It's no secret that the crypto market has been hit hard over the past year, and the recent FTX scandal has certainly not helped.
However, there's still reason to be optimistic about the sector's future. Crypto as a whole is still relatively new, and downturns -- even severe ones -- are not necessarily uncommon. By riding out the storm and waiting until the recovery period, you could potentially see lucrative returns.
It's critical, though, to choose the right investments. Many cryptocurrencies may not survive this slump, and investing in the wrong places could be costly. While there are never any guarantees in crypto, there are two cryptocurrencies I'm buying and holding forever.
1. Bitcoin
Bitcoin (BTC +1.10%) is the oldest cryptocurrency, which means it also has the longest history of recovering from downturns. It's faced some nasty slumps in the past, too -- some of which make this crash seem mild.
Currently, Bitcoin is down close to 70% from its high in late 2021. Back in 2018, though, it fell by more than 80% over the course of the year. Between July 2014 and January 2015, it dropped by 72%. Along the way, it's also experienced many smaller drops of "only" 30% to 40% from its peak.
CRYPTO: BTC
Key Data Points
While past performance doesn't predict future returns, it is promising that Bitcoin has been able to recover from so many crashes. And despite all of this extreme volatility, it's still up more than 30,000% since 2013. No other asset has even come close to these types of returns, especially over just one decade.
To be fair, it will be tough for Bitcoin to experience these same returns over the next 10 years. But many experts have big expectations for the crypto, with some predicting it could reach $100,000 per token or more in the coming years. Whether that will actually happen is unclear right now, but if Bitcoin's past is any indication, it's far too early to count it out just yet.
2. Ethereum
Ethereum (ETH +0.90%) has fallen by around 68% from its high, but it has plenty of long-term potential.
Perhaps Ethereum's biggest advantage is its diversity. It's more than just a cryptocurrency; it's a smart-contract network that hosts a wide variety of applications.
Not only is Ethereum the largest platform for non-fungible token (NFT) marketplaces, but it's also the most popular blockchain for metaverse applications. It can also host other cryptocurrencies (Shiba Inu, for instance, is built on Ethereum), and because it's an open-source blockchain, developers can build new applications on the network, too.
CRYPTO: ETH
Key Data Points
If any of these areas thrive -- whether it's NFTs, the metaverse, another crypto, or some other application that hasn't been developed yet -- Ethereum will benefit. By investing in Ethereum, then, you're essentially diversifying into multiple areas of the crypto sector.
In short, Ethereum is the go-to blockchain for decentralized applications (dApps). Many experts predict that dApps will be a game-changer in the crypto space, and if that's true, Ethereum could be poised for serious growth.
Is now the right time to invest in crypto?
Despite all its potential, cryptocurrency is still inherently risky. All crypto is speculative at the moment, and nobody can say for certain how it will fare over the coming years. There's still a chance that the entire sector could fail, and even the strongest investments may not survive.
Before you buy, then, make sure you're willing to tolerate a higher level of risk. Don't invest any money you're not prepared to potentially lose, and double-check that the rest of your portfolio is well-diversified to limit as much risk as possible.
Bitcoin and Ethereum won't be the right investments for everyone, and there are no guarantees that they'll succeed. But they have some of the most potential of any cryptocurrencies right now, so there's still reason to be optimistic about their futures.
