Not every cryptocurrency with a prominent name or a big market cap actually deserves your investment dollars, even if you're only looking to allocate $1,000.
Some of the most well-known assets aren't worth your money. To make the distinction extra clear, let's take a look at one coin that's worth buying right now and two popular ones you should avoid.
Image source: Getty Images.
Ethereum has a reason for capital to stay
What separates a serious cryptocurrency with a real investment thesis from a frivolous one that's guaranteed to lose your capital? One good answer to that question is that the serious projects tend to attract outside capital to an internal ecosystem, and then keep it there.
Ethereum (ETH 0.37%) is thus essentially the textbook definition of the kind of crypto asset that's worth owning. It currently hosts roughly 57% of all value locked in the decentralized finance (DeFi) universe, with more than $56 billion in total value locked (TVL) into its smart contracts and applications. At the same time, it hosts a whopping $159 billion in stablecoins, slightly more than half of all stablecoin value in existence across all blockchains.
CRYPTO: ETH
Key Data Points
You don't even particularly need to understand what DeFi is to appreciate the scale of the capital on the Ethereum network. In practical terms, its base of capital means that it has plenty of fuel for funding its on-chain lending markets, liquidity pools, staking services, and, increasingly, its ecosystem of tokenized real-world assets (RWAs) like stocks and bonds. So where there's plenty of capital, it's usually reasonable to expect even more capital to aggregate, as more liquidity often correlates with more places to derive a return.
Ethereum's developers keep delivering on upgrades for the chain, which also reinforces the idea that the coin will be more valuable in the future than it is today. After two major upgrades dedicated to improving scaling and reducing its transaction fees last year, there are two more launches scheduled for 2026, both of which will build on the previous improvements and lay the groundwork for others down the line.
In short, this coin is worth buying with $1,000 and holding for at least a few years.
Buying these two coins will likely bring deep losses
Whereas Ethereum demonstrates plenty of real utilization, and has a plan for how to boost that utilization further so as to eventually provide a return to coinholders, World Liberty Financial (WLFI +0.00%) and Dogecoin (DOGE +0.40%) offer a unhealthy combination of impossible-to-fulfill dreams and a total lack of traction.
World Liberty Financial, for its part, is a project that's directly tied to the Trump family and their business partners, who as a group control 60% of the company bearing the same name as the coin, and collect 75% of the net revenue created from token sales, not to mention controlling a very large portion of the token supply outstanding.
The core issue for investors is thus that the token's value overwhelmingly accrues to insiders, and not to mere holders. The token's utility is in theory limited to governance voting, but the actual business underpinning the token is not under any legal obligation to abide by the results of governance votes held by investors, as the tokens themselves don't confer any actual legal say by design. Most of the supply remains locked, and will be controlled by insiders upon its eventual unlock.
So if you buy this asset, you're essentially guaranteed to experience dilution of your value, along with some very minimal exposure to growth from its small ecosystem as the only possible upside. Avoid it.
Then there's Dogecoin.
It has no ecosystem, generates no revenue, offers no mechanism through which holders can capture value from any economic activity, and its supply is uncapped, with constant dilution of holders as part of its structure. Its price is entirely dependent on hype and surges of sentiment, both of which are fickle.
Please don't buy it. It won't make you rich, and $1,000 is simply too much to throw away on a meme coin.
