Crypto Industry
Early in 2022, choosing the best cryptos may seem like choosing the least bad option. The performance of cryptocurrencies is following the broader market. This is creating two competing narratives. By not following the flight to value, crypto skeptics see their skepticism validated. And from a technical standpoint, there is reason to believe that cryptos may have further to fall.
On the other hand, cryptocurrency bulls are pointing out that cryptocurrencies are now a firmly established asset class. With that in mind, it stands to reason that cryptos would not be spared the price volatility you get from other asset classes.
Either way, investors can buy cryptocurrencies at prices that haven’t been seen in quite some time. But this doesn’t mean you still shouldn’t be selective. Cryptocurrencies remain speculative investments. With thousands of coins available, it stands to reason that there will be some currencies that stand out from the rest for good or bad.
It may come down to this. Now may not be a good time to trade crypto, but it may be a great time to invest in crypto.
Best Cryptos
I continue to believe that in the long run, the sheer number of cryptocurrencies will decrease. So when looking at cryptos that make the best buys, I’m considering those tokens and coins that show a strong likelihood of making this cut. With that in mind, my picks for the best cryptos for March are:
Bitcoin (BTC)
Bitcoin is the original crypto that is still the largest in terms of market capitalization. The price of Bitcoin continues to be affected, in large part, by the laws of supply and demand. With that in mind, the BTC price is down significantly from the all-time high it reached in November 2021. Many observers believe that the next leg up for Bitcoin will occur when crypto regulation becomes a reality.
Ethereum (ETH)
Ethereum is the second-largest crypto by market capitalization. The big catalyst for Ethereum in 2022 is expected to be the full launch of Ethereum 2.0, which will transition the Ethereum blockchain to a proof-of-stake (PoS) protocol. In addition to improving the network speed, it should also lower the gas fees that are causing many developers to abandon Ethereum in favor of other blockchains.
Litecoin (LTC)
Litecoin is the “light” version of Bitcoin because it shares many similarities with Bitcoin. To believe in the bullish case for Litecoin means believing that Bitcoin has coattails. The two coins have a history of moving in tandem. However, LTC is down 33% in 2022; whereas, BTC is down only 16%. Litecoin is also expected to benefit from privacy-oriented upgrades.
Cardano (ADA)
Cardano is one of the leading contenders to compete with Ethereum. The platform is still in the middle of building out all the stages of its network. But that didn’t stop investors from showing significant interest in the coin in 2021. However, the network’s ADA token has found it tougher to recover from the broad selloff in cryptocurrency. And that downward pressure is likely to continue as long as crypto remains under pressure. However, investors that are looking to take measured, long-term positions in crypto should consider Cardano.
Polkadot (DOT)
An investment in Polkadot is an investment in a truly decentralized internet. That’s what Polkadot is attempting to do with its parachain technology. These user-created blockchains connect with Polkadot’s central blockchain. This facilitates cross-chain transfer of any data or digital asset. In layman’s terms, it allows different coins and tokens to communicate with each other. The DOT token is down nearly 36% in 2022 after climbing above $54 in November 2021.
Avalanche (AVAX)
When you consider tokens that could compete with Ethereum, Avalanche deserves some consideration. AVAX was one of the best performing cryptos in 2021. Avalanche has been growing rapidly with over 360 new projects popping up in the last 18 months. At one point, it was trading as high as $134. It fell to $60.22 as a function of the indiscriminate crypto selloff. But it appears that discerning investors are voting with their dollars. The price of the token is up 20% from the $60.22 selloff price.
Ripple (XRP)
Last on my list of best cryptos is Ripple. When I first wrote about Ripple, I said that the underlying use case for the token appealed to me more than XRP itself. That’s still the case. However, with the company finally appearing to be getting its situation with the Securities and Exchange Commission settled, XRP should have a nice runway to move higher.
What are Good Cryptos to Buy?
When considering the best cryptos to buy, the phrase different strokes for different folks comes to mind. The best cryptos to buy will largely depend on what you may be looking for. With that in mind, investing in cryptocurrency requires a significant amount of research.
Are Cryptos Good Investments?
With the need for decentralized currency becoming more apparent, cryptocurrencies are looking like good investments. However, the jury is still out. I believe that cryptos are becoming more attractive as long-term investments than short-term trades.
Are Cryptos Considered Value Investments?
Cryptos are highly speculative investments and are not considered value investments.
Are Cryptos Considered Growth Investments?
Yes, because of their possibility for a strong return, cryptos are considered growth investments.
When Are the Best Times to Buy Cryptos?
There is no perfect time to buy cryptos. Like any asset class, investors should look for technical and/or fundamental signals for the best time to buy cryptocurrency.
Cryptocurrency ETFs
The prevalence of cryptocurrency exchange-traded funds (ETFs) may be one of the best arguments for belief that cryptocurrencies are here to stay. Investing in a cryptocurrency ETF gives investors exposure to a basket of cryptos along with the underlying blockchain technology that underpins cryptocurrency.
Cryptocurrency ETFs can be purchased like any stock which makes them an easy way for investors to get diversification within the sector. The largest cryptocurrency ETF in terms of assets under management (AUM) is the Amplify Transformational Data Sharing ETF (NYSEARCA:BLOK). The fund does not hold cryptocurrencies directly, but at least 80% of the fund’s assets come from companies that develop and use blockchain technologies.
Do Cryptocurrencies Pay Dividends?
Cryptocurrencies do not pay dividends.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.