The crypto market has returned to its volatile old ways. The inexorable downtrend of 2022 gave way to some strong gains in January, but the general trend of the market is flat these days. The leading crypto names have gone up one week and down the next.
That being said, I am convinced that digital currencies will revolutionize many industries over the next few years, from banking and financial services to online gaming and insurance. Therefore, I see this dip as a great time to separate the wheat from the chaff and buy high-quality cryptocurrencies cheaply.
So let’s push through the crowd of less light and wannabes to find some top cryptocurrencies on sell-off in February 2023. The following crypto names are down at least 33% over the past year. Still, they do have some really valuable real-world use cases, and with a little patience, they’re sure to regain value in the long run.
Bitcoin: The massive grandfather
Let’s start with the digital elephant in the room. Bitcoin (BTC 2.65%) has set the standard for what a cryptocurrency can be and it remains the largest and most respected crypto name 14 years later.
Bitcoin’s price is down 50% over the past 52 weeks but is also up 38% from last year’s low in November. Many experts agree that the long-term target price is well above today’s modest price.
For example, well-known growth investor Cathie Wood and her firm ARK Invest recently reminded investors that by 2030, Bitcoin should be worth nearly $1.5 million per coin. The reason for this parabolic price increase is that Wood expects demand for bitcoin to skyrocket throughout its lifetime, with supply capped at 21 million bitcoins. Almost 92% of this limited supply has already been mined by bitcoin miners, so there isn’t much room for inflation.
And if you look MicroStrategy (MSTR 5.12%) Chairman Michael Saylor doesn’t give you a hard target price, but rather a pretty solid analysis of what’s next for the largest cryptocurrency. Over the next four to eight years, Saylor expects the regulatory framework around crypto to be smoothed out, allowing large institutional investors to get involved.
Based on this prediction, Saylor’s MicroStrategy goes all-in on Bitcoin. The data analytics company has converted essentially all of its cash reserves into bitcoin, borrowing and selling shares to snag more digital tokens. The company even took out a $205 million loan Silvergate Capital (AND 0.58%)collateralized by some of MicroStrategy’s existing bitcoin holdings for the sole purpose of buying more bitcoins.
Whether you call it “skin in the game” or “bias,” Saylor’s company votes with his wallet.
The company now holds about 132,500 bitcoin tokens worth about $2.88 billion at today’s price. That’s 55% of MicroStrategy’s enterprise value and almost more than the company’s current market cap. If Bitcoin goes bust in the future, so will MicroStrategy. But if it hits Cathie Wood’s 2030 target price, MicroStrategy’s current tokens would be worth $196 billion (and I’m sure the company will buy more bitcoin along the way).
So two bright minds agree that Bitcoin has a bright future. You can still be wrong, and another cryptocurrency could steal the thunder from Bitcoin for years to come, but disrupting a first mover with such a huge lead isn’t easy. The “digital gold” seems poised to live up to its moniker over the next few years, and this drop seems like a good time to pick up tokens at a low price.
Litecoin: A more practical version of Bitcoin
where bitcoin goes Litecoin (LTC 5.10%) will follow. Litecoin started in 2011 as an optimized clone of Bitcoin. Some of the main differences are:
- Litecoin generates new blocks of data more frequently than Bitcoin.
- This will validate new transactions on the blockchain ledger faster and with lower transaction fees.
- Its mining algorithm was explicitly chosen for its high processing rate using consumer-grade graphics cards instead of purpose-built crypto-mining chips.
Litecoin’s fast and cheap transactions make it more useful for everyday retail use than Bitcoin. It’s like quickly and easily pulling out a debit card instead of Bitcoin’s proverbial gold nuggets. As a result, the smaller Litecoin community has received payment support from more than 5,000 e-commerce stores and services. That’s fewer than Bitcoin’s 12,000 traders, but well ahead of most other altcoins.
The coin crashed badly last year, in part due to a controversial privacy upgrade called Mimblewimble. The code change led to regulators banning Litecoin in markets like Thailand and South Korea. However, most of the crypto world is still okay with allowing Litecoin trading and the coin is listed on popular exchanges such as Bitcoin Coinbase Global And Robinhood Markets.
The South Korean panic failed to spark a wave of Litecoin bans in other markets, and investors are beginning to ease those strained nerves. All in all, the Litecoin token is down 33% over the past year and should have excellent returns from that bottom.
Polkadot: Knitting a Web3 fabric from other cryptos
I can’t in good conscience end this list without including them Speckle (POINT 3.72%). It is the cryptocurrency at the heart of the Web3 disruption that is destined to skyrocket as the next generation of the internet supersedes the mishmash of ad-supported social networks you see in the current Web 2.0 model.
With smart contracts, bankless peer-to-peer value exchange transactions, and transparent content publishing systems, Web3 is poised to disrupt the online publishing and e-commerce world. As the official blockchain network of the Web3 Foundation, offering developers easy ways to combine the strengths of many different cryptocurrencies and blockchains into one cohesive application, Polkadot is sure to gain a lot of value as the revolution progresses.
Still, the price of the Polkadot token has fallen by 70% in 52 weeks. It is the 12th largest cryptocurrency with a market value of $7.06 billion, just ahead of Litecoin at $6.56 billion but far behind Bitcoin’s dominant footprint of $419 billion. Thanks to Polkadot’s special and uniquely useful place in the Web3 ecosystem, I expect the token will rub shoulders with Bitcoin and its friends in the years to come. The opportunity for outsized growth is too obvious to ignore, and I take every opportunity to help you spot it.
So if I could only suggest one cryptocurrency in today’s market, my choice would depend on what you want to achieve with your investment.
- Bitcoin is the safe (in the digital sense) bet on long-term storage of value.
- Litecoin is more of a digital dollar that can be used for everyday shopping transactions – more liquid but perhaps more volatile in the long run.
- And Polkadot plays a completely different game, offering a brand new vision of what the internet can be.
For what it’s worth, I’ve been holding onto my Litecoin and Bitcoin lately while purchasing several batches of additional Polkadot. I can’t wait for Web3 systems to go mainstream in a big way, so I’m doing what I can to take advantage of this upcoming metamorphosis.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.