Finance, Amidst the ongoing banking crisis within the country and the looming risk of a U.S. debt default, certain investors are currently considering cryptocurrencies as a potential secure investment option to withstand the economic uncertainties. This perspective would have been difficult to conceive merely six months ago, as the prevailing belief was that the “crypto winter” would persist well into 2023.
However, the question arises: are there any cryptocurrencies that can be considered genuinely safe for purchase at present? And if there are, which ones should investors contemplate adding to their portfolios this month?
Bitcoin, represented by the ticker symbol BTC, is considered the first cryptocurrency to consider. It is regaining its reputation as “digital gold” among many investors due to the current market uncertainties. The correlation between Bitcoin and gold has been increasing in recent months, leading to the growing consensus that Bitcoin is likely the safest cryptocurrency to invest in at the moment. However, it’s important to note that “safest” is a relative term, considering the inherent risks and volatility associated with Bitcoin. For instance, its value plummeted by nearly 65% last year.
Nevertheless, Bitcoin has several factors in its favor. Its long track record, dating back to its creation in 2013, has made it popular among both retail and institutional investors. Bitcoin has survived multiple market crashes over the past decade and has consistently emerged stronger. Furthermore, Bitcoin’s international adoption as a payment method and a store of value continues to accelerate, presenting significant upside potential.
Cathie Wood, the founder of Ark Invest, has conducted a long-term growth analysis on Bitcoin and predicts it could surpass the price of $1.48 million by 2030. More conservative estimates suggest Bitcoin could reach $100,000 by the end of 2024. Considering these factors, in my view, Bitcoin offers the best balance of risk and reward among the top cryptocurrencies.
Moving on to Ethereum (ETH), it is the second-largest cryptocurrency in terms of market capitalization, following closely behind Bitcoin. Ethereum provides investors with a diversified ecosystem, granting exposure to various crucial sectors of the blockchain and cryptocurrency space. This encompasses non-fungible tokens (NFTs), decentralized finance (DeFi), and blockchain gaming. By holding Ethereum, investors can mitigate some of the risks associated with having cryptocurrencies in their portfolio through this diversification.
Notably, Ethereum continues to enhance its blockchain through regular upgrades, solidifying its position as the leading Layer 1 blockchain globally. In the previous year, Ethereum successfully implemented The Merge, a technological upgrade that improved its speed, efficiency, and scalability. This advancement positioned Ethereum for the forthcoming wave of growth in the blockchain realm. Moreover, in March of this year, Ethereum introduced Shapella (also known as “Shanghai”), another significant upgrade aimed at securing its status as a premier blockchain.
Ethereum remains committed to future updates, with its founder, Vitalik Buterin, outlining a detailed roadmap for 2023 and 2024. The objective is to establish Ethereum as the most high-throughput, fastest, and scalable blockchain worldwide.
Solana (SOL), my third choice, is a competitor to Ethereum and currently holds a market capitalization of $8.15 billion. It is among the few blockchain projects that have the potential to outperform both Bitcoin and Ethereum this year. In terms of year-to-date performance, Solana has already seen a 107% increase, surpassing the gains of Bitcoin (65%) and Ethereum (53%).
While some may argue that Solana’s impressive recovery is merely a temporary bounce back from the FTX (FTT) incident last year, there are notable developments in 2023 that instill optimism in its future. One such development is the recent introduction of Saga, the first-ever mobile phone by a major blockchain network. Saga, powered by the Android operating system, is often referred to as a “crypto phone” due to its integration of features catering to cryptocurrency usage. This mobile phone could play a significant role in establishing Solana’s presence in the Web3 market, as the platform prepares for other initiatives.
Which crypto to buy first?
If you’re looking to invest in a cryptocurrency this month, the top choice would be Bitcoin. As mentioned previously, Bitcoin provides the best balance between risk and reward. This is particularly crucial considering the current economic challenges present in the market. Bitcoin has demonstrated itself as a reliable safe haven asset, especially when regional banks in the United States are facing frequent failures.
Reference source: USA TODAY