Cryptocurrency is digital money that isn’t managed by a central system, like a government. Instead, it’s based on blockchain technology, with Bitcoin being the most popular one. As digital money continues to gain traction on Wall Street, more and more options become available.
While you can use cryptocurrency to make purchases, most people treat it as a long-term investment. However, volatility makes investing in cryptocurrency risky, as demonstrated by the 2021-2022 freefall among cryptocurrencies, including stablecoins pegged to the U.S. dollar. It’s important to know what you’re getting into before you buy in.
Top 10 Cryptocurrency Investments in 2024
These are 10 top cryptocurrencies that could prove to be worthy of investment in 2024.
| Cryptocurrency | Price | Market Cap |
|---|---|---|
| Bitcoin | $69,959.82 | $1.38 trillion |
| Ethereum | $3,545.94 | $425.8 billion |
| Binance Coin (BNB) | $617.12 | $92.26 billion |
| Cardano | $0.6571 | $23.39 billion |
| Polygon | $0.9947 | $9.86 billion |
| Terra (LUNA) | $1.10 | $765.36 million |
| Avalanche | $53.93 | $20.28 billion |
| Chainlink | $18.97 | $11.14 billion |
| Solana | $185.77 | $82.56 billion |
| Dogecoin | $0.2141 | $30.76 billion |
1. Bitcoin (BTC)
Bitcoin has been around for the longest of any cryptocurrency. It’s easy to see why it’s the leader, with a price and market cap that are much higher than any other crypto investment options.
Many businesses already accept bitcoin as payment. Visa, for example, transacts with bitcoin. And after a long cryptocurrency hiatus, Stripe, through its partnership with OpenNode, allows merchants to settle transactions and convert payments to bitcoin. The larger banks have begun to incorporate bitcoin transactions into their offerings, as well.
In a major boon to bitcoin’s value as an investment asset, several companies, including Fidelity and BlackRock, finally got Securities and Exchange Commission approval for the spot bitcoin exchange-traded funds they’ve been gunning for. In fact, the SEC approved all 10 applications submitted to it, according to Cointelegraph.
While investors have been able to indirectly invest in bitcoin since 2021, through exchange-traded funds that held bitcoin futures contracts, the SEC decision approved ETFs that hold bitcoin itself, giving investors a way to make direct investments in the cryptocurrency without having to buy or store their own coins.
It took just four days of trading for front-runner BlackRock’s spot ETF, the iShares Bitcoin Trust ETF, to reach $1 billion in assets, Reuters reported, and it since has grown to $9.41 billion. Fidelity’s Wise Origin Bitcoin Fund net assets stood at $61.43 billion on March 29.
Risks of Investing In Bitcoin
The value of bitcoin tends to fluctuate a lot. You may see the price go up or down thousands of dollars during any month. That certainly was true in 2022, as bitcoin prices correlated to the Nasdaq, as CNBC reported, challenging previous assumptions that bitcoin would serve as a hedge against inflation.
Prices since have soared, thanks in part to the SEC approval of spot ETFs, but considering that they’re new funds, analysts can only speculate about the effect they’ll have on bitcoin values over the long term.
2. Ethereum (ETH)
Ethereum is a network that allows developers to create their own cryptocurrency and deploy smart contracts utilizing the network. While ethereum is far behind bitcoin in value, it’s also far ahead of the other competitors.
Even though it came out years after some other cryptocurrencies, ethereum has far exceeded its place in the market because of its unique technology. It’s currently the most popular blockchain and the second-largest cryptocurrency behind bitcoin.
The cryptocurrency world anticipated that ethereum would gain even more ground following the deployment of an upgrade, nicknamed “The Merge,” that shifted the Ethereum network to a proof-of-stake-based consensus. The upgrade was anticlimactic for ETH holders, but it did pave the way for Ethereum’s future evolution in terms of scalability, cost reductions and security enhancements.
Although ether doesn’t have the widespread acceptance bitcoin does, traditional companies are coming on board. Fidelity, for example, bulked up its tech workforce to create the infrastructure needed to offer ethereum custody and trading services to its customers, The Wall Street Journal reported. Other brokerages are likely to follow if they haven’t already in the hope that the SEC will approve spot ethereum ETFs.
Risks of Investing In Ethereum
Although The Merge vastly improved Ethereum’s energy efficiency, it didn’t resolve slow transaction speeds or high gas fees. The platform currently has just one “lane” for conducting transactions. This can lead to transactions taking longer to process when the network is overloaded.
Transaction fees are also high. For improvement there, users must wait for Ethereum to implement “danksharding,” which will require several upgrades. According to the Ethereum development site, proto-sharding, an intermediate step in that process, will use rollups to reduce costs. Rollups bundle hundreds of transactions into one transaction on layer one and could reduce fees by up to 100x.
3. BNB (BNB)
Because of its performance over time, binance coin, now called BNB, has proven to be one of the more stable investment options — relatively speaking. It’s the native token on Binance, which is the world’s largest cryptocurrency exchange, and on Binance.US, the version U.S. residents must use. But despite its extensive functionality and the coin’s success in Binance sub-projects, BNB is still a highly volatile investment.
One thing working in BNB’s favor is that Binance burns, or destroys, coins once per quarter. The most recent burn, which occurred on Jan. 17, reduced the coin supply by 2.14 million tokens — about $636 million worth. It didn’t affect prices in the short term, but managing the number of tokens can have a positive effect over time by creating scarcity. BNB has a total supply of 149,536,269 — all of which are circulating.
It’s worth noting that Binance took a leading role in stabilizing the crypto industry following the collapse of the FTX exchange. It devoted $1 billion to a recovery fund established to keep struggling players afloat, CNBC reported.
Risks of Investing In BNB
Although BNB’s position as the native cryptocurrency on the world’s largest exchange “legitimizes” it in some respects, it also makes the currency especially vulnerable to regulatory issues. BNB lost 7.3% of its value in June 2022 when news broke of a Securities and Exchange Commission investigation into whether Binance followed proper procedures in its 2017 initial coin offering, Fortune reported. The SEC has accused Binance of other wrongdoing, including commingling investor funds and using Binance.US as an unregistered exchange. The SEC fined Binance $4.3 billion in November 2023, and the company’s CEO at the time, Changpeng Zhao, pled guilty to violating anti-money-laundering requirements, The Wall Street Journal reported.
4. Cardano (ADA)
The Cardano network has a smaller footprint, which is appealing to investors for several reasons. It takes less energy to complete a transaction on Cardano than on a larger network like Bitcoin. This means transactions are faster and cheaper.
In 2021, Cardano launched a “hard fork,” an upgrade that increased functionality — in this case, enabling smart contract deployment. Another hard fork, this one called Vasil, launched in September 2022 and should improve the Cardano blockchain’s scalability, Mint reported.
Cardano recently launched a test version of a platform called AdaSwap, where developers can build decentralized finance apps. AdaSwap could elevate Cardano’s status as a Web3 network and drive up the price of its coin. While the coin is No. 9 in terms of market value, Cardano’s nonfungible-token protocol is the world’s second largest, according to U.Today.
Risks of Investing In Cardano
Even with a better network and the increased functionality smart contracts provide, cardano may not be able to compete with larger cryptocurrencies. Fewer adopters mean fewer developers. This isn’t appealing to most investors, who want to see a high adoption rate.
The platform has launched an incubator that funds African blockchain startups and could help Africa reach its potential as a major economy, but it remains to be seen whether it can live up to that potential.
Advice
Don’t be discouraged by fluctuations in the market. Your investment may lose money one day and make a profit the next. Instead of getting caught up in the day-to-day changes, look at the big picture.
5. Polygon (MATIC)
Polygon was created by a development team that made significant contributions to the Ethereum blockchain platform. Polygon is designed for Ethereum scaling and infrastructure development, according to CoinMarketCap. As a “layer two” solution, it expands Ethereum into a multi-chain system, improving transaction and verification speed.
Polygon has backing from the Binance and Coinbase cryptocurrency exchanges. Its token, MATIC, is used for payment services, transaction fees and as a settlement currency.
In July 2022, Polygon announced in a press release that it had launched Polygon zkEVM, “the first Ethereum-equivalent scaling solution that works seamlessly with all existing smart contracts, developer tools and wallets.” It does this with a type of cryptography called zero-knowledge proofs, which lower transaction costs and increase throughput.
Polygon hosts tens of thousands of decentralized apps, including some from companies like Meta and Stripe and, more recently, Credit Suisse and Deutsche Bank. In addition, Polygon fully supports the tether stablecoin, which could contribute to the network’s future growth. Another plus is its investment in carbon neutrality, which occasionally has prompted price rallies.
Risks of Investing In Polygon
Polygon’s layer-two solution is designed to overcome Ethereum’s speed issues. However, future Ethereum improvements could eventually result in faster transaction speeds than Polygon provides, eliminating Polygon’s primary advantage.
6. Terra 2.0 (LUNA)
The Terra Classic blockchain used stablecoins — that is, coins pegged to fiat currencies such as the U.S. dollar, South Korean won and the International Monetary Fund’s Special Drawing Rights currencies — to power global payment systems, according to CoinMarketCap. Its native coin, now using the symbol LUNC, stabilized the prices of the blockchain’s stablecoins.
However, terra crashed and burned in early May 2022, spurred by stablecoin volatility and overall skittishness in cryptocurrency markets, halting the cryptocurrency’s strong year and driving some crypto platforms into bankruptcy.
After the crash, Terra rebranded the original network as Terra Classic (LUNC) and…
Read More: 10 Best Cryptocurrencies To Buy for April 2024
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