Even the non-crypto investor is likely aware that the cryptocurrency asset class has been channeled this year. Recent news related to the fallout of FTX, one of the biggest crypto exchanges, has once again thrown cryptocurrency into the headlines for all the wrong reasons.
However, past data shows that crypto goes through these boom and bust cycles. Periods of growth are followed by periods of correction. While investors may be deep in one of these corrections, there are three cryptocurrencies that are poised to lead the next crypto bull run: Bitcoin (BTC 0.36%), Ethereum (ETH 1.13%)and Polygon (CRYPTO:MATIC).
The original cryptocurrency
Neil Patel (Bitcoins): If inflation has truly peaked and begins to decline in the coming months, the Federal Reserve will take a victory lap knowing that its aggressive interest rate hikes have worked. And with a more accommodating monetary policy, I think Bitcoin is poised to do well.
The world’s most valuable cryptocurrency is also the oldest digital asset, with a market capitalization of $318 billion to date. And despite its 64% price drop in 2022, Bitcoin has still produced a monster return of over 4,400% over the past eight years. This compares to a total return of 126% for the S&P500 during the same period.
For many investors, individuals and institutions, Bitcoin is their first exposure to the world of cryptocurrencies. As I mentioned earlier, not only is Bitcoin the oldest and most valuable crypto, resulting in significant mindshare among onlookers, but it now has a nascent ecosystem of infrastructure. finance that supports it. Investors can buy Bitcoin directly on a number of different platforms, like Coinbase Global and Robinhood Markets. There are many Bitcoin-focused exchange-traded funds there too. Barriers to buying Bitcoin keep falling.
If crypto prices start to rise, those who have been on the sidelines will likely rush in as fear of missing out takes over. And in this scenario, Bitcoin will be a big beneficiary of capital flowing into the crypto space. Additionally, Bitcoin seems much less risky compared to other tokens, especially in light of the recent turmoil in the crypto industry.
Not only is it likely that Bitcoin could lead the next crypto bull market, but it is also an asset worth owning for the next decade. Bitcoin is starting to become a true store of value, and it could one day be a global currency used by individuals, businesses, banks, and governments. The upside is huge, making it a worthwhile investment to make
The house of smart contracts
Michael Byrne (Ethereum): The FTX debacle is a blow to the industry in the short term, but in the long term the cryptocurrency has survived many black swan events before, meaning FTX’s downfall is unlikely. entails the end of crypto.
As the second-largest cryptocurrency, with a market capitalization of nearly $150 billion, Ethereum will play a pivotal role in any new bull market. Unlike cryptocurrencies like FTX FTX Token Where Earth Moon, Ethereum is a decentralized asset that is not controlled by any entity. No individual or group can make a bad decision that destroys the value of Ethereum, as has happened with many other cryptocurrencies issued by a centralized entity. Ethereum’s transition to proof-of-stake has made it more decentralized than ever, as Ethereum’s 71 million users worldwide can stake their Ethereum holdings to help validate transactions and secure the network. Ethereum is also the largest smart contract platform in the world; over 50 million smart contracts are written on Ethereum.
On the contrary, the FTX fiasco and the implosion of many other centralized exchanges and protocols that preceded it this year show the importance of decentralization in crypto, and Ethereum is the blockchain that underpins much of the today’s decentralized finance (DeFi) ecosystem. Decentralized exchanges such as Uniswap and dYdXwhich are built on Ethereum, are seeing their prices rise as more crypto investors withdraw their holdings from centralized exchanges.
Ultimately, Ethereum is a decentralized global network with millions of users, powering smart contracts, decentralized exchanges, non-fungible tokens (NFTs), and more. As the crypto world picks up and dusts itself off after the FTX saga, Ethereum is well positioned to play a leading role in the next crypto bull run, whenever it happens.
Ethereum’s Perfect Sidekick
RJ Fulton (Polygon): It would be hard to find another cryptocurrency that has been as successful as Polygon this year. Although its price has fallen like much of the crypto market, it has remained resilient compared to others. This resilience can be attributed to a handful of technological achievements and partnerships that the Ethereum scaling solution has achieved in 2022.
Polygon is one of the leading scaling solutions used to accelerate Ethereum transactions. Ethereum is one of the most popular blockchains for things like DeFi, NFT, and Web3, but it can sometimes be slow and expensive to use. Polygon addresses this by processing Ethereum transactions on its own blockchain and then adding them later. This makes transactions exponentially faster and cheaper.
Because of this highly desired feature, Polygon is attracting the attention of some of the largest and most recognized companies in the world as they begin to pursue their own blockchain ambitions. The list includes waltz disney, Coke, Nike, Metaplatformsand even the banking giant JPMorgan Chase.
All of these companies want to use Ethereum as their preferred blockchain, but realize that costs and speeds make it inefficient. Naturally, they are looking to Polygon as a solution to remedy this problem.
As more companies begin to develop their own blockchain products, users will increasingly seek out Polygon. Current trends around Web3, Metaverse and DeFi will throw Polygon into the spotlight. It already seems like the cat is out of the bag, but should a crypto bull market return, Polygon could become a household name.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Michael Byrne has positions in Bitcoin and Ethereum. Neil Patel has positions in Bitcoin, Coinbase Global, Inc., Ethereum, and Meta Platforms, Inc. RJ Fulton has positions in Bitcoin, Ethereum, and Polygon. The Motley Fool holds and recommends Bitcoin, Coinbase Global, Inc., Ethereum, JPMorgan Chase, Meta Platforms, Inc., Nike, Polygon, Uniswap Protocol Token, and Walt Disney. The Motley Fool recommends the following options: $145 January 2024 long calls on Walt Disney, $47.50 January 2024 long calls on Coca-Cola, and $155 January 2024 short calls on Walt Disney. The Motley Fool has a disclosure policy.
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