8 Best Cryptocurrencies To Invest In for 2022
salarko / iStock.com
Cryptocurrency is digital money that isn ’ thyroxine managed by a central organization, like a government. rather, it ’ s based on blockchain engineering, with bitcoin being the most popular matchless. As digital money continues to gain traction on Wall Street, more and more options become available. There are presently over 19,000 cryptocurrencies on the market .
While you can use cryptocurrency to make purchases, most people treat it as a long-run investment. however, volatility makes investing in cryptocurrency hazardous, as demonstrated by the holocene freefall among cryptocurrencies, including stablecoins pegged to the U.S. dollar. It ’ mho significant to know what you ’ re getting into before you buy in. That said, these are eight top cryptocurrencies that could prove to be desirable of investment in 2022.
Top 8 Cryptocurrency Investments in 2022
|Data is accurate as of
1. Bitcoin (BTC)
Bitcoin has been around for the longest of any cryptocurrency. It ’ mho easy to see why it ’ s the drawing card, with a monetary value and market cap that ’ second much higher than any other crypto investment options .
many businesses already accept bitcoin as payment, which makes this cryptocurrency a smart investment. Visa, for case, transacts with bitcoin. The larger banks are beginning to incorporate bitcoin transactions into their offerings as well .
additionally, Tesla announced in February 2021 that it had invested $ 1.5 billion in bitcoin, and for a time, the company accepted it as payment for its cars — and it might again if mining it becomes more environmentally friendly. In a mistreat toward that conclusion, Blockstream and Block, once known as Square, are launching a bitcoin mine in Texas that will be amply powered by Tesla ’ s solar array and Megapack battery, CNBC reported on April 8 .
Bitcoin besides got a boost in May, when the Luna Foundation Guard announced it would make $ 1.5 billion in loans denominated by Bitcoin and terra USD to stabilize the latter, Fortune reported .
Risks of Investing In Bitcoin
The respect of bitcoin tends to fluctuate a bunch. You may see the price go up or down thousands of dollars during any month. That surely has been true thus far this class, as bitcoin prices have correlated to the Nasdaq, as CNBC reported, challenging previous assumptions that bitcoin would serve as hedge against inflation. If wild fluctuations like these make you aflutter, you may want to avoid bitcoin. differently, deoxyadenosine monophosphate farseeing as you keep in mind that cryptocurrency could be a smart long-run investment, these fluctuations shouldn ’ metric ton be excessively concern, and the stream low monetary value could present a good buy opportunity .
Another reason to reconsider investing in bitcoin is its price. With a single bitcoin costing over $ 28,000, most people can ’ thymine yield to buy unharmed bitcoins. For investors who want to avoid buying a fraction of a bitcoin, this is a veto .
2. Ethereum (ETH)
Ethereum is a net that allows developers to create their own cryptocurrency utilizing the network. While ethereum is far behind bitcoin in respect, it ’ randomness besides far ahead of the early competitors .
even though it came out years after some other cryptocurrencies, it has far exceeded its position in the market because of its singular engineering. It ’ south presently the most popular blockchain and the second-largest cryptocurrency behind bitcoin. It stands to gain even more reason once an approaching ascent nicknamed “ The Merge ” is deployed this year. The upgrade will shift Ethereum to a proof-of-stake-based consensus that will reduce the number of coins and supply mining disused. The Merge is besides expected to drastically reduce Ethereum ’ s energy pulmonary tuberculosis.
Risks of Investing In Ethereum
While the Ethereum platform utilizes blockchain technology, it only has one “ lane ” for conducting transactions. This can lead to transactions taking longer to process when the network is overloaded. transaction fees are besides high. The blockchain ’ s “ flatulence ” monetary value — the sum of quintessence needed to conduct a transaction on the Ethereum blockchain — rose 13 % in March due to high necessitate for block quad, CoinDesk reported .
security has besides been an issue. In 2016, for exercise, a hack that took advantage of a security system flaw led to the personnel casualty of more than $ 50 million worth of quintessence. however, The Merge upgrade is expected to make the blockchain more secure .
3. Binance Coin (BNB)
After years of relatively level prices, at least by cryptocurrency standards, binance coin took off at the begin of 2021, surging from about $ 38 on Jan. 1 of that year to an all-time high of $ 683 in May .
Because of its operation over time, binance coin has proven to be one of the more stable investment options — relatively speaking. Binance is the world ’ randomness largest cryptocurrency exchange, according to CoinMarketCap — U.S. residents must use the Binance.US version. But despite its extensive functionality and the coin ’ south success in Binance sub-projects, binance mint is hush a highly fickle investment .
Investors who trade frequently should note that Binance concisely paused deposits and withdrawals for some networks recently, including Polygon and Solana, while it implemented upgrades. The most late one, on April 8, didn ’ thyroxine affect airdrops — rewards based on a share of users ’ situate amounts .
Risks of Investing In Binance Coin
What sets binance coin apart from its competitors is that it was created by a ship’s company alternatively of a group of technical school developers. Although binance coin ’ s committedness to maintaining a strong blockchain has won over many skeptics, some investors remain leery of this cryptocurrency and its potential security issues .
4. Cardano (ADA)
The Cardano network has a smaller footprint, which is appealing to investors for respective reasons. It takes less energy to complete a transaction on Cardano than on a larger network like Bitcoin. This means transactions are faster and cheaper .
last year, Cardano launched a “ intemperate branch, ” an upgrade that increased functionality — in this case, enabling smart contract deployment .
Cardano besides claims to be more adaptable and more impregnable. It systematically improves its development to stay ahead of hackers .
Risks of Investing In Cardano
even with a better network, cardano may not be able to compete with larger cryptocurrencies. Fewer adopters mean fewer developers. This international relations and security network ’ thyroxine appealing to most investors who want to see a high borrowing rate. The platform has big plans, such as launching an incubator that would help Africa reach its potential as a major economy, but it remains to be seen whether it can live up to that likely .
Don ’ thyroxine be discouraged by fluctuations in the commercialize. Your investment may lose money one day and make a profit the following. alternatively of getting caught up in the daily changes, look at the big mental picture .
5. Polygon (MATIC)
Polygon was created by a development team that made significant contributions to the Ethereum blockchain platform. Polygon is designed for Ethereum scale and infrastructure development, according to CoinMarketCap. As a “ layer two ” solution, it expands Ethereum into a multi-chain system, improving transaction and confirmation focal ratio .
Polygon has back from the Binance and Coinbase cryptocurrency exchanges. Its token, MATIC, is used for requital services, transaction fees and as a colonization currency .
New developments that could benefit MATIC prices include the launch by Zo World, a decentralized travel project, of its collapse non-fungible token and other digital assets on Polygon, AMB Crypto reported on April 9. Individuals who buy those assets besides gain possession of Zo Metaverse real estate of the realm .
possibly more significantly, an indian submit government is using Polygon to issue caste certificates to help deliver government benefits to over 1 million low-income citizens, according to CoinTelegraph .
Risks of Investing In Polygon
former last year, Polygon disclosed that it had patched a vulnerability that put about $ 20 million worth of its coins at risk, CoinDesk reported. A hacker discovered the exploit and advise Polygon, which had a fix in topographic point within two days. however, black-hat hackers had already stolen over 800,000 tokens, leaving Polygon on the hook for about $ 1.4 million .
6. Terra (LUNA)
The Terra blockchain uses stablecoins — that is, coins pegged to fiat currencies such as the U.S. dollar, south korean north korean won and the International Monetary Fund ’ s Special Drawing Rights currencies — to power global payment systems, according to CoinMarketCap. Its native coin, LUNA, stabilizes the prices of the blockchain ’ mho stablecoins and serves as a government token that gives holders a voice in decisions that affect the network Terra .
Until a steep worsen in early May, spurred by stablecoin excitability and overall skittishness in cryptocurrency markets, LUNA had fared well in 2022. That ’ s likely due at least in part to Terra ’ mho investment in assets such as bitcoin and avalanche to hold in reservation as collateral for UST, a Terra stablecoin. The solution has been an increase in requirement for UST and less excitability for LUNA than some cryptocurrencies have experienced over the death several months .
Risks of Investing In Terra
Terra uses LUNA to stabilize the value of its stablecoins, putting it “ in the center of the traumatize preoccupation serve, ” Matt Hougan, headman investment officer at Bitwise Asset Management, told CNBC Make It. In the event Terra ’ s stablecoins fail to maintain their pin to fiat currencies, LUNA ’ s performance could suffer, Hougan said. That risk came to fruition when UST “ depegged ” multiple times over respective days in early on May, causing terra ’ randomness monetary value to dive .
Good To Know
Although Terra has done well in the long-run, it experienced a meaning clang on May 12, dropping its price under $ 0.02. It announced in a tweet that it was halting the blockchain temporarily. Do Kwon, fall through of Terraform Labs, announced a plan for convalescence on Twitter prior to the hesitate. Despite its late struggles, LUNA may still be worth watching .
7. Avalanche (AVAX)
Avalanche is a fresh “ layer one ” blockchain — a blockchain that improves the base protocol to make the system more scalable, as Binance described it. It was founded as an Ethereum rival by Ava Labs and calculator scientists at Cornell University, one of whom, former professor Emin Gün Sirer, is a seasoned in cryptanalytic research, according to CoinMarketCap. Whereas Ethereum ’ mho nodes must all validate each transaction, Avalanche ’ s three person blockchains can validate transactions independently. This makes Avalanche more scalable and better able to handle large volumes of transactions — up to 6,500 per second. As a result, it ’ second increasingly democratic among Ethereum projects, U.S. News reported .
As for the mint itself, Bloomberg reported on April 7 that avalanche beat out ether as Terra ’ s reserve currentness for its own UST stablecoin. Luna Foundation Guard, the nonprofit organization administration that supports Terra, will acquire $ 100 million worth of avalanche as part of that inaugural .
AVAX began trading in 2020, in a 24-hour initial coin volunteer. It price has fluctuated from a depleted of $ 9.34 to a high of $ 146.22 over the past year. The mint presently trades for $ 28.38 .
Risks of Investing In Avalanche
Sirer introduced the cryptocurrency via a flannel newspaper in 2018. Its launch took place in 2020. With such a short-circuit history, avalanche doesn ’ t have a lead record for comparison, making it a riskier investment for potential buyers .
8. Chainlink (LINK)
Chainlink uses a decentralize oracle network to facilitate secure interactions between blockchains and external data feeds, events and requital methods the developers hope will allow chic contracts to become the dominant human body of digital payment, according to CoinMarketCap .
One thing working in Chainlink ’ sulfur favor is a strategic partnership with Google under which Google uses Chainlink ’ s protocol to connect users to its cloud services, Benzinga reported. The stick out ’ s advisors include early Alphabet Chairman Eric Schmidt, DocuSign co-founder Tom Gonser and erstwhile LinkedIn CEO Jeff Weiner, according to Securities.io .
Chainlink is besides the choice for the raw inflation index being built by decentralized finance caller Truflation to serve as an option to the consumer price exponent. Whereas the CPI measures inflation using survey data, Truflation ’ mho index will use price data with the CPI ’ s calculation model, CoinDesk reported. The Truflation index is designed to be more accurate, more transparent and more insubordinate to censorship than the CPI .
Risks of Investing In Chainlink
Despite its prove utility and accompaniment from major players, chainlink has experienced the same kind of volatility as other cryptocurrencies. Its monetary value dropped from about $ 20 on Jan. 1 to a high of merely over $ 8.25 on May 11 .
Don ’ t settle on any number of cryptocurrency investments without continuing to learn about the market. A fresh cryptocurrency network could easily climb the ranks and come forth as a leader above early platforms. As an investor, the smartest thing you can do is to stay abreast of marketplace happenings .
Rating the Top Cryptocurrency Choices
Run a quick online search and you ’ ll find dozens of recommendations for how to invest in cryptocurrency. In choosing the circus tent eight picks, the follow factors were considered .
How long has the cryptocurrency been about ? New cryptocurrencies aren ’ thymine immediately ruled out, but having historical data for comparison helps you see how a company has performed up until now .
How has the ship’s company performed during its years in commercial enterprise ? If you see stability in prices, that ’ s a thoroughly sign. If you notice that the cryptocurrency is gaining traction and becoming more valuable with fourth dimension, that ’ sulfur even better .
Good To Know
past performance is not indicative of future operation. At any time things can change, and an investing may perform better or worse than it has in the past .
How does the chopine comparison to others in terms of serviceability and security ? The inaugural thing you want to look for is the speed at which transactions occur. The net should be able to handle transaction traffic with ease .
You besides want to make sure your investment is secure. Most cryptocurrencies use blockchain technology, making all transactions crystalline and easy to track. Blockchain technology doesn ’ t necessarily make it harder for hackers to steal your cryptocurrency. It does make it easier to track your investment so it can be recovered rather of being lost following fraud .
How many people are investing in the cryptocurrency you ’ re considering ? When you see a high grade of adoption, that means the cryptocurrency has better fluidity. deal, selling or spend will be easier in the future .
There ’ s no doubt about it : Cryptocurrencies are here to stay. The interrogate becomes, where is the best position to invest your money in the commercialize ?
As you decide which cryptocurrency is the best investment for you, here are some early things to keep in judgment :
- The speed at which transactions are completed
- The fees associated with transacting
- The ability to use your cryptocurrency for regular purchases and bank transfers
If you ’ re strictly looking to invest without transacting within the network, remember that cryptocurrency international relations and security network ’ t a get-rich-quick scheme. alternatively, you should consider it a long-run investment .
Daria Uhlig contributed to the report for this article.
Data was compiled between May 10 and May 11, 2022, and is discipline to change.
About the Author
Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.