3 cryptocurrencies to grow your portfolio
II will admit to not having much faith in most cryptocurrencies as a long-term store of value. When the number of coins and tokens increase seemingly in the hundreds on a daily basis, you start to feel that maybe someone, somewhere is trying to grab one of you to capitalize on the buzz, excitement and the current trend.
When even the creator of Dogecoin says most crypto is worthless and hurts the people who buy it, it’s hard for many outside observers to get excited about “the future of money.”
Yet just because many, if not most, cryptos aren’t worth a look, doesn’t mean they all are. There are over 17,500 cryptos in the market and some of them can be a serious bet to help your portfolio grow. Here are three of the best to consider.
You cannot dismiss the oldest and largest crypto out of hand. Bitcoin (CRYPTO: BTC) paved the way others are following today, and to this day remains within striking distance of a trillion-dollar valuation, a level it surpassed more than once last year.
More importantly, Bitcoin is the most valuable cryptocurrency and has been accepted by large swaths of investors, consumers, and traders as the most viable alternative to a cash-based society. Virtually every other coin hopes to achieve the status that Bitcoin has earned, and because it is accepted by more merchants worldwide than any of its rivals, it has the best chance of achieving the goal. to be the essential alternative for the money.
Bitcoin also has the best chance of adding wealth to your wallet because it is accepted or denominated in more wallets, exchanges, payment services, and gaming platforms than any other crypto. Its widespread acceptance, the constraints on its supply and the cost of operating it will help maintain its growing value over time.
Even just being the only coin that could become the primary substitute for gold or government debt, Bitcoin is likely to reclaim a $1 trillion-plus valuation.
If Bitcoin is the gold standard of cryptocurrency, then Litecoin (CRYPTO: LTC) is its “silver standard”, something even Litecoin itself recognizes.
It was created from a modified version of Bitcoin’s source code and was designed to be a “lite version of Bitcoin”. And like the precious metal it is associated with, it is much more accessible to ordinary people than gold or its crypto rival. While there will eventually be 21 million Bitcoin tokens, Litecoin will reach 84 million. New blocks on the Litecoin network are generated every 2 1/2 minutes compared to around 10 minutes for new coins on Bitcoin.
Another advantage of Litecoin is that it does not require the computing and processing power that other cryptos need, as it was designed specifically to be mined through consumer computers. Regulators and activists have raised environmental concerns about the vast energy consumption of crypto mining, but Litecoin sidesteps many of those worries.
One of the catalysts for Litecoin’s value growth is the halving that will occur in 2023. The supply of tokens is controlled by halving the number available each time a certain amount is mined. When 840,000 blocks are mined – which is expected to happen next year – the number of blocks miners are rewarded with is halved. It is integrated into the Litecoin algorithm and occurs approximately every four years.
When Litecoin launched, the block reward was 50 Litecoin. Now that two halvings have already taken place, the reward is 12.5 Litecoins, and next year’s halving will reduce it to 6.24 Litecoins.
This should reduce the number of miners mining Litecoin as they shift to more lucrative coins, limiting inflation and scaring Litecoins. Since supply and demand likely have more of an impact on the price of a coin, this should have the effect over time of increasing the value of Litecoin.
Not a crypto itself, but rather a marketplace for their exchange, Coinbase Global (NASDAQ: CURRENCY) should also be on your radar.
Coinbase is the largest and best-known marketplace with over 73 million verified users, 185,000 ecosystem partners (developers, creators, merchants, and others creating decentralized applications, products, and services for the crypto-economy) and 10,000 institutions use its platform to invest and hold around 120 different cryptocurrencies.
With some $255 billion in assets on its platform and $327 billion in trading volume every quarter, Coinbase is the leading crypto exchange. Think of it as the pick and shovel game of cryptocurrencies. No matter which coin or token you prefer, it provides the tools you need to engage with it.
I’m not sure I was the only one baffled by Coinbase paying up to $7 million for a Super Bowl ad of a QR code bouncing on your TV screen for 30 seconds like some Microsoft screensaver, but apparently it was so popular that when people scanned the code, the Coinbase app crashed.
Because cryptocurrencies and the crypto economy are still in their infancy, Coinbase is a great crypto exchange set to grow even more.
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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a board member of The Motley Fool. Rich Duprey has no position in the stocks mentioned. The Motley Fool owns and recommends Bitcoin, Coinbase Global, Inc., and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.