As investors continue to trudge their way through this crypto winter, it's easy to get caught up in the bad news. The vast majority of cryptocurrencies have tanked over the past year, and nobody knows when we'll see the light at the end of the tunnel.
However, many cryptocurrencies are still loaded with potential, and investing now when prices are lower could be a smart financial move.
While it's uncertain which investments will be the most successful, there's one crypto that could be the Ethereum (ETH +3.06%) of 2023: Polygon (MATIC +0.00%).
Why Polygon is positioned for serious growth
Polygon is a Layer 2 solution, or sidechain, that's built on top of Ethereum. In other words, it processes multiple transactions for Ethereum and then bundles and transfers them onto Ethereum's blockchain. This helps speed up transaction times and lower fees.
This alone is huge for Polygon. Ethereum is one of the largest, most popular blockchains in the world, but all of that congestion has led to sluggish transaction times and high fees -- which have caused frustration among users and developers.
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The relationship between Polygon and Ethereum is symbiotic. Many developers and users want to use Ethereum's blockchain but are hesitant because of the fees and transaction times.
By going through Polygon instead, they can take advantage of Ethereum's wide range of uses in a more time- and cost-effective way. And the more people and businesses use Ethereum, the more Polygon stands to benefit from it.
Polygon is attracting big names
Another major advantage of Polygon is its corporate partnerships. Many companies are starting to dip their toes into the world of Web3, and they often need an outside partner to help integrate these processes.
Last year, Meta Platforms announced it would be jumping into non-fungible tokens (NFTs) by allowing Facebook and Instagram users to connect their digital wallets to their accounts. Polygon was one of a handful of blockchains chosen to work on the project.
Polygon also made headlines after it was chosen for Walt Disney's Accelerator Program, which aims to find and fund up-and-coming innovative technologies. Ultimately, Polygon aims to form a partnership with Disney to integrate blockchain into its current technological ecosystem.
Along with Disney and Meta, Polygon has also worked with other household names like Nike, Starbucks, Mastercard, and Coca-Cola to help with their blockchain endeavors. With all of these major brands behind it, Polygon could be headed for serious growth in 2023 and beyond.
Will Polygon become the next Ethereum?
Polygon's close relationship with Ethereum puts it in a unique position. If Ethereum thrives over the coming years, Polygon will likely benefit from it. And because Polygon is helping make Ethereum more efficient, it could draw more users and developers to the blockchain.
But Polygon is no one-trick pony, and its brand partnerships could also set it up for substantial growth.
Of course, nobody can say for certain where the crypto market is headed, so there are no guarantees that Polygon will thrive. But with prices substantially lower, now could be one of your best chances to buy the dip. If Polygon is poised for tremendous growth, investing now could prove to be lucrative.
