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3 Cryptos to Buy on the Dip

  • When you're looking for the best cryptos to buy now, start with these stalwart coins.
  • Ethereum (ETH-USD): The second largest cryptocurrency is about to undergo a change that could be a major catalyst.
  • Litecoin (LTC-USD): One of the original altcoins, LTC is gaining in popularity and acceptance.
  • Bitcoin (BTC-USD): On an upswing since early July, reports of Bitcoin's demise appear to have been greatly exaggerated.

While certainly down, cryptocurrencies are not out. In fact, there are plenty of cryptos to buy that have stability on their side.

Though prices of digital assets have dropped across the board this year, the long-term outlook for leading digital coins and tokens remains hopeful. Investors looking for the best cryptos to buy should remember that this is not the first rodeo for the coins.

Long-term crypto investors have seen this movie before — many times. The price of Bitcoin (BTC-USD), the biggest cryptocurrency by market capitalization, previously crashed in 2018, 2020 and the summer of 2021 before rebounding to test new highs each time.

Chris Dixon, a prominent crypto investor at venture capital firm Andreessen Horowitz, recently wrote in his 2022 “State of Crypto” report that investors should “pay no attention to Mr. Market” as the current churn in the sector is part of a “price innovation cycle” and that cryptocurrencies will rise in due course.

Other analysts and investors say we’re currently experiencing a washout of the more speculative and least trustworthy cryptocurrency firms and assets. The hope is that the clearing out will pave the way for stable, legitimate digital coins and tokens to survive and thrive into the future.

With that in mind, here are three cryptos to buy on the dip as prices remain depressed.

ETH-USD Ethereum $1689.62
LTC-USD Litecoin $58.87
BTC-USD Bitcoin $23,083.02

Ethereum (ETH)

A concept image of mining an Ethereum (ETH) token.
Source: Shutterstock

Arguably the cryptocurrency with the most utility or practical application, Ethereum (ETH-USD) is the second largest digital token by market cap and currently trades at around $1,689.

While ETH is down 52% year to date, its price has rebounded sharply since late June and risen 47% in the past month.

Ethereum, whose underlying blockchain facilitates smart contracts and decentralized finance, is about to undergo a major change that could prove to be a significant catalyst for its price. Known as the “merge,” Ethereum is in the process of moving from an energy-intensive proof-of-work protocol to a more environmentally friendly proof-of-stake operating model.

That switch, which could happen as soon as September, is expected to not only be a huge development for ETH, but the entire cryptocurrency market. Given that one of the biggest knocks on cryptocurrencies is that mining for the digital coins and tokens uses a huge amount of power, a change to a less energy-intensive protocol has positive implications for the entire sector.

Currently, Bitcoin operates on the same proof-of-work model as Ethereum, but could also make a change should the ETH merge prove successful. Beyond this potential catalyst, Ethereum is also widely seen as a key building block in decentralized finance that enables people to move money around without the need for an intermediary such as a bank or other financial institution.

Litecoin (LTC)

Image of one litecoin in front of many stacks of litecoins
Source: Wit Olszewski / Shutterstock.com

Developed in 2011 and known as an “altcoin,” Litecoin (LTC-USD) is similar to Bitcoin but with a slightly altered codebase that enables it to be mined quicker, processed faster and offer lower transaction fees than BTC.

The improvements found in Litecoin recommends it as one of the best cryptos to buy now. Along with the fact that it is one of the oldest and most trusted altcoins, it has steadily grown over the years. LTC has been hit hard this year, and its price is currently down 60% since January.

However, it too has rebounded over the past month and climbed nearly 25% higher since the start of July. At its peak in May 2021, LTC was trading at nearly $350.

From a practical standpoint, Litecoin is currently accepted by more than 3,000 merchants worldwide, according to data from Cryptwerk.com. LTC is accepted as a legitimate form of currency at nearly 100 payment gateways, including fintech giant PayPal (NASDAQ:PYPL).

The number of organizations that recognize and accept Litecoin has been steadily growing in recent years. While its popularity is undeniable, Litecoin remains closely tied to Bitcoin due to the similarities between the two cryptocurrencies.

In fact, Litecoin is often referred to as the “silver to Bitcoin’s gold.” As such, LTC’s price tends to move in tandem with BTC. Like Bitcoin, Litecoin continues to operate on a power-heavy proof-of-work protocol.

Bitcoin (BTC)

A blue-toned concept image showing Bitcoin (BTC) cracking in half.
Source: Shutterstock

Still the biggest cryptocurrency by market cap, and easily one of the best cryptos to buy, Bitcoin is currently trading right around $23,000.

It now looks as though BTC bottomed around $18,000 in June and has been recovering ever since. While Bitcoin remains below its all-time high of $68,000 reached last November, many investors are taking comfort from the fact that the bleeding in BTC appears to have stopped, at least for now.

There were many investors and analysts predicting that Bitcoin’s price would fall below $10,000 as recently as early July of this year.

As the original cryptocurrency, Bitcoin remains the most widely used and accepted digital token. Today, more than 15,000 businesses worldwide accept BTC as a legitimate form of payment, including major U.S. companies such as Microsoft (NASDAQ:MSFT), Starbucks (NASDAQ:SBUX) and AMC (NYSE:AMC) movie theaters.

Bitcoin continues to get criticized for its volatile price swings and its energy usage, which is bad for the environment. However, as stated at the outset, investors should remember that BTC has been here before.

Last year, the price of Bitcoin fell all the way down to $35,500 from $61,250 before rebounding to test new all-time highs in the autumn. Now it looks like Bitcoin is again on the rebound, proving once again that investors should never count out the digital token.

On the date of publication, Joel Baglole held a long position in MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/cryptos-to-buy-on-the-dip/.

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