Bitcoin has been a trendsetter since it was created in 2009. The new digital currency quickly grew to prominence, gathering a massive fan base along the way. After its inception, many other cryptocurrencies have entered the market with their take on virtual money. However, only a handful of currencies can be considered reliable long-term investments. Despite their differences, the major virtual currencies share some common traits that make them great investors.
For starters, they are all decentralized, meaning that there is no governing body over their operations or emission rate. Another aspect that makes these cryptocurrencies stand out is that they are highly divisible, which means you can buy a fraction of each coin depending on your budget. Furthermore, cryptocurrencies are capped, which means that the total number of coins will not exceed a certain figure (in other words, no “minting” after the currency is fully mined). This makes them inflation-proof for as long as they continue to exist.
6 Popular Cryptocurrencies
The following list looks at six popular cryptocurrencies and attempts to determine which is best for a long-term investment. The ranking considers technology, popularity, and potential to deliver profits in the future.
1. USD Coin (USDC)
For those looking to capitalize on the future of cryptocurrency, USDC might be the best long-term investment. With a market cap close to $129 million, this coin is relatively small compared to some other virtual currencies. However, it has all the makings of a promising new asset-backed by some serious potential for profits in coming years. Investors are excited about the USDC interest rate, which come in at 2.22% annually, and its connection with Coinbase. It’s the first cryptocurrency created by the popular exchange platform and became part of their move towards tokenization. Another important factor contributing to USDC’s popularity was its association with blockchain consortium startup CENTER. This organization is designed to improve popular coins by using them to create a “more open, globally inclusive financial system.”
2. Stellar (XLM)
According to many experts and industry insiders, the future of cryptocurrency lies in blockchain technology. The most efficient way to make sure new digital currencies are sustainable is by supporting the blockchain platforms on which they operate. This is where Stella jumps in with its XLM currency. Although it’s not as powerful or promising as some other virtual currencies, Stellar has one advantage over the rest – IBM backs it. Currently, this collaboration allows companies worldwide to harness XLM for various global payment-related transactions. However, it can become even more significant in the future when IBM begins using Stellar’s protocol on its blockchain platform.
3. EOS (EOS)
When looking at the rapid rise of cryptocurrencies like Bitcoin over previous years, it’s easy to see why many people are getting hooked on this new digital gold rush. However, investing in virtual currencies comes with many risks, and one major hurdle is their volatility rate. In other words, trying to guess which coins will get the biggest boost from investors hasn’t been an easy task historically. Fortunately, some coins have maintained steady growth without too much volatility. EOS is one of these coins. Although it’s not the most profitable coin to date, its price has remained relatively stable. Plus, many industry insiders are optimistic that this virtual currency will see a big boost in the coming months. As more projects are launched on the EOS blockchain, experts expect this coin to continue gaining momentum and significantly increasing value by 2020.
4. Monero (XMR)
For those looking to get into the world of cryptocurrency without attracting too much attention, there might be no better option than Monero. This popular cryptocurrency was specifically created for people with privacy concerns related to their digital wealth. With total anonymity built into the system, there is no way to know where a transaction originated from or how much money an individual has in their account. The lack of transparency allows Monero to operate with virtually no restrictions and easily bypass many laws that have been created over the years. Of course, this digital currency also comes with a major downside – it is associated with illegal activities such as drug trafficking and money laundering. However, if privacy is important for somebody planning to use virtual currencies long-term, Monero is probably one of the best options available right now.
5. Ethereum (ETH)
One of the biggest challenges with virtual currencies is that they are extremely volatile. A coin’s price can rise or fall by 20% or more in a single day. This volatility makes it virtually impossible for most people to use their coins as currency when making purchases from merchants. Fortunately, some coins are designed to limit this problem and provide a steadier form of investment over time. Ethereum is one example of such a coin. Although it started with an unstable price in its earliest days, ETH has grown stronger over time and managed to keep its value relatively stable even during difficult periods. Even more importantly, experts believe that this coin will continue growing in price and valuation over the coming months.
6. IOTA (MIATA)
Another coin that is trying to separate itself from the pack is IOTA. Created specifically for Internet-of-Things (IoT) transactions, this coin has a very interesting business model behind it. Unlike other cryptocurrencies, there are no miners involved in this system. Instead, users who want to send a transaction request need to verify two other previous requests before their own can be approved by the network. This method makes it virtually impossible for an individual to control the currency supply or manipulate its price using phony transactions. As interest grows in this coin, many people are excited to see how it performs over the next few years.
Although many virtual currencies are available today, not all of them are good long-term investments. Some coins may quickly drop in value or lose their appeal, leaving investors with nothing but a worthless digital token. However, by focusing on popular currencies like EOS and Ethereum, it’s possible to gain exposure to the cryptocurrency market without risking too much capital. The secret here is to do more than buy some coins and wait for the price to rise. Much research is needed to find an opportunity that offers the most potential with the least risk, so be sure to put in some time before making any financial decisions involving cryptocurrencies.