Those who are new to cryptocurrency will find that there are many choices when it comes to buying crypto as an investment. One can easily become overwhelmed with the hundreds of tokens that are available. Some of these cryptocurrencies are virtually worthless. Others have the potential to increase in value. What is the best cryptocurrency to invest in? Here are our top suggestions.
There is no way to ignore the elephant in the room. Bitcoin is still the king of crypto despite the challenges it has faced from Ethereum, Litecoin, and other rivals. Bitcoin was the first and for many people remains the best cryptocurrency to invest in.
With every passing day we are approaching the maximum number of Bitcoin that can be mined. The fixed supply of the coin is one reason it has endured and continues to rise in value. What may be more relevant, however, is the way Bitcoin’s value affects the entire cryptocurrency market. As goes the price of Bitcoin goes the price of other digital assets. That’s a testament to how important Bitcoin is to crypto.
There will be other altcoins to come along that will probably pass Bitcoin in terms of efficiency and utility. It doesn’t matter. There will always be a demand for Bitcoin simply because of its importance. A smart investor will make Bitcoin an important part of their portfolio. Many feel it should account for 25% or more of one’s total holdings.
Ethereum, or technically Ether, is a close second to Bitcoin in terms of value to an investor. There are certain aspects of the Ethereum platform that make its blockchain useful for a variety of applications. Specifically, Ethereum has introduced Smart Contracts and Dapps which open up many possibilities for the blockchain. These are practical and useful features that have real-world value for a variety of purposes.
The strength of its blockchain alone makes Ethereum a solid choice for investments. The only deterrent is that Ether is designed to be used to pay for Smart Contracts and Dapps. It has other uses, of course, but many people are actively engaged in the transfer of Ether for various services. This means that Ethereum may not be a token to buy and hold because its value can be somewhat static compared to other tokens. Still, excluding Ethereum from your portfolio is probably a mistake.
How much of your holdings are tied up in Ethereum is a personal choice, but 10-20% of the portfolio wouldn’t be a bad decision. It bears mentioning, though, that Ethereum faces many of the same scaling problems as other tokens, and many feel as though it has seen its best days in terms of value.
Many people still believe that Ripple is the answer to what is the best cryptocurrency to invest in. Few altcoins received as much fanfare and hype when they were launched, and for the most part Ripple has lived up to expectations. It has seen a pullback in value as all tokens have following the crypto winter of 2018, but there is still a lot of upside potential.
One of the things that makes Ripple unique among cryptocurrencies is that it is more known as a digital payment protocol than a token. That should tell you something about the potential Ripple has to be adopted by financial institutions and services. It is that appeal as well as partnerships with important companies that have kept Ripple on the list of good crypto investments.
Right now may be the best time to buy this token. It is priced very low as of this writing and offers the opportunity for large returns. It might never rise to the value of Bitcoin, but if the token were to hit $20 in the next year or so that would be a serious win for those who bought in cheap. Allocate 10-15% of your holdings to this asset.
If you are looking for something to buy and hold, or HODL as crypto investors like to say, Litecoin may the answer for you. Touted as the silver to Bitcoin’s gold, Litecoin is an open-source and decentralized fork of Bitcoin developed by Charlie Lee. With a market cap of over $4 billion, Litecoin is a serious player when it comes to altcoins.
The thing you probably need to know about Litecoin is that the developers of the protocol make no bones about their intention to “fix” the things that are wrong with Bitcoin. It remains to be seen if Litecoin can reinvent the wheel, but it has been innovative. Segwit, atomic swaps, and the Lightning Network are all developments that have been pioneered on the Litecoin mainnet. That counts for something.
It seems to us that Litecoin is a cryptocurrency is a dependable source or consistent growth. From an investor perspective that may seem a little boring, but if long-term growth is what you are after then you should give this coin 15-20% of your investment funds.
Diversification is Important
What is the best cryptocurrency to invest in? The truth is that the answer is going to differ from investor to investor. Some are going to want growth while others are going to want short-term gains. What can be agreed upon by all wise investors is that there is a need to diversify crypto holdings. In any type of investment it is unwise to place all your eggs in one basket.
Before you decide how you will allocate your investment capital among the many crypto tokens that are out there, sit down and define your investment goals. Where do you want to be in five years? In ten? This will help you create an investment strategy that is tailored to get you where you want to be. If you diversify there will be less risk along the road to your destination.