Like everyone, I’m trying to navigate the extraordinary difficulties that will ripple across the world from Russia’s extraordinarily dangerous decision to invade Ukraine. First and foremost, the loss of innocent human life is completely unacceptable. Second, this radical move will likely cause unpredictable market rumblings, from stocks to bonds and even cryptos.
However, the blockchain is an intriguing sector in that while it faces the same threat of eroding sentiment like other investment categories, it may also benefit from the unique conditions that the conflict has sparked. As decentralized assets, cryptos operate outside the global fiat currency system. Of course, that would come in handy if say your country found itself removed from the SWIFT payments network.
It’s not a radical concept that cryptos could empower a new way forward when it comes to economic dynamics. Just prior to the invasion, the New York Times issued a warning that the Russian government could use digital rubles to mitigate the impact of sanctions and other financial penalties. That the Russians seemingly planned this “escape route” should worry U.S. officials, who appear flatfooted.
For right now, it appears that the sanctions are having their effect. With individual Russian citizens — many of whom, maybe most of whom do not support the war — rushing to ATMs to pull out their cash, the ruble risks hyperinflation without serious government action. In turn, astute people turned to cryptos to protect their wealth — and why not? Holding rubles will likely lead to disaster.
Though incredibly cynical, it’s possible that the economic fallout from the Russian invasion created a lightbulb moment in favor of the virtual currency sector. People can’t trust their governments, but they may be able to trust decentralized protocols. In that spirit, here are some interesting cryptos you may consider buying on any dips.
- Bitcoin (BTC-USD)
- Chainlink (LINK-USD)
- USD Coin (USDC-USD)
- Aave (AAVE-USD)
- Fantom (FTM-USD)
- Kadena (KDA-USD)
- Secret (SCRT-USD)
While digital assets suddenly became enticing, it’s important to acknowledge that cryptos are supremely wild. You can be rich one day, poor the next. Therefore, please exercise strict money management and conduct your own due diligence before proceeding.
Promising Cryptos: Bitcoin (BTC-USD)
If any compelling dip materializes with cryptos, your first idea under the present circumstances should really be Bitcoin. Yes, it’s a hackneyed concept, especially when there are close to 18,000 cryptos available. Should interest rise for blockchain-based assets, the smaller, lesser-known fare may jump exponentially higher.
But if you believe the panic the Russian invasion caused merits consideration for cryptos, then Bitcoin would likely be the most reliable beneficiary. About 17.3 million Russians invest in virtual currencies, which represents roughly 12% of the population. Those folks might consider various altcoins but what about the rest of them?
In a panicked state, I think it’s reasonable that those who are not familiar with cryptos would rather go with a brand that they know. That would be Bitcoin, which has become synonymous with virtual currencies themselves. Thus, while many other coins and tokens feature greater upside potential, BTC-USD is the one you can trust during a crisis.
While Bitcoin may have introduced the concept of a decentralized and in some ways self-intelligent peer-to-peer (P2P) payment system, many computer programming developers realized that the underlying blockchain could be used to foster far greater innovations than borderless transactions. Today, the newer cryptos are tied to advanced architectures that facilitate immense utility.
Chainlink is but one of many examples which is designed to take smart contracts to the next level. As you might imagine, the ability to decentralize P2P payments means that other business functions could also be decentralized. For example, two people — without meeting each other — could play a game of chance, with the immutable blockchain acting as a perfect arbiter.
However, such smart contracts entails that the triggering elements of the underlying agreement are accessible within the blockchain. But what if a contract triggered by off-chain events? That’s where Chainlink comes in, enabling smart contracts to accommodate data and events in the real world.
It’s a fascinating concept, one that deserves consideration for dip-buying ventures.
Promising Cryptos: USD Coin (USDC-USD)
In almost any other circumstance, mentioning USD Coin would be a cop out in terms of a discussion regarding cryptos to consider buying on the dip. As you know, USDC is a stablecoin, a class of cryptos that are pegged to the dollar. So, you are right to object and say, what dip? Whether the sector rises or falls, USDC will (in theory — let’s keep this discussion simple) always be worth $1.
But under the context of the Russian attack, USD Coin is absolutely something to consider, especially if you’re Russian. Rather than pivoting your paper wealth to relatively reliable cryptos like Bitcoin, even BTC-USD is known for extreme bullish and bearish cycles. However, USDC will stay stable throughout sector volatility, making it an intriguing crisis asset.
Better yet, several platforms allow you to earn interest on USD Coin and similar stablecoins. And we’re not talking about earning 1% after 50 years or something miniscule like that. Instead, you can possibly earn double-digit interest paid out monthly.
The catch? Stablecoins have to be backed by something. If they’re not, watch out.
Speaking of interest rates, cryptos aren’t just about banking on capital returns. Don’t get me wrong — in the early days of Bitcoin, that was what it was all about. But today, virtual currency investors demand more from the wider blockchain community. The sector is shooting toward a self-sustaining ecosystem, which brings up Aave.
A decentralized finance (DeFi) protocol, Aave is a platform that facilitates the lending and borrowing of cryptos. According to Coinmarketcap, “Lenders earn interest by depositing digital assets into specially created liquidity pools. Borrowers can then use their crypto as collateral to take out a flash loan using this liquidity.”
To be sure, the entire concept — not just Aave specifically — requires both mass participation and a framework of centralized stability. By that, I simply mean that if missiles blew up all internet infrastructure, your interest payments aren’t going to mean much.
But assuming that such a horrific circumstance doesn’t pan out, Aave represents one of the fascinating evolutions of the blockchain: people from all corners of the world can gather together to do business as they please.
Promising Cryptos: Fantom (FTM-USD)
From the perspective of technical analysis, it appears that Fantom and Bitcoin share similar chart patterns. Of course, correlation doesn’t equate to causation. However, given that they’re both cryptos and subject to the same baseline sentiment, it may stand to reason that if you believe in BTC-USD you might give a look at FTM-USD.
If anything, Fantom is much cheaper, trading at a quarter under two bucks at time of writing.
An open-source smart contract platform geared for decentralized applications (DApps) and digital assets, Fantom seeks to improve the three core attributes of blockchain-based networks: scalability, security and decentralization. Given that network transaction fees in legacy platforms have become onerous in recent years, projects like Fantom facilitate tremendous utility but at a reasonable cost.
As well, Fantom is experimenting with a “new scratch-built consensus mechanism to facilitate DeFi and related services on the basis of smart contracts,” per Coinmarketcap. Deploying higher speeds and greater security, FTM-USD could set a new benchmark for DApps.
One of the concerns I have about jumping into popular cryptos is that their price levels are still significantly elevated compared to historical norms. While Kadena is exponentially higher from its lows, KDA-USD has given up a significant amount of valuation since trading above $20 during its peak. At the moment, it’s trading at a little under $7.
Another factor that’s intriguing is that since early September of last year, Kadena has generally been charting a series of higher lows. As well, a possibility exists that between mid-October 2021 and now, KDA is printing a bullish pennant formation, implying much greater upside. I’m not guaranteeing anything — I’m just throwing it out there.
On the fundamental side, Kadena brings plenty of substance to the table. Marketing the facilitation of safer smart contracts, the underlying network automatically detects bugs and other vulnerabilities. In addition, Kadena features no-cost transactions. As it states on its website, the elimination of fees removes a key barrier to mass adoption of DApps.
Promising Cryptos: Secret (SCRT-USD)
Well before the world turned upside down, the dirty little secret regarding cryptos was that they weren’t entirely discreet. If that were the case, federal law enforcement authorities would not have recovered the Bitcoin that the perpetrators of the Colonial Pipeline cyberattack demanded as ransom. Many other incidents revealed that crypto users weren’t as insulated from oversight as they initially thought.
However, such exposes cynically bolster the investment narrative of truly discreet cryptos like the appropriately named Secret. According to Coinmarketcap, the coin undergirds the Secret Network, a blockchain that allows users to “build and use applications that are both permissionless and privacy-preserving.”
While decentralized platforms generally promote inclusivity:
…current blockchains are public by default, exposing all data to everyone and putting users at risk. In order to enable meaningful use cases and achieve global adoption, users and organizations need control over how their data is used and shared – a concept referred to as ‘programmable privacy.’
The key to Secret is that it facilitates “computational privacy, not just transactional privacy.” That could get interesting in this day and age.
On Low-Capitalization and Low-Volume Cryptocurrencies: InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day. That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators. When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: How to Avoid Popular Cryptocurrency Scams
On the date of publication, Josh Enomoto held a LONG position in BTC, LINK and USDC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.