Every day, a new cryptocurrency comes into the market and becomes the most trending topic globally. Big tech companies like Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), PayPal (NASDAQ:PYPL), etc., are recognizing the importance of cryptocurrencies and are including them in their long-term goals.
In 2021, investors reaped heavy profits as the crypto market almost tripled in size. But a crypto enthusiast is always daunted by the famous investing technique of buying the dip.
The journey so far into 2022 has not been fruitful for crypto investors. Two of the most valued cryptos, Bitcoin (CCC:BTC-USD) and Ether, crashed at the beginning of January. As the various cryptocurrencies continue to register declines, investors’ faith in this sector is starting to get tested.
Where the stock market suffered from pandemic blues and high inflation, cryptocurrencies had a bull run in 2021. At the beginning of last year, the market capitalization of digital currencies was $800 billion, and as the year ended, it became $2.25 trillion.
Recent inflation concerns and the potential for rising interest rates have many investors concerned. The extent to which cheap money propped up the crypto market will be tested by hawkish monetary policy. Thus, for now, investors are stuck with a difficult decision — to buy the dip, or wait.
For those looking to buy this dip, here are seven top cryptocurrencies to consider right now:
Best Cryptocurrencies to Buy: Binance Coin (BNB)
This digital currency started its journey in 2017 when it was valued at 3 cents. Over the past five years, Binance Coin has gained more than 10,000%. It touched an all-time high in May 2021, when it reached $686.
BNB is the native token of the world’s largest crypto exchange, Binance. On this platform, this coin can be used for investing in crypto and other investments, or paying transaction fees. BNB coin is highly favored since it is part of a highly liquid ecosystem that has services ranging from Binance loans to token farming facilities.
Indeed, Binance coin showed steady growth in 2021 with a 938% gain in one year. That said, this top token has fallen nearly 20% year-to-date. This coin had its largest gains in March and April of last year. But after its peak, it has been on a rather consistent downtrend. It is currently trading around $400, which provides value investors with an intriguing dip worth buying.
Binance has been making growth-driven acquisitions in the crypto world to boost BNB’s value in 2022. Thus, there’s a strong growth thesis with this token for aggressive investors. For those who believe analyst predictions that BNB could hit $504.47 by July 2022, this token’s upside certainly looks attractive at these levels.
An obvious fear of all crypto enthusiasts is related to the high volatility of the crypto market. Digital currencies do carry impressive upside potential, but in times of uncertainty, one can incur substantial losses.
To protect investors from volatility, the invention of stablecoins took place. These are cryptocurrencies whose values are linked to tangible assets like gold, commodities or other fiat currencies. Other projects, such as Terra, have come up with ways of algorithmically stabilizing their cryptocurrencies. Terra is thus a crypto token with impressive upside, for those who are big supporters of this trend.
Starting last year at 65 cents, LUNA has gained more than 7,000% in one year. Currently, this token has dipped considerably from its all-time high, but remains around $65 per token. However, many cautious crypto investors may like Terra relative to other tokens, due to LUNA’s relative stability. Terra has managed to navigate the recent market volatility much better than its peers.
Terra has a market cap of $23 billion and is backed by numerous Asian e-commerce companies. With 2 million users and 1 billion transactions per year, analysts believe that by 2025, LUNA could gain 20% market share.
Best Cryptocurrencies to Buy: Avalanche (AVAX)
This coin is dubbed the “Ethereum killer” and is also said to be “like Ethereum, but faster.” Avalanche is a popular smart contract platform and Decentralized Finance (DeFi) blockchain. In one year, the value of AVAX has risen more than 400% and is currently trading at a reasonable $64.
Even though the use of Avalanche is limited to trading and paying fees, the platform allows anyone to create and launch their own blockchains. With its protocols, this platform can process over 4,500 transactions per second. Upon comparing it with Ethereum’s speed of 14 TPS, one can understand why Avalanche has the most proof-of-stake validators.
Avalanche gained almost 4,500% in 2021. It began at $9.65 in July and reached $134 in November. Unfortunately, it fell soon after its peak. Accordingly, this price performance indicates this token could remain more volatile than others. During this recent bout of volatility, this has proven to be true.
That said, analysts remain bullish about its growth in the long haul. Ava Labs has various projects in line for 2022, which can boost its prospects despite any dip. It has partnered with Deloitte so that local and state governments can allocate funds swiftly in disaster-hit areas. To develop a gaming program, the team is also linking with Web3 accelerator. These are all catalysts many long-term investors look to as reasons to hold this token right now.
The first to put up a great fight against Bitcoin was Ethereum. Many investors are unaware of the fact that Ethereum is not just a cryptocurrency, but also a protocol that allows multiple blockchains to function.
Even though ETH gets defeated in terms of transaction speed by various smaller smart contract-enabled blockchains, it is still the largest dApp and DeFi ecosystem. Furthermore, this digital currency is globally popular for its consistent performance. ETH began in 2021 at $775 and ended at almost $4,000.
2022 has not been favorable to Ethereum, as this top token recently broke through the $3,000 level and is continuing lower. That said, there are many who believe that this period of volatility is part of the growth process, and there’s more upside on the horizon.
As Ethereum moves from a proof of work validation model to a proof of stake via the Ethereum 2.0 upgrades underway, investors believe this token could be vastly improved both in terms of speed and cost. This would give Ethereum yet another boost to compete with its “killers” such as Cardano, Avalanche and Solana.
Best Cryptocurrencies to Buy: Cardano (ADA)
Cardano is another token that’s often referred to as an “Ethereum killer.” The functioning of ETH and ADA are quite similar, but Cardano is the largest cryptocurrency using the proof-of-stake system. It also beats Ethereum with a speed of 257 transactions per second.
Indeed, Cardano is not the only Ethereum killer in the market, but what gives it an edge is its unique approach. The developers have skillfully divided Cardano’s launch into five phases. It is currently in its third phase of allowing individuals to create their dApps and DeFi products on its blockchain. In 2022, we can see the remaining phases of scaling the network and implementation of a governance solution.
Moreover, the Cardano network aims to improve its scalability further in 2022. To do so, it is implementing a layer 2 scaling solution, where the second layer, on top of the PoS layer, will be able to handle 2 million TPS.
ADA is currently posting a minor loss in year-to-date performance, which is dulling some of its former luster. Since its peak in September, this coin is again trading near the lower level at $1.05. That said, should investors turn bullish once again, Cardano is a token that certainly has the potential to continue taking off.
Upon comparing how much each cryptocurrency gained in 2021, Solana is the clear winner. With a massive transition from $1.40 to $260, the value of SOL rose almost 18,500% in one year. That said, this top-performing cryptocurrency has given up much of these gains, currently trading around $95 per token.
Like Avalanche and Cardano, Solana is also dubbed an Ethereum Killer, but it beats every other currency with its transaction speed of 50,000 TPS. This proof of stake network is among the fastest and cheapest of its peers. Accordingly, Solana has been able to grow its market share in a big way in the NFT and DeFi space.
As a matter of fact, Solana uses a unique proof-of-stake validation model. Unlike its peers, Solana’s proof-of-stake validation protocol is actually dubbed a proof-of-history (PoH) system. With this mixed system, Solana’s platform allows multiple blockchains to run in parallel. Along with that, validators do not have to verify timestamps each time they make a transaction. This speeds up the network, and is a key driver behind Solana’s speed and cost advantage.
Long-term investors may like Solana on this dip. While the market is unfavorable right now, Solana’s recent growth trajectory suggests there’s a lot to like about how this network functions, relative to its competitors.
Best Cryptocurrencies to Buy: Polygon (MATIC)
Finally, we have Polygon. This network aims to solve a big problem in the crypto world — that of scalability.
For large-scale networks such as Bitcoin and Ethereum, this is a big issue. Congestion on the Ethereum network leads to exorbitant fees, which can be as high as hundreds of dollars per transaction. This is where Polygon steps in. Polygon provides a layer 2 scaling solution, ensuring the smooth sailing of the blockchain industry.
On Polygon’s platform, users can access Ethereum without the high gas fees and low speed. By attaching a layer on top of Ethereum, Polygon allows users to take their transactions from ETH to MATIC. Furthermore, with its Polygon Zero feature, the network uses very little energy while transporting data.
Given the importance of Polygon’s protocol in reducing scalability issues, it is obvious why MATIC is becoming popular. Since January 2021, this coin has gained more than 4,500%. It is currently trading at $1.50, making it among the cheapest and most reasonable tokens on the list.
On the date of publication, Chris MacDonald 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.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.