- Ethereum (ETH-USD): Boasts the largest set of use-cases in the sector.
- Terra (LUNA-USD): Offers a suite of stablecoins which is driving demand for the platform at a rapid pace.
- Ripple (XRP-USD): An interesting short-term play tied to the developments in its case with the SEC.
It’s been mostly carnage with the cryptocurrency market this year. A concoction of headwinds has obliterated the market, which has wiped out billions in valuation. The industry benchmark, Bitcoin (BTC-USD), has lost 25% of its value since the start of the year. In the same period last year, BTC-USD gained over 70%.
Still, the narrative surrounding the cryptos is largely positive. The step-changes in the sector are permanent, and the industry will continue evolving at a rigorous pace. Smart money investors are banking on the sector to continue going from strength to strength.
According to Allied Market Research, the global crypto market, valued at $1.49 billion a couple of years ago, is now expected to reach $4.94 billion by 2030. This represents a massive 12.8% growth from last year to 2030. However, not all cryptos are created equal; therefore, it’s imperative to pick those which offer real-world utility.
Ethereum (ETH-USD) is the second-biggest cryptocurrency in terms of market valuation behind Bitcoin. The decentralized open-source technology boasts a laundry list of use-cases and supports everything from non-fungible tokens (NFTs) to decentralized finance (DeFi) applications. ETH-USD has receded along with the rest of the sector, but its long-term bull case remains intact.
Much of the talk about Ethereum’s long-term case is based on its transition to a proof-of-stake model (POS). The POS model will alter how transactions are verified on the blockchain, making it far more efficient and affordable for its users. Once the upgrade is complete, it could handle up to a whopping 100,000 transactions per second. To put things in context, Visa (NYSE:V) can process 24,000 transactions per second. The upgrade is expected to be complete by next year, and if it’s rolled out smoothly, Ether will gain immensely.
For the past year, Ethereum’s dominance in the DeFi realm has been challenged by new players. However, it still occupies over 50% of all total value locked within various DeFi protocols. Moreover, the addition of new features will further expand its market share across multiple blockchain technologies.
Terra (LUNA-USD) is one of the crypto platforms that has exploded in the past couple of years. LUNA-USD is the native token of the Terra digital ecosystem, growing in popularity for its stable coin support. There are over 3 million Terra wallet addresses, which represents more than a 300% growth since 2020. Particularly in South Korea, the crypto platform has gained immense traction in day-to-day use.
Terra features several stablecoins, the most popular being TerraUSD (UST-USD) and other coins based on fiat currencies such as the South Korean Won. TerraUSD is now worth over $10 billion, making it one of the largest stablecoins globally. Furthermore, Terraform Labs, the creators behind Terra, raised over $1 billion to buy Bitcoin (BTC-USD). It will help protect Terra from the downside risks of outlier events. Therefore, LUNA-USD could potentially offer robust growth in May and the coming months.
Ripple (XRP-USD) is one of the few cryptos that failed to take advantage of pandemic-induced tailwinds. The payment protocol’s cryptocurrency called XRP has been weighed down by concerns surrounding the Securities and Exchange Commission (SEC) lawsuit alleging the unlawful sale of unregistered securities. However, the developments in the case have so far been in XRP’s favor and point to a potential snapback. Its CEO Brad Garlinghouse recently stated that the lawsuit is going well for XRP though the process is moving slowly.
Ripple executives feel that XRP could be “the first viable alternative to correspondent banking.” It verifies transactions through a consensus protocol, which means that a sizeable chunk of validators needs to review transactions before accepting them. Due to the protocol’s robustness, the payment protocol can process transactions with minimal energy and at remarkably low costs. This makes it one of the most environmentally friendly cryptos. With more positive developments in the case, XRP-USD’s price could be an interesting short-term play.