The cryptocurrency landscape is constantly changing. Just because a cryptocurrency is here one day doesn't protect it from becoming worthless and losing relevance the next. In fact, it's so common for cryptocurrencies to fade to near worthlessness that the ones that maintain their value are often anomalies.
While investing in whatever cryptocurrency is trendy and in the headlines can be alluring, investors are better off sticking with these five cryptocurrencies. Chances are exceedingly likely that they will be around for decades.
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1. Bitcoin
This one's easy. Every superlative we could give a cryptocurrency could apply to Bitcoin (BTC -2.33%). The list goes on and on: most decentralized, most secure, most resilient, most valuable.
These features have put Bitcoin at the top of the cryptocurrency market, and it is doubtful that we'll ever see it fall from this position. The world's first cryptocurrency has become synonymous with the entire asset class and naturally attracts the most buy-in and attention from investors.
With recently approved spot Bitcoin exchange-traded funds (ETFs) showcasing Wall Street's growing interest, Bitcoin belongs in every crypto investor's portfolio. It isn't going anywhere.
2. Ethereum
With its introduction of smart contracts in 2015, Ethereum (ETH -1.21%) became the first programmable blockchain in the world. As a result, developers could build innovative applications such as non-fungible tokens, decentralized exchanges, and stablecoins, paving the way for the creation of a burgeoning digital economy known as decentralized finance, or DeFi.
Today, the DeFi market is worth more than $93 billion, and nearly 60% of that value calls the Ethereum blockchain home.
Ethereum's dominance in DeFi makes it the ideal choice for institutional investors seeking exposure to this disruptive sector. With anticipation surrounding the potential approval of a spot Ethereum ETF looming on the horizon, the influx of institutional capital into Ethereum is poised to propel its longevity and prominence in the financial landscape for years to come.
3. Polygon
While Ethereum offers leading levels of decentralization and security for DeFi use cases, it does face challenges in terms of speed and high fees. These issues prompted the creation of Layer-2 blockchains designed to address these limitations. Layer-2 solutions process transactions in batches and then finalize them on the Ethereum blockchain, making them faster and cheaper to use.
Recognizing the value of Layer-2 solutions, Ethereum plans to integrate them symbiotically into its ecosystem. Among the various Layer-2 blockchains, Polygon (MATIC -2.98%) has emerged as a standout performer due to its comprehensive functionality. It offers high levels of security, flexibility, and reliability.
Although other Layer-2 solutions may offer faster transaction speeds, Polygon possesses robust features that make it the premiere pick in its class. With top rankings in metrics like total daily transaction volume and number of unique users, as well as an impending upgrade that will make it more secure and versatile, Polygon stands to benefit from Ethereum's growing popularity as its primary Layer-2 companion.
4. Solana
Launched in 2019, Solana (SOL -5.87%) has rapidly ascended among the group of blockchain networks that some describe as "Ethereum killers." Lauded for their swift transaction speeds and cheap fees, these blockchains aim to address Ethereum's sluggishness and high costs without needing a Layer-2 solution.
While it may not boast Ethereum's stringent security measures or decentralization, Solana's remarkable throughput has positioned it as the preferred blockchain for individuals seeking cost-effective and speedy transactions.
Despite the distinct differences between Solana and Ethereum, there is undoubtedly a niche for Solana within the crypto landscape. As is natural in any market, some users will be attracted to the more cost-friendly options, and Solana is rising as the go-to blockchain to fill that role.
To make a comparison, think of Ethereum as a retailer like Whole Foods, where customers anticipate higher costs but prefer to pay a premium for higher-quality goods. In contrast, Solana mirrors the appeal and accessibility of a local dollar store that caters to budget-conscious individuals seeking efficiency.
5. Coinbase
Last but not least, we have Coinbase Global (COIN 5.68%). Obviously, Coinbase isn't a cryptocurrency, but its crypto-centric business model provides investors with comprehensive exposure to the entire spectrum of cryptocurrencies. This eliminates the need to navigate through the thousands of cryptocurrencies on the market, thereby mitigating risk. Essentially, owning shares in Coinbase would be like holding an ETF of cryptocurrencies, offering a diversified portfolio within a single investment option.
As crypto continues to mature and evolve as an asset class, Coinbase stands poised to capitalize on the burgeoning opportunities. With its embrace of innovation and unwavering focus on the user experience, Coinbase is well positioned to ride the waves of momentum driving the crypto market forward and reach its goal of onboarding 1 billion people to crypto.
