For regular InvestorPlace readers, I may seem like an odd choice to write about the best cryptos to buy. One of my concerns about cryptocurrency in general is that we don’t know how it will perform in a market correction and/or a bear market.
The conventional wisdom about cryptocurrency was that it would behave differently than the broader market. So far that hasn’t been the case. Investors have deemed cryptocurrencies to be risk-on assets at a time when there’s a flight towards risk-off assets.
But we can all agree there’s nothing that’s conventional about what’s going on in the financial markets. All the reasons for the popularity of cryptocurrency still exist. Inflation remains high. Geopolitical tensions are rising. And the growth of non-fungible tokens (NFTs) shows no sign of abating.
All of this means that this “crypto winter” will be coming to an end at some point. However, forecasting the exact moment that cryptos will turn around is an imperfect science. Nevertheless, here are my picks for the best cryptos to buy on this market dip:
- Ethereum (CCC:ETH-USD)
- Decentraland (CCC:MANA-USD)
- Cardano (CCC:ADA-USD)
- Axie Infinity (CCC:AXS-USD)
- Polygon (CCC:MATIC-USD)
- Tezos (CCC:XTZ-USD)
- Dogecoin (CCC:DOGE-USD)
Cryptos to Buy: Ethereum (ETH)
My first pick of the best cryptos to buy is Ethereum. A tried-and-true bit of investment advice is to skate where the puck is moving. In this case, if investors are looking to where the market is going for crypto, one area to consider is the “creator economy.” And a huge part of that economy is derived from non-fungible tokens (NFTs).
The money spent on NFTs went from an already impressive $100 million in 2020 to $22 billion in 2021. And when Forbes was reporting on its biggest trends for 2022 in the creator economy, it interviewed David Lawee, founder and general partner at CapitalG who called NFTs “the single greatest technological development for creators since the advent of the Internet.” And in 2022, Lawee predicts the market for NFTs will grow by 1,000%.
Even with other competitors constantly entering this space, the Ethereum blockchain is the unquestioned market share leader with approximately 80% of the transaction volume. And if, as expected, Ethereum 2.0 launches this year, that will be another reason for investors to anticipate the price of the ETH token to rise.
As I just mentioned, Ethereum has a significant percentage of market share as it relates to NFTs. A good example of this comes from Decentraland, a metaverse play with its own native token MANA. The primary use case for MANA is to buy virtual real estate that comes in the form of an NFT. And where do these digital assets exist? On the Ethereum blockchain, of course. This means transaction fees are paid in ETH.
However, if you believe in the future of the metaverse, you’ll want to take a close look at Decentraland. Yes, you have to get around the fact that virtual real estate has no intrinsic value. But right now, that’s not really an issue, because individuals are using virtual currency to pay for virtual representations of things they would buy in real life.
And in a recent article about MANA, I theorized that because it’s conducting transactions in the virtual world, Decentraland may be able to stay one step ahead of regulators who are seeking to regulate cryptocurrency.
Cryptos to Buy: Cardano (ADA)
The bullish case behind Cardano has always been based on the anticipation of what the network is likely to be. That’s because Cardano has not officially launched. The blockchain recently launched the third out of five phases. Critics would argue that the build-out of the Cardano network is taking too long. However, it’s likely to work to the token’s advantage.
My reasoning is that as cryptocurrency goes mainstream, it’s going to attract mainstream investors. And those investors will be attracted to networks that will have staying power. With its measure twice, cut once approach, Cardano fits that bill. And as the network continues to evolve, there will continue to be interest from developers.
All of that should support a price increase in ADA. But there’s still more to like.
A second catalyst for ADA is likely to come from its ability to get involved in the NFT marketplace. This became a reality when SundaeSwap launched on the network in late January.
Axie Infinity (AXS)
Among the best cryptos to buy, I’ll admit to not being familiar with Axie Infinity until I did some research for this article. However, if you believe that NFTs will continue to be a driver for growth in the crypto market, AXS is a token to consider.
Axie Infinity is an Ethereum-based, “play-to-earn” game that is powered by the AXS token as well as the Smooth Love Potion (SLP) token. InvestorPlace contributor Tezcan Gecgil describes the bullish argument in a recent article:
“The leading NFT-based crypto game allows players to collect, breed, and compete with digital pets, named ‘Axies,’ and build their land. While each Axie is developed as an NFT, the market price for an AXS-USD depends on the rarity of its features.”
Obviously, your belief in the AXS token will depend on your belief that Axie Infinity will remain popular with cryptocurrency enthusiasts. If it does, then demand for the token is likely to be one of the best cryptos to buy in 2022.
Cryptos to Buy: Polygon (MATIC)
Polygon has become one of the more popular blockchains for developers and app users. It’s also become one of the leading NFT platforms for crypto investors. The combination of popularity and a roster of high-profile NFT projects made MATIC, the token of the Polygon network, one of the superstars of 2021.
The high-profile NFT projects referenced above have well-known sponsors including Adidas (OTCMKTS:ADDYY) and DraftKings (NASDAQ:DKNG). Bullish investors in MATIC will be counting on the idea that the focus of NFT projects will likely shift to brand-sponsored projects.
However, none of this prevented Polygon from being caught up in the sell-off that impacted the rest of the cryptocurrency market. As of this writing, the token is down 24% from the all-time high it reached in late December.
MATIC is currently in the top 20 of cryptocurrencies based on market capitalization. As of this writing, it sits directly behind Shiba Inu (CCC:SHIB-USD).
Cryptocurrencies will never be entirely green. However, perception is reality. Doja Cat launched her NFT collections on OneOf, a platform on the Tezos protocol. Her reasoning was the “green effect” of NFT minting on the platform.
Tezos is a delegated proof-of-stake (dPoS) consensus algorithm. This makes it faster than Bitcoin (CCC:BTC-USD) and Ethereum. And it’s one of many networks that are trying to lay claim to the term “Ethereum killer.” The bullish argument for Tezos focuses on the idea that it’s a self-editing network. It will be able to evolve without the need for hard forks.
However, after initially charging as high as $12 after its initial launch in 2018, XTZ has never been close to recapturing those levels. That’s the problem with trying to compete with Ethereum. Right now, XTZ is on a roll. The question will be if it can maintain that momentum.
Cryptos to Buy: Dogecoin (DOGE)
Last on my list of best cryptos to buy is Dogecoin. I never thought that would be a sentiment I held about the pup coin. It started as a joke and was one of the cryptos to get caught up in the meme token craze. In the past, I have discouraged investors from buying Dogecoin. In fact, I’ve likened it to a token you would earn at Chuck E. Cheese. And DOGE is down nearly 80% from its high.
But my feeling about DOGE is changing a little bit. The altcoin is certainly taking the hard road. One of the arguments against cryptocurrency is that it will have a difficult time becoming a widespread medium of exchange. However, DOGE seems to embrace that and is finding success with microtransactions. For fun and for charity, Dogecoin is starting to get a firm foothold that has many crypto enthusiasts excited about its prospects.
And with enthusiasts like Elon Musk on its side, Dogecoin is likely to maintain its large community. And that community may have a larger say in the governance of DOGE when it transitions to a proof-of-stake system.
On the date of publication, Chris Markoch 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 Markoch is a freelance financial copywriter who has been covering the market for eight years. He has been writing for InvestorPlace since 2019.