It's a new month and new year. It may also be time to warm up to some new crypto. There's a growing number of viable digital currencies that are easily accessible across many exchanges right now -- but you don't want to buy just any cryptocurrency.
What are you going to buy? I like Ethereum (ETH -3.27%), Decentraland (MANA -5.09%), and USD Coin (USDC -0.35%) this month. Let's see why these are three cryptocurrencies to buy in January.
Let's start with a name that everyone knows. Ethereum's the world's second-most-valuable crypto, and the bullish case is well-known. It raised the bar for what blockchain technology can do, becoming the industry standard for smart contracts. Ethereum's programmable blockchain is fueling more than 3,000 decentralized apps.
Ethereum is good and will get even better later this year when it completes its highly anticipated migration to a proof-of-stake model. However, let's talk specifically about Ethereum in the month of January. We've been through six of them since Ethereum's launch in 2015, and you're going to like its chances to rise this month.
- Jan. 2016: 148%
- Jan. 2017: 35%
- Jan. 2018: 48%
- Jan. 2019: (20%)
- Jan. 2020: 39%
- Jan. 2021: 78%
We're talking about double-digit gains of at least 35% in all but one of the six January months. The one stumble was rough -- a 20% slide three years ago -- but you have to like the odds. Even with the one down month, we're talking about an average gain of 55% in January for Ethereum.
One of the many platforms being propelled by Ethereum's blockchain is Decentraland, a virtual world where its online inhabitants can buy and sell land assets and other digital goods in MANA, the realm's native currency. More enterprising explorers can create ways to monetize content and applications within Decentraland.
Decentraland's popularity is growing. Sotheby's opened a digital outpost in Decentraland this past summer, and a virtual music festival took place a few months later. There are now roughly 300,000 monthly active users.
An investment in Decentraland's MANA is a bet on the platform itself. After all, if the virtual-turf's community grows, demand for MANA as the experience's official governance token will keep moving higher.
I'm going to take a safe route for my final pick, largely because I think a lot of people are settling for low rates on their idle cash. Inflation rates are rising, but most bank savings accounts and even CDs are paying a pittance. If you're willing to take on some more risk in the pursuit of heartier returns, you may want to start exploring stablecoins.
True to the "stable" in their names, these are digital coins that typically offer steady prices. USD Coin is a Coinbase Global (COIN -8.16%) investment that can always be swapped 1-to-1 for U.S. dollars (as long as Coinbase itself is financially viable). If it's held at Coinbase, you can currently earn 0.15% a year on it -- but that's not what I suggest you do with your USD Coin.
There are plenty of other exchanges and crypto platforms where you can earn a lot more than that if you're willing to let them pledge, lend out, or otherwise use your USD Coin. Apps including Gemini, Voyager, and Celsius are currently paying between 7.99% and 9% annual interest on USD Coin. While it's naturally not risk-free, it's not necessarily any more dangerous than traditional fixed-income options with yields that high.