The crypto market is experiencing a difficult 2022 after two years of crypto charts moving almost exclusively up and to the right. With that said, these periods are also opportunities for long-term investors to build positions in high-quality names at a discount. Just like equity investors gobble up shares of blue chip companies during a bear market and reap the rewards over the long term, crypto investors can add some blue chips during times like these and benefit during the next bull run.
There are plenty of top names that are down from their all-time highs but shrugging off the bear market and still building, still growing their communities, and still have catalysts ahead. Down 48% from the all-time high it hit in January this year, despite a deluge of exciting developments underway, Near Protocol (NEAR -2.38%) fits this bill perfectly and is, thus, my top cryptocurrency to buy in May.
Image source: Getty Images.
Community growth
At just over two years old, Near is experiencing exponential growth in both users and transactions. Looking back a year ago, using May 5 as an example, there were 60,710 transactions on the Near blockchain. On May 5 of this year, there were 1,127,225 transactions. That is 1,800% growth in transactions in a one-year timeframe. While there have been some periods when activity has dipped, the trend in activity is up and to the right, with volume grinding higher, especially from March this year onward.
Not only is transaction growth surging, but user growth has also been impressive. Last May, Near had less than 200,000 accounts. By May 5 of this year, Near had approximately 8.4 million active accounts , representing user growth of 4,200%. Not all of these accounts are currently active, but this is still phenomenal user growth, especially when the overall crypto market is down.
Notably, this account growth is accelerating in May -- with about 524,000 new accounts added on May 4 alone, followed by 457,000 accounts on May 5. This spike in new accounts likely correlates with the launch of Near's new dollar-pegged stablecoin, USN, which was introduced at the end of April. Both of these totals are well over double the total numbers of accounts that Near had last May, so momentum is clearly building.
USN
Speaking of USN, Near launched its algorithmic stablecoin at the end of April. Like Terra's (LUNC -0.80%) TerraUSD (USTC -0.23%), Near's coin is not backed by dollar reserves but is minted by burning Near tokens. If USN falls below its peg to $1, traders can exchange 1 USN token for $1 worth of Near. If USN rises above $1, traders can exchange $1 worth of Near for one USN token. This should help to maintain USN's price within a narrow range of around $1. TerraUSD has grown into an $18 billion asset as demand for stablecoins has soared. It has been instrumental in bringing new users into the Terra Network, so a successful rollout of USN could be a significant growth driver for Near.
The USN stablecoin will reportedly pay 10% interest, with the possibility of interest of up to 20% early on. These yields should be compelling factors to attract more users into the Near network.
Follow the money
After Polkadot, Near is the layer-1 blockchain with the most venture capitalist (VC) investment. Some of the biggest VCs in crypto, like Tiger Global, Three Arrows Capital, and Jump Crypto, have funneled $500 million into Near between two funding rounds this year (a $150 million round in January followed by a $350 million round in April). Near can utilize this investment to drive further development on the platform.
Speed and fees
Near also features impressive throughput, enabling up to 100,000 transactions per second, and boasts almost instant transaction finality, or completion. Near's fees are minimal at less than $0.01.
Is Near a buy?
Despite the challenging crypto market, Near is experiencing surging user growth and transaction growth while development continues to flourish. For these reasons, Near is my top cryptocurrency to buy in May.
