Are you looking for investments with multibagger potential? Look no further than crypto. While this asset class has been off to a rough start in 2022, its long-term prospects look good as blockchain technology improves and investors seek to protect their wealth against spiraling inflation in fiat currencies. Let's explore why Cardano (ADA 1.88%) and Ripple (XRP 0.23%) are excellent ways to bet on this opportunity.
Cardano is one of several advanced blockchains dubbed "Ethereum killers" because of their superior speed and scalability. And while Cardano is far from the fastest network available, its long-term edge comes from its active development team, which boasts real-world experience implementing blockchain technology.
Unlike Ethereum, which uses a cumbersome proof-of-work (PoW) system where miners solve puzzles to verify transactions, Cardano uses a proof-of-stake (PoS) system where miners validate transactions using existing coins. PoS is faster and less energy-intensive than PoW, helping give Cardano a transaction capacity of 257 per second compared to Ethereum's 15.
That said, Cardano's speed is dwarfed by newer competitors like Avalanche and Solana, which boast transaction capacities of 50,000 and 4,500, respectively. But its active developers can help close the gap.
Input-Output HK (IOHK), the team behind Cardano, plans to boost the platform's scalability (it is unclear what the new transaction capacity will be) through an upgrade called Hydra expected to go live by the end of 2022. While future projections shouldn't be taken at face value, IOHK has a track record of success. In 2021, the organization partnered with the Ethiopian government to build a blockchain-based national ID system for students -- an impressive vote of confidence in the team behind Cardano.
Ripple is a blockchain platform designed to help people send money across borders. While any cryptocurrency can technically fill this role, Ripple stands out because of its scalability and real-world partnerships with financial institutions that use its technology.
Analysts at Research and Markets expect the global remittance opportunity to grow at a compound annual growth rate (CAGR) of 13.3% to $42.5 billion by 2028 as migrants send money to friends and family in their countries of origin. This market is dominated by companies like Western Union, which handles about 36% of U.S. customers. But Ripple can disrupt this industry with its superior speed and affordability.
According to its website, Western Union's international transfers cost up to $45 and can take one to five business days. Ripple can process a transaction in as little as 3 seconds at a cost of 0.0001 XRP tokens (each token is worth $0.62, so this is practically free). Ripple is also faster than rival cryptocurrencies like Ethereum (which takes an average of 13 seconds) and Bitcoin, which takes around 10 minutes.
Ripple's developers also operate an enterprise blockchain network called RippleNet, which has partnered with over 100 financial institutions, including American Express. The protocol is designed to help companies with cross-border payments (with the option of using XRP for liquidity), and its adoption is a vote of confidence in Ripple's technology.
Betting on a rebound
Although cryptocurrency now is in a bear market, the slump probably won't last forever if history is anything to go by. That means investors have a great opportunity to bet on assets that can outperform when the market recovers. Cardano and Ripple would make great choices because of their scalability and strong development teams.