With the crash in cryptocurrencies, investor confidence in the asset class also seems to have plunged. The same investors who were betting big on Bitcoin (BTC-USD) at all-time highs are wary of buying Bitcoin at $23,000. I would, however, look at fundamentally strong cryptos to buy in the current bear market.
The first reason is exposure to a new technology. An interesting column argues that crypto is following the internet adoption curve. There will be hurdles along the way. However, with wider adoption of blockchain technology, crypto will survive.
Regulatory headwinds have also impacted the outlook for cryptocurrencies. However, Kevin Werbach, a professor at the Wharton School of the University of Pennsylvania, has the following opinion: “At some level, though, this is similar to the debate we had 20-plus years ago about the internet. The internet is also global, it’s also decentralized.”
Werbach believes that similar to the internet being gradually regulated, cryptos will be regulated in the coming years.
Amidst these optimistic views, I must add that 70% to 80% of crypto projects are unlikely survive in the next few years. It’s therefore important to be very selective in creating a list of cryptos to buy. Here are three cryptos that are likely to reverse after the bear market and create long-term value.
Bitcoin (BTC-USD) is the top name among cryptos to buy for investors who are bullish for the long term. The cryptocurrency currently trades 65% below all-time highs of November 2021. It’s unlikely that Bitcoin will surge higher anytime soon. However, it does seem that the correction is largely over.
In June 2022, a Blockware report indicated that Bitcoin adoption can hit 10% by 2030. If this holds true, Bitcoin will remain in a long-term uptrend.
It’s also worth noting that around 100 central banks are already exploring the idea of digital currency. Blockchain technology is therefore positioned to gain traction. At most, it’s likely that Bitcoin and other cryptocurrencies face regulations.
Contractionary monetary policy is another reason for the sharp correction in Bitcoin. With fears of a global recession, a pause in rate hikes or expansionary monetary policies might be in the cards. With easy money in the financial system, there is a case for renewed fund allocation to cryptocurrencies.
Nervos Network (CKB-USD)
Another project that’s worth considering is Nervos Network (CKB-USD). I believe that CKB is positioned for multi-fold returns in the next few years.
Nervos had a period of rather slow ecosystem growth after the mainnet launch in 2019. However, the PoW-based multilayer-network and smart contract platform stands at the precipice of a Cambrian explosion today.
Nervos has recently undergone its first successful hard fork and launched its own EVM-compatible layer 2. The project has also established a partnership with BuildClub – a project incubator and web 3.0 builder hub. Axon, a high-performance sidechain tailored for Game-Fi projects, is scheduled to launch later this year.
With support for Ethereum, Tron (TRX-USD) and Polygon, users can access their domain from any wallet of their choice. Notably, development studio Tempest Labs is building the first provably secure and autonomous DeFi protocol on Nervos. Further, tools are being built to help others harness the unique power and interoperability of Nervos Network.
Overall, Nervos seems like a hidden gem among cryptos to buy. With sustained developments on the back-end, the surge in CKB might just be a matter of time.
In terms of price action, Polygon (MATIC-USD) has already surged from July 2022 lows of 54 cents. MATIC currently trades 70% higher from those lows at 92 cents. I believe that the rally is likely to sustain.
As an overview, Polygon can be considered a good replacement for Ethereum (ETH-USD). In particular, it offers a greater number of transactions at a lower cost.
As a matter of fact, Polygon has recently tapped into zero-knowledge technologies, a cryptographic breakthrough. This will further provide the project with a scalability advantage as compared to Ethereum.
It’s worth noting that in February 2022, Polygon raised $450 million from investors that include Sequoia Capital India and SoftBank Vision Fund 2. The big funding round underscores the view that the project is attractive for the long term.
These funds will be utilized to build scaling solutions that include Polygon PoS, Polygon Edge and Polygon Avail. With the best part of web 3.0 growth still to come, Polygon has a bright outlook.
On the date of publication, Faisal Humayun did not hold (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.