Written by Christopher Liew, CFA at The Motley Fool Canada
Any type of cryptocurrency other than the world’s most popular crypto, is called an altcoin. Ethereum (CRYPTO:ETH), Cardano (CRYPTO:ADA), and Ripple (CRYPTO:XRP) are examples of altcoins. The three are gaining investors’ attention and could be the best alternatives to Bitcoin.
You can liken digital currencies to growth stocks because of their massive return potentials. Bitcoin rose to an all-time high of US$67,566.83 on November 8, 2021, but the rally did not last. Bitcoin’s volatile nature showed once more and the price dropped 48.2% to US$35,030.25 on January 22, 2022.
As of this writing, BTC trades at US$44,388.80, a year-to-date loss of 4.2%. While the crypto has climbed above US$40,000, don’t discount a pullback. Some crypto analysts think Ethereum, Cardano, and Ripple could have better chances of providing triple-digit returns in 2022.
Upgrade to Ethereum 2.0
Ethereum, the second-most popular cryptocurrency, outperformed Bitcoin last year. Its total return was 399.1% compared to BTC’s 59.7%. This altcoin also went on a tailspin after peaking to US$4,812.90 in November 2021. The price sunk below US$3,000 but currently trades at US$3,239.46 (-12% year-to-date).
Many observers in the crypto sector believe that ETH has a higher price potential than BTC. The Ethereum blockchain is among the extensive networks in the industry and the upgrade to Ethereum 2.0 could propel the crypto higher. The network’s overhaul began in 2020 and should finish by the summer of 2022.
ETH holders should welcome the upgrade because transaction fees will be lower. Moreover, replacing the proof-work mining structure with staking will make the traditional mining system obsolete. According to crypto experts, the Ethereum network is more versatile as other cryptos, including non-fungible tokens (NFTs), trade on the platform.
Fast-growing blockchain network
Some crypto bulls recommend Cardano because the open-source blockchain network boasts excellent prospects. Its platform is similar to Ethereum as developers can also build decentralized applications (dApps) and launch smart contracts. Thus, you can say that this fast-growing blockchain network is Ethereum’s chief rival or competitor.
Cardano’s overall return in 2021 was an astronomical 622.3% and it currently trades at US$1.1948. Its potential increase in value hinges on the success of projects in the pipeline. One of its aims is to carry complex transactions without the need for conduit banks or brokers.
Take-off is near
Ripple might have a significant market share by now if not for the U.S. SEC lawsuit filed last December 2020. The company operates RippleNet, a payment and exchange network. XRP is the national token of the network that offers faster and more affordable money transfer fees. Cross-border payments are likewise instant compared with traditional systems.
Unfortunately, Ripple can’t take off due to the pending case. On February 8, 2022, CoinDesk reported that XRP’s market cap rose above US$40 billion to overtake Cardano. It’s now the sixth-largest cryptocurrency in the world. The price climbed to $0.878 and some analysts say XRP could appreciate exponentially if the court rules in favour of Ripple soon.
Appealing cryptocurrencies
Bitcoin is the still the undisputed crypto king with its market cap of US$832.32 billion. However, that doesn’t mean it’s the most appealing cryptocurrency. Ethereum and Cardano have delivered higher gains already and Ripple could soon too.
The post 3 Altcoins, not Bitcoin (CRYPTO:BTC), Have Triple-Digit Return Potential appeared first on The Motley Fool Canada.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin and Ethereum.
2022