- These six cryptos to buy offer good upside, especially when the market starts to turn around or rebound from present fears of a deep recession.
- Bitcoin (BTC-USD): The largest cryptocurrency with a market cap of $574 billion, and down 37% year-to-date (YTD).
- Ethereum (ETH-USD): The second-largest crypto with a market value of $242 billion, and down 46.7% YTD.
- Cardano (ADA-USD): The eighth-largest crypto with a market cap of $17.9 billion, very close to that of Solana.
- Solana (SOL-USD): The ninth-largest crypto with a market cap of $17.8 billion, neck and neck with Cardano.
- Dogecoin (DOGE-USD): The 10th largest crypto with a market cap of $11.5 billion, often very close to Polkadot’s value.
- Polkadot (DOT-USD): The 11th largest crypto with a market value of $10 billion, but often in the top 10 crypto list.
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Cryptos have become ingrained into investors’ outlook, especially given their usefulness as decentralized blockchains. Their platforms are now being used in decentralized finance (DeFi) and other decentralized apps (dApps) that cut out middlemen, extra fees, and bureaucratic and timing/allocation issues. Once markets rebound or recover from their fear of a deep recession, these cryptos to buy will shoot up much quicker than the stock market.
These cryptos have by and large done a little worse than the stock market. For example, Bitcoin (BTC-USD) is down 36.7% year-to-date (YTD) as of May 19. In comparison, the Invesco QQQ Trust Series 1 (NASDAQ:QQQ), which is a proxy for the largest Nasdaq stocks, dropped 27.5% YTD.
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The performance of these six cryptos is also better than the top 100 cryptos as seen in the Cryptoindex.com (CIX100), which is down 44.3% YTD.
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Bitcoin is the largest cryptocurrency with a market cap of $574 billion. The truth is that BTC is likely to stage a comeback once the market decides to rebound.
One reason is there is a limited total potential supply of coins — just 21 million, to be exact. As Bitcoin miners keep producing more, the supply slowly creeps toward that maximum. Since that means there will be fewer potentially available BTC coins, the resulting supply shortage for new investors will push up the price.
Bitcoin is known as a peer-to-peer currency. This means all its transactions occur between equally independent Bitcoin owners and participants. There is no need for any kind of bank or finance company or brokerage firm to act as a middleman. That is the great hope of all cryptocurrency owners.
So far, there are no plans for Bitcoin to quit mining with its proof-of-work (PoW) protocol, which requires a large amount of electricity. That is where other cryptos come into play, as they use non-mining-based protocols.
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Ethereum (ETH-USD) is the second-largest cryptocurrency with a $242 billion market capitalization. It is known as a hybrid platform for now — some versions of Ethereum use a proof-of-stake (PoS) protocol to validate transactions. In fact, Ethereum is planning a transition to a PoS protocol across the platform sometime this year.
The key application of Ethereum is that as a platform, it allows apps and smart contracts, unlike Bitcoin and other PoW cryptos. Smart contracts automatically fulfill any agreement between parties to the contract, without any middleman in between.
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As of May 19, ETH traded below $2,000, which put it down almost 47% YTD. Moreover, it is well off of its highs of almost $5,000 reached in early November 2021. Once markets stop worrying about a huge recession that might come, Ethereum could rebound quite significantly.
Cardano (ADA-USD) is the eighth-largest crypto and has a market cap of $17.9 billion. That’s very close to the market cap of Solana, which is ranked right below it. Trading at 52.75 cents as of May 19, it is down 61.7% from $1.377, where it ended in 2021.
Cardano is structured as a multichannel platform, allowing other cryptos to build their applications on top of it. Its chief goal is to act as an alternative to Ethereum by allowing quicker transaction processing times and cheaper fees.
Initially, its founders thought Ethereum could not accommodate large numbers of users. That has turned out to be the case, as it often has high transaction fees and slow validation speeds.
Since September 2021, Cardano has started accepting smart contracts and apps, especially in the DeFi arena. For example, since the beginning of the year, Cardano’s total value locked (TVL) has risen from $3 million to over $130 million, according to DefiLlama.
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Solana (SOL-USD) is the ninth-largest crypto and has a market cap of $17.8 billion. Trading at $51.75 as of May 19, it is down 71% from $178.52, where it closed in 2021.
Like Cardano, Solana is seen as a faster alternative to Ethereum. Its chief goal is to support massively scaled dApps. As of this month, it can process 2,700 transactions per second (TPS). The platform can reach up to 710,000 TPS at its peak.
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However, the platform is now so popular that it sometimes receives millions of transactions and crashes. Solana says it is making changes so it will be able to handle large numbers of TPS. This is a good kind of problem to have, as long as the issues can be fixed in the long run. It could lead to a substantial increase in the value of SOL.
Dogecoin (DOGE-USD) is a dog-based meme crypto with an $11.5 billion market cap. Its coin features a Shibu Inu dog on its logo.
As of May 19, it was trading for 8.63 cents per coin. This is down 50% from its price of 17.3 cents on Dec. 31, 2021 and well off of its peak price of more than 42.3 cents as of June 1, 2021.
Dogecoin is used as a form of payment by an increasing number of merchants. This has helped increase its popularity as well as its uniqueness as a meme crypto. It also doesn’t hurt that Elon Musk has championed Dogecoin and seems to be standing behind its development.
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Polkadot (DOT-USD) is the 11th-largest cryptocurrency and seems to occasionally trade with Dogecoin for the 10th-largest position. As of May 19, DOT trades for just more than $10 per DOT crypto, down 64.9% YTD from its 2021 year-end price of $28.58. Moreover, it’s well off its 2021 high price of $53.88 reached on Nov. 3, 2021.
Polkadot is also a multi-chain blockchain platform. It allows other cryptos to produce focused dApps and use its platform to validate and close transactions. It also facilitates cross-chain transfers of data and assets, not just tokens.
This makes it useful for smart contract applications, especially in the DeFi arena. These are the kinds of apps that allow investors to stake their DOT assets and earn a good yield, which is paid in more coins.
As a result, once the market starts to rebound, Polkadot is likely to show a highly leveraged return on the upside. This makes it one of the best cryptos to buy for long-term investors.
On the date of publication, Mark Hake did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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