The implosion of FTX, a previously trusted exchange that had high visibility with even casual investors, thanks to its extensive marketing, has given a black eye to a space that has already taken its pieces this year.
However, while many investors have sold their cryptocurrencies during the current crypto winter, for every seller there is a buyer, and some of them are long-term investors who believe in the potential of crypto. . Chaos can provide good buying opportunities. Here are three cryptos that risk-tolerant investors can consider buying during the current bear market.
Ethereum (ETH -1.35%) rebounded 26% from its June low, but sold following FTX’s bankruptcy filing. However, this could be a case where the baby is thrown out with the bathwater as Ethereum is a decentralized and established cryptocurrency that has little to do with FTX. No single entity controls Ethereum, and over 70 million users worldwide help validate transactions and secure the Ethereum network, which stands in stark contrast to cryptocurrencies like FTX Token and many other newer cryptocurrencies issued by exchanges and other centralized entities.
This year, Ethereum users hailed its long-awaited transition to proof-of-stake consensus, known as The Merge, which dramatically reduced Ethereum’s carbon footprint, paved the way for sharding (which will drive possibly faster transactions and lower fees when implemented in the next update), and opened up the possibility for more Ethereum users to earn rewards for participating in the network by staking their holdings to validate transactions and secure the network.
The ability to easily earn staking rewards also increases Ethereum’s appeal as an investment. A user must stake a minimum of 32 Ether to run their own validator, but there are many services that stake your Ethereum for you, allowing you to earn competitive returns with payouts you can earn from popular dividend stocks as well as 10 – treasury bills of the year.
The $180 billion cryptocurrency is by far the largest smart contract platform, making it the de facto gateway for large institutional investors looking to get involved in the world of decentralized finance (DeFi) . JPMorgan Chase recently tested the waters of decentralized finance with its very first DeFi trade. The transaction was executed on Polygon blockchain, which is a layer 2 network on Ethereum. Major decentralized exchanges like Uniswap, dYdX, and others are built on Ethereum. As other traditional financial heavyweights get involved in decentralized finance, Ethereum will be their first stop.
With new capabilities after The Merge such as the ability to earn rewards for staking and its position at the gateway to the world of DeFi, Ethereum looks like a top cryptocurrency to buy during the bear market.
Like Ethereum, Bitcoin (BTC -0.65%) is a decentralized cryptocurrency that stands out in the crowd. The original crypto is also the original decentralized asset. There is no leader or central authority that controls the Bitcoin network, which means that there is not a single entity that can make a bad decision or act in a way that destroys the value of Bitcoin. A network of miners around the world secures the Bitcoin network by solving complex mathematical equations to validate transactions and earn more Bitcoin. Bitcoin is also transparent in that all transactions appear on its blockchain, which is publicly visible.
Bitcoin is the oldest and largest cryptocurrency, and will benefit from the gateway to cryptocurrency as more institutional and corporate investors test the cryptocurrency waters. While the FTX saga has certainly set crypto adoption back a few steps, overall the tide is turning towards Bitcoin and cryptocurrency as a whole.
On October 11, Bank of New York Mellonthe largest custodian bank in the world, has announced that it will offer custody of cryptocurrencies. Alphabet recently announced that it would use Coinbase accept payments using Bitcoin for its Google Cloud services, and MasterCard announced that it would offer its services to allow traditional banks to offer cryptocurrency trading.
As the world moves towards crypto adoption, Bitcoin is best suited to push cryptocurrency forward.
Litecoin (SLD -4.12%) is a major crypto that was able to avoid being taken down during the current sell-off, and proof-of-work crypto has surprisingly grown by 16% in the past month. The $4 billion crypto, which started as a fork of Bitcoin in 2011, is enjoying a mild resurgence, rallying 53% since hitting a low in June.
Litecoin is booming as the network hash rate reaches new all-time highs, indicating growing interest in Litecoin and increased competition to earn Litecoin by mining. Litecoin also benefited from the announcement that it will join Bitcoin and Ethereum as digital assets that will be available on Moneygram Internationalthe payment platform of. Like Bitcoin and Ethereum, Litecoin is one of the cryptocurrencies Google Cloud will accept for payment, giving the 16th-largest crypto by market capitalization added credibility. Perhaps renewed interest in decentralized proof-of-work assets and growing adoption will continue to propel Litecoin higher.
The current crypto winter has been tough for investors, but this bear market is also an opportune time for long-term, risk-tolerant investors to accumulate more tokens at lower prices before market sentiment returns. positive.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a board member of The Motley Fool. Michael Byrne has positions in Bitcoin and Ethereum. The Motley Fool holds and recommends Alphabet (A shares), Alphabet (C shares), Bitcoin, Coinbase Global, Inc., Ethereum, JPMorgan Chase, Mastercard, Polygon and Uniswap Protocol Token. The Motley Fool has a disclosure policy.
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