Researching cryptos to buy has gained renewed interest because of the substantial profits generated since the start of the year. However, despite their rapid emergence as significant players in the financial markets, cryptocurrencies remain subject to extreme volatility. Investors could earn billions or lose everything in a single trade.
Selecting which cryptocurrencies to invest in can be challenging because of the industry’s inherent risk of failures, implosions, and fraud. As evidenced by the 63% decline in the crypto market in 2022, making the right choice is crucial. Although the industry has experienced a sharp rally this year, the volatile nature of cryptocurrencies means things can change rapidly.
The cryptocurrency industry may not suit you if you are risk averse and find the price movements too volatile. Investing in the crypto market involves significant risks that investors need to consider. Investing in cryptocurrencies could yield high rewards if you can stand these risks.
| BTC-USD | Bitcoin | $30,159.40 |
| ETH-USD | Ethereum | $1,894.20 |
| AVAX-USD | Avalanche | $18.23 |
Bitcoin (BTC-USD)
Bitcoin (BTC-USD) is the first and most significant cryptocurrency with a market valuation of around $500 billion. It has the most widespread recognition among major cryptocurrencies and various publicly traded instruments following its performance, making it a better option for investors looking to protect themselves from possible complete loss of their assets.
Large publicly traded companies like MicroStrategy and Tesla hold Bitcoin on their balance sheets as evidence of its relative stability. Like other cryptocurrencies, Bitcoin experienced a significant decline of 64% in 2022. However, the token is in a much better position this year.
Toward the end of February, there was a nearly 40% increase in the token’s value from the beginning of the year. The positive trend in Bitcoin’s price continued throughout March, following the government’s assurance that depositors at Silicon Valley Bank (which operates under SVB Financial Group) could retrieve their funds despite the bank’s collapse. The federal government’s action bolstered trust in the banking industry and digital currencies.
These advancements substantially increased Bitcoin’s value, propelling it from a low of $19,628 on March 10 to peak above $26,500 on March 14.
Looking ahead, we can expect further positive movement for Bitcoin. The primary reason is inflation. Since last year, it has been a core issue pressuring the U.S. economy. As a result, the Federal Reserve has had to step in and try to devise a solution.
Cryptocurrencies are a potential hedge against inflation as central banks continue to print more fiat currencies, leading to currency devaluation and rising inflation. That is why Bitcoin is attractive during these times among cryptos to buy. If you want to know more about why Bitcoin is a great investment, check out David Moadel’s great piece on the issue.
Ethereum (ETH-USD)
Ethereum (ETH-USD), the second-largest cryptocurrency by market capitalization at over $230 million, is designed for various applications.
Ether, the native token on the Ethereum blockchain, can be used for smart contracts, decentralized finance tools, NFT trading, and Web 3.0 applications, with inherent utility beyond being a speculative asset or store of value. It also has a more energy-efficient proof-of-stake system.
What is even more impressive is that the blockchain is continuously being updated. These upgrades regularly lead to a jump in token prices. Ethereum’s Shanghai upgrade is the latest in this long line of upgrades.
In addition, Ethereum’s move from the energy-intensive proof-of-work protocol to the more sustainable proof-of-stake system gives it an advantage over BTC in an environmentally conscious world.
Much like Bitcoin, Ethereum has been doing well since the start of the year. At last look, it is changing hands for $1,914, up 3.1% in the last 24 hours. On a seven-day basis, the token is up 6.22%. Expect the momentum to continue as investors and analysts prepare for the upgrade.
Avalanche (AVAX-USD)
Altcoins with unique value propositions, such as Avalanche (AVAX-USD), deserve consideration for any investment portfolio.
Avalanche is a blockchain network with smart contract functionality, which endows it with various applications, such as creating decentralized applications (dApps), non-fungible tokens (NFTs), and blockchain gaming.
Although it is not the only blockchain network with these capabilities, its developers have incorporated several distinctive features that distinguish it from others.
Avalanche’s subnets feature empowers users to generate miniature blockchains on its network, anticipating a future where individuals and commercial entities will need their blockchains.
With the potential for such a reality, AVAX could emerge as a long-term winner. It suffered a substantial drop of 90% during 2022’s bear market. However, much like other tokens, there has been a mini rally since the start of the year. However, in this case, there are use cases to back this one up. That makes it one of the better cryptos to buy.
As of press time, the AVAX token is up 5.77% over the last seven days to trade at $18.38.
And if you want to keep checking out cryptos to buy, here is some great coverage you can look into.
On the publication date, Faizan Farooque did not hold (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.
