The original cryptocurrency is still the best known, still has the highest market cap, and is traded at a very high volume. While much more technically advanced cryptocurrencies have been developed in the years since Bitcoin emerged, the sheer momentum of Bitcoin has kept it on top of many investors’ lists. It also has the most use cases as a currency, with many companies now accepting it as payment –– including Microsoft, Wikipedia, Overstock, and Twitch, to name a few. Even some countries are beginning to accept Bitcoin in fact, with El Salvador having led the charge. These factors contribute to Bitcoin’s establishment as a mainstream phenomenon, and strengthen the notion that the cryptocurrency will retain value.
Although this coin has long played second fiddle to Bitcoin in terms of value, the Ethereum network it supports is very different. People invest in Ether as the official token of the network because of the applications said network provides access to. As one helpful metaphor goes, using Ethereum applications requires access the way riding a subway requires a metrocard –– and Ether is effectively the cash you use to purchase the card. This alone gives the currency a certain value, though it’s important to note also that many other crypto and blockchain applications also operate on the Ethereum network –– giving said network a high degree of practical utility (and limitless potential to expand). Thus, some investors believe that as the network continues to improve and add useful applications, the value of Ether will only increase over the long term.
Launched in 2020, Solana represents one of a number of attempts to do what Ethereum does better by using another (quite different) software backend. And in fact, the network’s different approach does make it favorable to Ethereum from a standpoint of transaction speed and efficiency. Unfortunately, problems have thus far plagued the Solana network, to the tune of seven outages in the last four months (often due to attacks). This has kept the network from truly challenging Ethereum so far. Given more time however, and the resolution of these kinds of issues, Solana has significant potential as an Ethereum challenger.
We are also seeing mainstream cryptos emerging in the gaming space. In said space, MANA is the token associated with the metaverse-style video game Decentraland. Essentially, buying Decentraland MANA amounts to funding efforts to obtain property and items within the game itself. In other words, people purchase MANA and use it, in turn, to invest in stakes in the virtual world of Decentraland (the crucial asset being LAND, which can be leased, auctioned, or monetized in other ways). As an investor though, you don’t necessarily have to engage with the game to (potentially) enjoy gains. Buying MANA and/or LAND to hold onto can work much like any other crypto investment –– with the assets gaining value over time if things go according to plan.
While Decentraland might be the best-known metaverse outside of Meta-Facebook’s work, it’s by no means the only one. In fact, some claim that backing SAND makes for a better investment. SAND is the “governance and utility token of the Sandbox ecosystem” –– a similar asset to MANA that is used to buy LAND and other assets within the Sandbox game. Interestingly enough, said game was first published in 2012, but migrated to the blockchain in 2021 after receiving backing from the vaunted gaming company Square Enix. Its rapid rise since is what’s led some to buy into SAND as a crypto offering with significant potential.
This is the native token of the Ripple network, which hopes to replace existing international money transfer systems (the biggest of which is SWIFT). Like Solana or even the upgraded Ethereum network, the XRP blockchain ledger is particularly fast and efficient. And in applying those factors toward the effort to create suitable infrastructure for international transfers, this ledger is tackling one of the key applications that has long been associated with blockchain tech’s potential. If this succeeds in a broad way, and more institutions adopt the Ripple network for international transfers, the value of XRP (which helps facilitate those transfers) could rise significantly.
This last asset is another blockchain platform and cryptocurrency combination that was designed in part to rival Ethereum. Beyond its oft-advertised speed and the size of the active developer community, the main claim to fame of the Avalanche network is that it’s especially popular for building platforms that facilitate borrowing and lending –– including complex financial instruments built around those mechanisms. And as is the case with Ether and Ethereum, the native token AVAX serves as a cryptocurrency that drives these applications and functions.
There are many markets to consider when making investments, as well as plenty of potential pitfalls. And as we’ve noted in the past when examining “The Mistakes People Make When Investing”, it’s always important to assess risk, and determine how much of it you’re willing to tolerate. For those who go through this kind of consideration and determine to add cryptocurrency to their portfolios though, the assets described above are among the most sensible ones to take a look at.