In terms of investor adoption, the success of the cryptocurrency sector has been simply amazing. Indeed, many explosive cryptos have provided equally-explosive returns in recent years. This has led to impressive investor interest in a sector that was little-known only a few years ago.
As per a survey by GOBankingRates featuring 1,037 investors, more than 40% of respondents who purchased cryptocurrency said they have 11% or more of their investments in this space. Around 22% stated that they want to use cryptocurrency to diversify their portfolio, and 12% want to own crypto for retirement.
The crypto sector has been declining for some time now. Rising interest rates and other factors affecting stocks have hit these tokens hard. And while it appears some stabilization is happening, it’s unclear where the exact bottom is for this sector.
That said, there are thousands of cryptocurrencies out there. And while investors watch the likes of Terra (LUNA-USD) implode and headlines about potential contagion proliferate, these lower token prices could set the stage for explosive upside for current projects.
Finding which projects could provide such returns — that’s the tricky part.
Top Explosive Cryptos: Polkadot (DOT)
Polkadot allows cross-blockchain transfers of any kind of asset or data. In fact, it is the first scalable blockchain platform, and aims to connect independent blockchains via parachain networks. Polkadot hopes to achieve high degrees of scalability and security by uniting multiple blockchains.
DOT is the governance token for this protocol and has delivered excellent returns in the past. I’m of the belief that another face-ripping rally could take place should the market rebound. That’s mainly because of the robust ecosystem of dApps Polkadot supports. As investors look for real-world utility in this sector, projects like Polkadot will continue to become more valuable. At least, that’s the long-term thesis underpinning such an investment.
Interestingly, there is some recent news driving interest in Polkadot as well. One of the leading DeFi protocols on Polkadot, Acala, has made a move to support the launch of stable coins on Polkadot. Along with several supporting venture funds and nine Polkadot parachain teams, Acala has launched an aUSD Ecosystem Fund of $250 million to support early-stage startups developing applications with solid stablecoin use cases on any Kusama or Polkadot parachain.
I think this catalyst could be big — over time. For now, investors will need to be patient. But that goes for any long-term investment in this volatile sector.
Cardano has grown to one of the top cryptos, sporting a market cap of $14.7 billion. That’s a long way from 2017, when ADA was only a whitepaper.
Cardano is a top-notch blockchain platform that combines new technologies to provide users with superb levels of sustainability and security. It makes use of peer-reviewed research and has developed one of the market’s top Proof-of-Stake (PoS) algorithms.
Recently Cardano (ADA-USD) has seen solid rallies, which have since petered out. That said, there are some key catalysts worth noting investors should insider.
Notably, the launch of Lagan’s cross-chain bridge has resulted in a surge of DeFi activity on the Layer-1 blockchain. This growth in developer interest in Cardano could be a key long-term driver investors want to consider. As more integrations and upgrades come to this network, Cardano looks like a must-buy crypto in this environment.
XRP’s parent company, Ripple, has also come a long way in developing its technology. This company makes use of the world’s seventh-largest crypto, XRP, to facilitate cross-border payments. Effectively, fiat is converted to XRP, which reduces casts and increases transaction speed. Then, XRP gets converted back to fiat. Relative to the existing traditional banking infrastructure, there are some real advantages here for corporations and institutional investors engaging in such money transfers on a regular basis.
Additionally, there are many more uses for XRP worth noting. This token is used to pay transaction fees on the network, reward developers, and provide other benefits leading to ecosystem growth. Over the long-term, these tokenomics provide an easy-to-understand thesis for holding XRP long-term.
Recently, Brad Garlinghouse, CEO of Ripple, told CNBC that the cryptocurrency would launch an IPO shortly. He stated that Ripple would look forward to exploring the possibility of an IPO once its SEC lawsuit ends. Of course, a positive resolution is something the company and investors are looking for. In such a scenario, this IPO could be of massive interest to investors looking for additional exposure to XRP.
Right now, XRP is a token I’m watching. It’s probably too risky, given the headwinds tied to litigation. However, should everything get sorted, there’s a lot to like about this project’s trajectory long-term.
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.