Long-term investing is the key to sustainable investing returns. And while not every asset is built for lasting success, Bitcoin (BTC -1.04%) and Terra (LUNC -3.24%) fit the bill. Let's explore some reasons these cryptocurrencies are ideal for long-haul investors.
1. Bitcoin
Never underestimate the value of a dominant brand. Worth a whopping $853 billion, Bitcoin represents 42% of the entire crypto market. And despite not boasting the functionality of newer networks, its first-mover advantage and mainstream adoption give it a sustainable edge.
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With a transaction capacity of seven per second and limited support for complex smart contracts (self-executing programs stored on a blockchain), Bitcoin isn't the most technically advanced network. For comparison, rival Ethereum can handle 15 transactions per second, while Solana boasts 50,000 -- and both host dApps (decentralized apps), which are programs that use smart contracts to offer services on the blockchain.
That said, Bitcoin was the first public cryptocurrency when it launched in 2009. And this gives it brand recognition that new coins can't replicate. According to the blockchain directory Cryptwerk, Bitcoin is the most widely accepted cryptocurrency, with 7,855 merchants accepting it as payment. Ethereum comes second, with just 4,068 merchants. Bitcoin's developers also have a track record of updating the network to address its challenges.
In November, Bitcoin activated Taproot, an upgrade that boosted privacy and could help the network host more complex smart contracts, which are self-executing programs stored on a blockchain (although these won't be as complex as Ethereum's smart contracts). Updates like Taproot could be an early step in helping Bitcoin close the gap with newer blockchains, although more changes will be needed.
2. Terra
Terra is a blockchain network designed to host stablecoins (crypto tokens pegged to real-world currencies). The unique asset looks built to stand the test of time because of its highly specialized niche and tremendous real-world utility for the cryptocurrency community.
While cryptocurrency is a great way for investors to diversify their portfolios and have more financial privacy, it comes with a big downside: volatility. Terra aims to solve this problem by offering a suite of stablecoins, which are decentralized digital tokens pegged to the value of real-world currencies like the U.S. dollar or euro.
The Terra platform has two native tokens: Terra, which is its portfolio of stablecoins, and LUNA, which is a separate token designed to absorb the volatility of the stablecoins -- meaning LUNA grows based on demand, giving investors a great way to bet on the uptake of the Terra platform. With a market cap of $32 billion, Terra is already the 9th-largest cryptocurrency by market cap. And it is poised for continued success because of its super-practical use-case.
Betting on sustainable advantages
Cryptocurrency has been in a bear market this year, with the market's combined value falling 9% year to date to $2 trillion. That said, the industry has a track record of bouncing back from similar declines over the long term. And Bitcoin and Terra could help power a rebound. As the larger and more established asset, Bitcoin is probably the safer bet. But Terra's potential for real-world utility is also too good to ignore.
