While crypto winter may still be raging on, the start of 2023 has provided quite the respite for many top cryptos. Of course, not all cryptos have performed the same. There are over 21,000 digital currencies in existence. Thus, there’s plenty of room for divergence among quality projects and, shall we say, more speculative ones.
That said, for long-term investors looking to build a growth portfolio, allocating a small percentage toward crypto has proven to be a solid investment over the past decade. And while there are many options to choose from today, many of the highest market cap cryptos are where I think it’s best to focus.
That’s because these projects are more established, provide some historical perspective on the sector, and have shown staying power. We’ve all seen that certain cryptos can implode, almost overnight. The longer a crypto is around, the greater the probability investors won’t be burned holding said token for an elongated period of time.
For those looking to buy while crypto winter rages on, here are three projects I think are worth a look at right now.
Despite the massive declines seen across the crypto sector, Bitcoin (BTC-USD) actually remains a relative out-performer in 2022, losing “only” 60% of its value over the past year.
That’s still a decline that hurts, and this is a cryptocurrency that’s feeling the sting of the crypto winter as much as any other project. However, this is also the oldest and most established cryptocurrency, with a price chart that goes back a full 13 years. Thus, for those looking for a battle-tested digital asset that’s gone through some cycles, Bitcoin is really the only option.
Bitcoin undoubtedly lacks the utility of conventional currency, but that doesn’t imply it won’t be valuable in the future. The conventional financial markets have embraced Bitcoin perhaps the quickest out of all the digital currencies that make up the crypto market. This is demonstrated by the rise in Bitcoin exchange-traded funds (ETFs) and derivatives products.
Furthermore, a Deloitte analysis from late 2020 indicated that over 2,300 U.S. firms accepted BTC as payment. Surely, this figure has increased since then. Bitcoin continues to be one of the best cryptocurrencies to invest in currently due to its popularity and dependability. I don’t see that changing any time soon.
Those thinking truly long-term may want to consider Bitcoin first, above all other projects.
The preferred blockchain network of choice for most developers, Ethereum (ETH-USD) remains what I call the “lifeblood” of everything useful in this sector. The first blockchain to utilize smart contracts, Ethereum provides developers with perhaps the best platform to build decentralized applications (or dapps).
By eliminating the middleman from some transactions, these smart contracts completely decentralize the user experience. By some counts, Ethereum is the hottest cryptocurrency to buy right now, due in part to this network’s recent Merge upgrade, bringing about “Ethereum 2.0.” With a Shanghai upgrade set for some time in March, there’s more to look forward to. This upgrade will allow those staking Ether to unstake their ETH, should they wish.
As far as cryptocurrencies with short-, medium- and long-term catalysts are concerned, Ethereum deserves consideration this crypto winter.
BNB Coin (BNB-USD)
Because of the success of the Binance exchange, BNB Coin (BNB-USD) has seen its market capitalization explode. Currently the fifth-largest cryptocurrency by market cap, BNB remains a key holding for many investors and traders utilizing this network.
Over the past year, the blowup of FTX has certainly hindered this token’s investment thesis. Many in the crypto community have grown skeptical, or at least concerned, about centralized exchanges. Thus, the bear thesis on this token is simple — if everyone moves their crypto to cold storage, BNB won’t have much value at all.
The thing is, crypto exchanges like Binance remain integral to the ability of retail investors to gain exposure to this asset class. Sure, some institutional investors may opt for holding their crypto offline. However, as adoption increases among the masses, it’s likely that BNB will become even more important for those looking to build their portfolio.
Interestingly, BNB has some big catalysts in store for 2023, now that it is a utility token for BNB Smart Chain to create Web 3.o dapps. As more development happens on the BNB chain, one could foresee a situation where this blockchain’s infrastructure grows in size. A growing ecosystem typically drives valuation, at least for other utility tokens. Thus, there’s an improved investment thesis for this token looking forward.
On the date of publication, Chris MacDonald has a position in ETH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.