It’s a difficult time to focus on finding the best cryptos. Investors are well aware that the cryptocurrency market remains volatile. It’s fair to say that we remain in the crypto winter brought on by rising interest rates, quantitative tightening and a risk-off environment.
That notion is reflected in the overall market capitalization of the global cryptocurrency market. It was essentially reduced by two-thirds during the period from November last year to early July. Again, that was a direct consequence of rising interest rates intended to tamp down uncontrolled inflation.
Now there are signs that the best cryptos may rebound soon as market has turned a corner. Since early July, the market appreciated by roughly $70 to $100 billion. There is some measure of optimism, and fear has subsided. Crypto is clawing back, and that means strategic bets are warranted.
As Bitcoin (BTC-USD) goes, so goes the crypto market. Investors who are bullish on crypto necessarily should consider Bitcoin among the best cryptos to buy. It is the most popular crypto asset there is. Most investors are aware of those facts. However, it’s important to give some relative scale to that importance.
Nothing better exemplifies that than Bitcoin’s market cap, which is currently $447 billion. That capital represents approximately 45% of the total $987 billion of capital invested in crypto globally.
Bitcoin, despite its size, can appreciate very quickly. Daily gains above 10% are entirely within the realm of possibility. That is exactly what happened on Sept. 9. That came following a string of strong days on Wall Street. It exemplifies the truth that a strong stock market usually correlates to an even stronger crypto market.
The news has short sellers quickly moving to liquidate their positions and suggests a reason for bullishness.
Solana (SOL-USD) remains one of the best cryptos to buy. It burst onto the scene in early 2021, went parabolic, and then came back down to earth. All of that action was predicated upon the narrative that it is a strong contender among the so-called Ethereum (ETH-USD) killers.
Solana’s goal is to become the cheapest, fastest and most censorship-resistant network that there is. It gained a lot of notoriety for its transaction speed which has reached as high as 65,000 transactions per second (TPS).
In theory, it can reach a speed of 710,000 TPS. That’s one of the primary reasons pundits believe it could eclipse Ethereum (which is in around 30 TPS at the time of writing) someday. That said, there is speculation that ETH TPS could reach 100k following the merge.
For now, Solana maintains the edge.
One of the best arguments in favor of Cardano (ADA-USD) is its staying power. Cardano became a top-10 cryptocurrency not long after it was launched in 2017.
A lot has changed since then and there has been lots of reshuffling of that top-10 ordering. What’s important though, is that Cardano is 1 of only 4 cryptocurrencies that have maintained a place in the top 10 during that timeframe.
That’s a direct consequence of Cardano’s academic approach to proving its network. The Ouroboros proof-of-stake consensus mechanism is important because it relies on academic proof. This is in direct opposition to Ethereum and its trial-and-error approach which relies on speed at the cost of security and introduces potential errors.
One of the other reasons to consider Cardano is its PoS mechanism is mathematically proven to be as secure as Bitcoin’s proof-of-work mechanism.
Decentrlaland (MANA-USD) emerged out of nowhere in October of last year. Suddenly, it seemed, investors and others were interested in the idea of owning land in the metaverse.
Roughly a month later the crypto winter began.
That resulted in the price of MANA dropping. It also resulted in a sharp decrease in discussion around the opportunity in metaverse land ownership.
But the potential is still there for it to be among the best cryptos to buy. Metaverse projects continue to be built and that will necessarily result in advertising opportunities for owners of that digital property. In other words, Decentrlaland has cooled which makes it a discounted opportunity. That goes for the parcels of digital land that comprise the project, too.
The marketplace isn’t particularly easy to navigate. But for those that take the time to dive deep, the rewards could be massive.
Chainlink (LINK-USD) is a network that functions to connect off-chain data to the blockchain.
In crypto terms, it’s an ‘abstraction layer’ that functions to universally connect smart contracts. In other words, it provides an important part of the infrastructure society will need if it is to decentralize finance.
Chainlink provides a method of connecting off-chain data to the blockchain which in turn allows smart contracts to operate.
My colleague, Chris MacDonald, noted its revenue angle when he wrote in July, “Developers pay Chainlink a fee for their technology in the form of LINK tokens, making Chainlink a unique project. That’s because Chainlink has quasi-revenue and cash flows from which investors can analyze.”
In some sense, buying Tether (USDT-USD) doesn’t make a lot of sense for cryptocurrency enthusiasts.
It is designed to peg to the U.S. dollar and rarely fluctuates by more than a few ten-thousandths of a dollar, although fluctuations of a few cents do occur. So, it lacks the ability to appreciate in price, unlike many other cryptos. That’s an important point of attraction for the asset class that Tether lacks.
So, Tether is essentially a digital store of value pegged to the U.S. dollar. But what is attractive about USDT is that it is very easily swapped for other digital currencies.
The speed with which it can be used as a ‘digital dollar’ shouldn’t be taken lightly. That creates liquidity on digital platforms that simply wouldn’t exist when pumping real-world, physical money onto a platform.
The other advantage is that Tether can be instantaneously sent anywhere around the globe with lower fees.
For one, Polygon (MATIC-USD) is interesting because of its connection to, and utility for Ethereum.
Polygon is a Layer 2 scaling solution. That means it allows Ethereum to act as a multichain system. In other words, it opens Ethereum to become an internet of blockchains. Polygon opened Ethereum.
But Polygon has the advantage of the Ethereum ecosystem which is secure, well-known, and open. The founders of Polygon and the Polygon team helped build Ethereum before moving the entire project onto the Ethereum system in 2019.
Another important feature of Polygon is that it boasts speeds of up to 65,000 TPS. TPS speeds have plagued Ethereum and have slowed adoption. Polygon side chains, with their high speeds, provide an effective counterargument to that issue.
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.