Perhaps the next crypto rally is right around the corner. After all, 2023 has been a year of surging valuations in the digital asset space.
Or, this year could turn out to be the latest bear market bounce. Indeed, if recession fears are realized, anything’s possible.
I suppose time will tell. That said, in the crypto space, there’s plenty of innovation to go around. Accordingly, for long-term investors looking at playing the next crypto rally, the question is where to start investing.
In this article, I’m going to highlight three projects I think have immense potential over the long-term. Each of these cryptos are innovative in their own ways, and drive real-world utility.
So, let’s dive in.
One token that’s certainly participated in the recent crypto rally is Arbitrum (ARB-USD).
Arbitrum is a Layer 2 scaling solution intended to enhance Ethereum’s network speed and efficiency by transferring transactions from the main Ethereum chain. Utilizing an innovative approach called Optimistic Rollups, it consolidates multiple transactions into a single batch, reducing the time and cost involved in processing them individually.
By employing optimistic rollups, Arbitrum consolidates transactions into a single Ethereum (ETH-USD) network transaction, resulting in faster transaction speeds and lower gas fees for users. This offers an enhanced Ethereum experience while still benefiting from the security guarantees of the Ethereum network.
Arbitrum has achieved a significant milestone by processing over 200 million transactions on the network. Analysts predict an exceptional performance from Arbitrum this year, forecasting a trading range of $4.29 to $5.01 for the Arbitrum token by the year-end, based on up-only metrics.
ARB token trades at $1.30 USD, 24-hr trading volume of $417,326,371 USD. The bullish token is a smart investment with potential to hit $2.77 by year-end, according to DigitalCoinPrice.
Aforementioned Etheruem has a market capitalization of over $220 billion, making it the second-largest cryptocurrency. Its smart contract features enable developers to create decentralized applications on the blockchain, leading to increased adoption of decentralized finance (DeFi) applications.
Ethereum strikes the right balance between risk and reward, making it a top choice for investors. As the leading blockchain in the Web3 space, it offers unrivaled utility and is home to many popular metaverse projects. Additionally, the blockchain boasts the largest ecosystem of smart contract-based tokens, including NFTs, and undergoes regular upgrades to enhance scalability and speed.
However, Ethereum is still a young project compared to Bitcoin (BTC-USD), with price data only available from late 2015. Therefore, we will only analyze the 5-year, 1-year, and peak-to-trough returns/losses. If you had invested $1,000 in Ethereum five years ago, you would have made a profit of 146.82%, bringing your total capital to $2,468.20. This translates to an annualized rate of return of 29%.
In other ETH news, following the successful Shapella upgrade, Ethereum developers are actively planning the next significant change to the blockchain. Dubbed “Cancun” and “Deneb,” the upgrades will take place on the execution and consensus layers, respectively, and will aim to enhance protocol rules and block validation.
Avalanche (AVAX-USD) is a blockchain network worth $6 billion that uses a proof-of-stake consensus mechanism and has better security against network attacks than other cryptocurrencies. It provides subnets, a unique feature that allows for the development of private or public blockchains on the Avalanche network for various purposes.
Avalanche has promising use cases and could emerge as a long-term winner. Despite a 90% decline during the 2022 bear market, AVAX has seen a meaningful rally this year. For those optimistic about decentralized finance, Avalanche’s real-world applications are likely to support its valuation and appreciation over time.
Avalanche offers better security than Bitcoin and Ethereum, and its unique subnets feature allows for private or public blockchains on its network. It has real-world use cases that could boost its value and growth potential. Despite experiencing a significant decline during the 2022 bear market, Avalanche rebounded in 2023, making it a project to keep an eye on for those interested in decentralized finance.
On the date of publication, Chris MacDonald has a position in ETH-USD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.