ith more than 19,000 different coins and tokens in the market, investor interest is growing rapidly. But picking the right mix to maximize your long-term returns can be overwhelming.
If you’re wondering about the best long-term cryptocurrencies to buy this year, keep reading to find out.
5 Best Long-Term Cryptocurrencies
Here are the top five cryptocurrencies with remarkable potential as long-term investments.
1. Bitcoin (BTC)
Bitcoin is the largest cryptocurrency in the world by market cap. You can use it to make purchases online and off, or, if you’re like most bitcoin investors, view it as one of your buy-and-hold assets in your investment portfolio. It has become more of a safe-haven investment than a currency, earning it a place within your long-term cryptocurrency portfolio.
Bitcoin got a boost last year when Tesla CEO Elon Musk announced the company had purchased $1.5 billion worth, and later, that it would accept bitcoin as payment for its cars. Although Musk rescinded shortly after, citing environmental concerns, plenty of other companies, including Microsoft, PayPal, The Home Depot and Rakuten, accept bitcoin as payment, albeit indirectly in some cases. Other businesses are adding bitcoin to their investment holdings. And in April, Goldman Sachs made its first cash loan secured by bitcoin.
Bitcoin is a volatile asset as you track it day to day. However, it has been the best-performing investment asset for the last 10 years, and a recent network upgrade to add functionality will make the platform more useful and could make the coin more valuable.
2. Ethereum (ETH)
Ethereum ranks as the second-largest cryptocurrency by market cap. It’s both a blockchain platform and a cryptocurrency. The token can be used as a store of value, which is bitcoin’s strength, but Ethereum also has emerged as one of the best platforms for decentralized apps, also referred to as dApps. In fact, it has become a favorite platform for developers because of its support for applications such as smart contracts, which automatically execute a function when specific conditions are met.
Ethereum is in the process of an upgrade. Initially called Eth2 and now referred to internally as The Merge, the result will be improved scalability, security and sustainability of the network, according to the Ethereum website.
Goldman Sachs has taken notice of investor interest in ETH. It plans to offer ether options trading, just as it allows for bitcoin. Some analysts believe ethereum could more than double in value this year.
3. Cardano (ADA)
Cardano is another cryptocurrency to invest in for the long term. While it may not have performed exceptionally in the last few months, the platform has one major benefit over Ethereum — a proof-of-stake protocol. Whereas Ethereum currently uses an older proof-of-work protocol for verifying transactions and protecting the integrity of the network, Cardano’s proof-of-stake protocol serves a similar function, but it’s faster, cheaper and more energy-efficient.
Although Ethereum’s upgrade might level the playing field, Cardano’s popularity among decentralized application developers could keep demand high for its ADA token. In the 24 hours following Cardano’s recent “hard fork,” or change to its protocol, over 100 smart contracts were deployed on the network, according to CoinMarketCap.
Cardano led the pack during a recent rally, gaining as much as 40%, CoinDesk reported. The rally followed a massive cryptocurrency sell-off that reduced the overall market capitalization by 30%.
4. Polkadot (DOT)
With a market cap of over $10 billion, polkadot has become one of the best long-term cryptocurrencies to buy since its launch in 2020. It’s not only a cryptocurrency but also a blockchain network where developers can build innovative, decentralized systems.
Polkadot is built to connect various independent blockchains into a single unified network, and even create new chains. The integration allows users to access the network’s proof-of-stake validation of security and transactions and makes it easier to transfer digital assets like apps and tokens across blockchains. A recent update facilitates communication and asset transfers between Polkadot parachains, opening the network up to new use cases.
Although Polkadot must compete with Ethereum and Cardano, its early entry into smart contracts gives it an edge some analysts expect it to maintain.
5. Chainlink (LINK)
Chainlink ranks as the fifth-best cryptocurrency to invest in for the long term. Launched in 2014, the Ethereum-based network provides real-time data from off-blockchain to on-blockchain smart contracts via nodes and oracles. Its mission, according to Securities.io, is to create the world’s first blockchain oracle network.
Oracles are behind some of the most important blockchain technology and are integral to blockchain’s expansion. The Chainlink 2.0 upgrade, described in a 2021 whitepaper, will build off-chain networks on top of oracles to reduce computational strain on the Ethereum mainnet, Benzinga reported.
Chainlink’s token, called LINK, facilitates transactions on the network.
Benefits of Investing In Cryptocurrency for the Long Term
A cryptocurrency is a form of digital money without a central management system, such as a government. You can buy goods or services using cryptocurrency, but many people treat it as a long-term investment option.
Expectations of Long-Term Investments in Cryptocurrency
A profitable long-term investment in cryptocurrency is one with value that appreciates over a period of time that suits your investing goals.
Typically, long-term investors hold their investments for several years or decades to grow their returns. So, if you believe blockchain-based technology will explode in the future, investing in crypto for the long term can be a great option.
However, it’s crucial to keep in mind that investing in cryptocurrencies exposes your investment to volatility and numerous risks, such as wallet hacking. Therefore, you must understand what you are putting your hard-earned money into before venturing into the cryptocurrency space.