Cryptocurrencies are a speculative asset class. They come with extreme risk. Therefore, investors need not treat the issue of investing in them lightly. However, the recent surge in the value of some cryptocurrencies has left many investors wondering which cryptos to buy and which to watch. With the market continuously evolving, keeping an eye on the next cryptocurrencies to explode and those with high growth potential is crucial.
The cryptocurrency market has seen exponential growth in recent years. More importantly, though, the trend is expected to continue, according to several analysts.
On Monday, brokerage firm Bernstein released a research report stating that FTX’s collapse initiated a fresh bullish cycle in cryptocurrency markets. The report highlighted that the downfall of the crypto exchange eliminated the remaining portion of “toxic crypto leverage.” In addition, it provided digital asset investors with valuable insights into the significance of decentralization and the use of self-custody wallets.
Cryptos have become increasingly popular among young investors keen to diversify their portfolios. With the proliferation of new cryptocurrencies, it can be challenging to navigate the market. However, investors who do their research and keep up with industry trends can benefit greatly.
This article will explore the cryptos to buy and watch and those with high growth potential. From established cryptocurrencies to newer players, this piece will provide insights into the current market trends and offer suggestions for investors looking to profit from the next cryptocurrencies to explode.
Established tokens like Bitcoin (BTC-USD) offer greater stability and are safer for investors looking to enter the crypto game. Bitcoin has been gaining momentum, and with the economic uncertainty, its value is expected to continue to rise. Therefore, Bitcoin could be a wise investment choice if you want to hedge your bets.
The flagship cryptocurrency has almost doubled in value since January, marking a comeback after a tough 2022 when it fell nearly 65%. And major investors are noticing and taking advantage of the situation.
While investors should not base their investment decisions solely on someone else’s, Saylor’s investment can be seen as a vote of confidence in Bitcoin.
Moreover, investors should revisit Bitcoin’s investment thesis, primarily to serve as a store of value similar to gold or silver. With a limited supply of 21 million coins and decentralization, Bitcoin is an inflation hedge independent of central control.
As markets continue to value Bitcoin as a riskier asset, its future remains uncertain. Still, it could have more up days than down as the market sentiment towards riskier assets turns positive.
Among the top cryptocurrencies to buy, ATOM (ATOM-USD), the native token of the Cosmos Hub blockchain, has the lowest market cap. However, ATOM serves multiple purposes, including securing the network and acting as a governance token that allows holders to influence the development of the Cosmos ecosystem.
One of the challenges in the cryptocurrency industry is the existence of numerous independent blockchains. Cosmos aims to address this by simplifying inter-blockchain communication, making it faster and less expensive.
The project is crafted by experts, comprising the Tendermint team and the Interchain Foundation, an NGO financially supporting open-source blockchain initiatives. The former CEO and co-author of the project’s whitepaper, Jae Kwon, stepped away from the project in early 2020. However, he remains involved in a different capacity. The other co-author, Ethan Buchman, is president of the Interchain Foundation Council. Paradigm, Bain Capital, and 1confirmation, among other major players in the crypto industry, have invested in Cosmos.
Investors with a long-term outlook may find Cosmos’ work on interoperability significant. Cosmos addresses scalability and interoperability, critical areas where many blockchains fall short. As Cosmos’ ecosystem expands, there is potential for token price to increase as investors gravitate towards projects with unlimited growth potential. This is especially important for investors who see the future of cryptocurrency as dependent on projects prioritizing scalability and interoperability.
Stacks (STX-USD) is a Layer 2 protocol enabling developers to build and interact with Bitcoin applications. Its consensus mechanism, “proof of transfer,” recycles Bitcoin’s proof-of-work without adding environmental impact. The unique thing about it is that it transforms Bitcoin into a programmable base layer. Thus, it removes one of the key criticisms Bitcoin faces compared to Ethereum (ETH-USD).
Stacks employs proof-of-transfer to validate Bitcoin transactions. Miners transfer their Bitcoin instead of burning cryptocurrency, as required in proof-of-burn.
The protocol randomly selects a winning miner who receives a block reward paid in STX tokens. Bitcoin is transferred to Stacks of token holders participating in the consensus process by locking up STX tokens. One can earn passive income with Stacks by “stacking” STX tokens and contributing to the proof-of-transfer system.
Stacks is worth considering because of its distinctive characteristics and growth potential in the highly competitive blockchain market. Additionally, it has yet to achieve a large market capitalization, implying that you can acquire numerous tokens inexpensively.
If you have finished reviewing this list, don’t worry! You can still explore additional cryptocurrencies beyond the selections highlighted in this article. To discover more options, you can refer to two great articles with more potential picks for your portfolio.
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.