, Axie Infinity’s token price hasn’t been performing that well of late. Since hitting a high of more than $165 per token, AXS has since sunk to the $65 level at the time of writing.
This steep decline follows the rather broad de-risking we’ve seen in the overall crypto market. Many investors, still bullish on the metaverse, may simply have taken profits early, in the hopes of buying back at a cheaper price down the road. Well, Axie Infinity has indeed dipped. Those looking for a dip-buying opportunity now have it.
However, since the beginning of February, the AXS token has been on a roll. This token is up nearly 50% from its early-February low, as interest in the metaverse picks up once again.
I think the metaverse is an exciting place for investors looking for long-term growth. Accordingly, this is a top token on my watch list right now.
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.