Although the rebound in the crypto market might have cooled in February, the new year got off to a hot start for just about every type of crypto, including metaverse and AI tokens. The task now is to find the high-growth cryptos that have the best long-term prospects.
I've highlighted two such crypto tokens that appear to have solid long-term growth prospects. Both are ranked among the top 100 cryptos by market capitalization, but may be flying under the radar of mainstream crypto investors.
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1. Fetch.AI
Fetch.AI (FET 2.31%) is up a spectacular 350% year to date, largely driven by tremendous investor enthusiasm for crypto AI tokens. Given the popular success of chatbot ChatGPT and other AI-powered bot platforms, Fetch.AI has galvanized investors around its AI-powered crypto protocol that enables the creation of autonomous AI agents to carry out online tasks.
What's particularly impressive about Fetch.AI is the scale and scope of these tasks. These are not just cute parlor tricks, like you might expect from ChatGPT. These tasks might transform entire companies and even entire industries. Fetch.AI says that it hopes these autonomous AI agents can help to reorganize supply chains and optimize entire logistics networks. To make this a reality, Fetch.AI has released a detailed roadmap for 2023.
Recently, German engineering and technology company Bosch partnered with this crypto on the creation of the new Fetch.AI Foundation to increase Web3 adoption of AI-powered tools. The foundation, which will function along the lines of the Linux Foundation, will focus on three key areas: mobility, industry, and consumers. Those are three huge potential growth areas, which is why I'm so excited about Fetch.AI.
The only caveat here, of course, is that a number of major tech players also are entering the AI market right now, including Alphabet, via the introduction of Google's Bard AI chatbot. One concern among investors is that any signs of solid performance from Google in the AI sector could lead to a significant short-term decline in the price of crypto tokens such as Fetch.AI.
2. Optimism
Optimism (OP -1.61%) is one of the most important Layer 2 scaling solutions for Ethereum (ETH 0.27%), the world's largest Layer 1 blockchain network. This means that Optimism's growth is directly levered to the growth of Ethereum.
Much of the truly exciting growth occurring in the Ethereum ecosystem will occur at the Layer 2 level, not at the core base layer, so I think Optimism could outperform Ethereum over the near-term horizon. Other investors appear to agree, with Optimism up more than 170% YTD.
The big catalyst for Optimism this year was the announcement of a major new partnership with cryptocurrency exchange Coinbase (COIN 0.78%), which will use Optimism's technology to create an entirely new Layer 2 scaling solution called Base. This could be huge, because Coinbase has said that the ultimate goal is the creation of a vast new "Superchain" that will include both Base and Optimism. This Superchain could become a real force in the world of decentralized finance (DeFi), and that could significantly boost the fortunes of Optimism.
And that's not all: Optimism is also scheduled to release a much-anticipated upgrade called Bedrock that will slash network usage fees by an estimated 47%. This will significantly improve Optimism's ability to attract developers and users, given the major cost savings involved here. Already, signs are pointing to the fact that Optimism has surpassed other Layer 2 rivals in terms of attracting and retaining developers.
Should you buy these two crypto tokens?
These two crypto tokens are tied to important investment theses. One of these is the continued growth of the AI sector and the ability of artificial intelligence and machine learning tokens to transform the world around us. The other is the continued growth of Ethereum, which has the largest, most diversified crypto ecosystem. By investing in Fetch.AI and Optimism, you are gaining access to growth in both of these areas.
Just keep in mind that investing in crypto involves a lot of risk and volatility. These are my two top growth cryptos, but certainly not my two top safety cryptos. They are tied to long-term secular trends in the tech industry, but that doesn't mean that the growth trajectories of these cryptos are going to be straight up. There will be ups and downs, so keep a long-term investment outlook in mind.
