The best argument for investing in the best cryptos now is that they are severely discounted.
The stock market has slumped sharply as the Fed continues to wage its battle against inflation by raising interest rates. That has resulted in the major indexes significantly dropping in value. For example, the S&P 500 is down approximately 21% in 2022, while the Nasdaq has slumped about 30%.
The crypto market’s losses have been worse than those of the stock market. In 2022, cryptos’ market capitalization has fallen more than 58%.
That relatively deeper discount means that crypto may rebound to a greater extent than stocks.
But the best cryptos to buy now should also be relatively safe in order to protect investors from excessive risk. So here are seven large-cap cryptos for you to consider.
Bitcoin (BTC-USD) has the strongest brand in the cryptocurrency space. While Bitcoin wasn’t the first cryptocurrency, it was the first to become popular among a significant percentage of the public . And the crypto has taken the baton and continues to run with it. It is now the most influential cryptocurrency and accounts for a large percentage of all the capital that is invested in cryptos.
In fact, Bitcoin accounts for $370 billion of the $920 billion of capital that is invested in cryptocurrency overall globally. As a result, all cryptos tend to move in tandem with Bitcoin.
In terms of utility, BTC relies on the belief that decentralization will continue to evolve. Meanwhile, companies are increasingly interested in BTC. That gives it a reasonable catalyst. And its supply is limited to 21 billion BTC. 19.2 billion of which have already been mined. The argument in favor of Bitcoin is simple and in investing, simple is often best.
Ethereum (ETH-USD) has had more trouble in 2022 than the crypto market overall, losing two-thirds of its value. So it is arguably a better investment than BTC because Ethereum’s huge loss makes it easier for the latter crypto to rebound sharply.
Another reason to believe that Ethereum could rise above its current levels is that it has finally merged. Specifically, it has transitioned from a proof-of-work consensus mechanism to a proof-of-stake voting mechanism.
That means Ethereum won’t any longer rely on the batteries of computers working in tandem to “mine” ETH by solving equations through their collective power. Mining requires a lot of electricity and has raised environmental concerns. Instead, ETH will now be created by providing randomly chosen bidders with the currency.
Early indications are that this process, known as staking, doesn’t reduce centralization, but it does reduce the crypto’s environmental impact. That matters in an era in which people vote for the environment with their money, meaning that the demand for ETH could increase as a result of the merge.
Those who invest in Cardano (ADA-USD) are betting that the soundness of its fundamentals will enable it to deliver impressive utility and growth over the long term.
The Cardano network is built on the Ouroburos blockchain protocol. Ouroburos was the first peer-reviewed, verifiably secure blockchain protocol, and Cardano was the first to implement it. That is why Cardano is often lauded for its evidence-based approach to blockchain development in particular and to cryptocurrency in general.
Cardano is focused on maintaining a decentralized approach to decision making. To understand it, look at Cardano’s FPs, or funding proposals, which are a good example of its methodology.
In order to enhance and develop the system, Cardano members propose funding methods which are then submitted and voted on through an app. Thus, the transparency of the overall project’s direction remains high. It is certainly much different than corporate boards that determine where funding will come from behind closed doors.
That said, Cardano has struggled in 2022. It has fallen below 40 cents after many pundits had long expected it to remain above $1 where it began the year.
Ripple (XRP-USD) is the company behind XRP, the cross-border payment crypto. Ripple is embroiled in an ongoing court case with the SEC. Fortunately for Ripple and the owners of XRP, it looks like Ripple will be vindicated sooner or later.
The latest news is that Ripple now has what is known as the Hinman documents in its hands. Getting them wasn’t easy. It required six court orders filed over a period of 18 months before Ripple’s attorneys could take possession of the documents.
The Hinman docs, named after former SEC division director Wiliam Hinman, contain transcripts of a 2018 speech he made about Ethereum and its status as a security. He stated that he believed Ethereum was not a security. Most pundits believe that the same argument applies to XRP. But the SEC is taking the opposite position.
Now that XRP has the documents, the court battle is likely to be over relatively soon. That’s because the SEC’s arguments that XRP was a security are contradicted by its former director’s comments made in 2018.
Once a judgment is made in favor of XRP in court, its price is likely to rise meaningfully.
For investors, Solana (SOL-USD) is a good crypto to pair with ETH.
Solana’s transaction fees are much cheaper than those of Ethereum. The cost to finalize a transaction using Ethereum is 9 cents compared to Solana whose transactions cost fractions of a ten-thousandth of a cent.
Then there’s the speed of transaction argument. Solana can finalize 3,400 transactions per second, while Ethereum can only finalize 15. So the argument in favor of Solana for anyone undertaking a large number of transactions is clear.
That said, Ethereum is a strong choice, and holding both cryptos isn’t contradictory. Both remain strong contenders, and neither has invalidated the other in the competition for crypto supremacy.
Tether (USDT-USD) is the first and best-known stablecoin in the world. It is designed to maintain the same value as the U.S. dollar i.e. permanently trade in a 1-to-1 ratio with the dollar.
Tether and other stablecoins increase the amount of liquidity in the cryptocurrency market. They do that by increasing the ease with which cryptocurrency can be exchanged for stablecoins that are pegged to the dollar.
So Tether makes it easier for investors to buy multiple types of cryptos. But that doesn’t help Tether’s investors make profits.
However, there’s another important aspect of Tether that investors shouldn’t ignore. Specifically, Tether can be used to make loans that produce yields of between 3% and 20%. In essence, risk-tolerant investors could lend out funds as Tether in order to receive a relatively high return.
Binance (BNB-USD) is the largest global cryptocurrency exchange by volume. It is a network of blockchain networks that is seeking to become the infrastructure services provider for the entire blockchain ecosystem.
One of the more interesting aspects of BNB for investors is the fact that the company takes a portion of BNB transactions and burns them on a regular basis. That decreases the supply of BNB, theoretically increasing its value.
However, the real benefit of Binance is its position as the largest cryptocurrency exchange. The bigger crypto becomes, the higher the volume of business transacted through the network. That, in turn, leads to ever-growing fees for the company.
In short, Binance is going to continue to grow and increase its fee base, thereby raising BNB’s value.
On the date of publication, Alex Sirois 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.