What's The Best Cryptocurrency To Invest In?

Romj Amon
Romj Amon

Updated · Oct 16, 2022

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Cryptocurrency use has exploded in the last few years, to put it mildly. 

Unfortunately, more often than not, digital currencies end up not reaching the potential their developers touted.

With that in mind, it is not an easy job finding the best cryptocurrency to invest in — especially if you are a newbie. 

So, in this article, I will give a rundown of the best choices to put your money into and why.

What is a Cryptocurrency? 

Before we dive into the top cryptocurrency options on the market, we first need to discuss the definition of the term.

Cryptocurrency is digital or virtual currency typically built on blockchain technology and secured by cryptography.

Both crypto and regular money share a significant similarity: they can be used as means of payment and as stores of value.

However, there’s a big difference between cryptocurrency and fiat money, apart from it being wholly digital. The former gets its value from its native blockchain while the latter is a legal tender with its supply controlled by a central banking authority.

But, as El Salvador has shown, this does not mean that cryptocurrency cannot be a legal tender.

So, crypto is definitely here to stay.

There are thousands of coins and tokens - with more seemingly created every day. The global blockchain market is expected to reach $23.3 billion by 2023. Considering this, it is likely you want to know the best cryptocurrency to buy so you don’t miss out.

Well, let’s get down to it.

What’s The Best Cryptocurrency to Invest in? 

There is a ton of opportunity to make significant returns on investment with cryptocurrency. Nevertheless, the reality is that the reverse could easily be the case, as the #cryptocrash demonstrated. 

The crypto market has seen a downturn in 2022 that has shocked millions of investors. However, the market’s volatility means that where there is a high risk, there can be a high reward.

The tokens on this list are not immune to booms and plunges. Still, with proper risk management, they have the technology, execution, and adoption progress to count as valuable investments.

1. Bitcoin (BTC)

If you decided to invest in crypto twelve years ago, you wouldn’t have had to worry about what cryptocurrency to buy.

Why?

Because at that point, there was only one coin available anyway. 

And that was Bitcoin.

Satoshi Nakamoto introduced Bitcoin in 2009. It spent several years underground (including a period as the unofficial currency of the Dark Web) before picking up steam.

So, what makes Bitcoin a good cryptocurrency to invest in?

Its position is underlined by both its price and capitalization, the highest in the market. Besides cementing its status, this means that Bitcoin is not as volatile as most other coins and hence not as easily manipulated.

Its first player standing and widespread adoption mean that more and more businesses consider Bitcoin a valid means of payment.

Furthermore, it has a very high level of liquidity. This means that even as a beginner, you would have no trouble buying or selling the coin — there will always be someone ready to match your order.

Some investors consider Bitcoin too safe, and so - a waste of time. But while it is not normally as volatile as many others, there is no doubt that it has a high return potential. 

You’ve probably heard before that if you invested $1000 in Bitcoin ten years ago, you would be a millionaire today. Granted, that opportunity is long past. Still, with a fixed supply of 21 million coins inching closer, chances are that the value of whatever bitcoins you buy now will be substantially higher in the future.

Throw in market share and it is case closed. With nearly half of the crypto market cap, you cannot go wrong owning some of that currency.

2. Ether (ETH)

Bitcoin may be the king of cryptocurrency, but Ethereum is second in command. And this is not just because it has the second-largest market capitalization.

Ethereum is an open-source blockchain platform with vital, far-reaching applications. One of these is smart contracts, programs that permit decentralized transactions and agreements. 

It also allows for the building of decentralized apps. DApps are blockchain-based apps powered by smart contracts that run on distributed peer-to-peer (P2P) networks. 

But that’s not all.

Ethereum also serves as the foundation for non-fungible (NFTs) and security tokens, and the creation of entirely new cryptocurrencies with the ERC-20 standard.

To interact with any of these applications, you need the Ethereum digital currency Ether (ETH), a highly liquid token. Developers and regular people can use ETH to:

  • Carry out financial transactions as with Bitcoin
  • Make smart contract payments
  • Create, buy, and sell NFTs
  • Create and run applications on the Ethereum blockchain
  • Pay for transaction fees for ERC-20 tokens
  • Create new ERC-20 tokens

But there is another reason you may consider Ether a top cryptocurrency to invest in. With an upcoming upgrade, Ethereum is switching from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus.

Don’t worry if this sounds too technical. 

Essentially, when complete, it will make the currency more scalable, boost its security, and make it more sustainable and environmentally friendly. A derived benefit of this will be the reduction of gas fees, required to complete all Ethereum transactions.

But more significantly, it is bound to increase the value of the ETH you hold.

3. Cardano (ADA)

A third-generation token, Cardano was introduced in 2017 by Charles Hoskinson, an Ethereum co-founder. 

Since then, it has raced past most other cryptocurrencies to stake a position in the top 10 coins by market cap. The best time to invest in this crypto would have been 2021 when it climbed by more than 700%. 

But don’t think you have lost out — Cardano is still a relatively new blockchain.

Like Ethereum, the Cardano network provides a platform for developers to build DApps using smart contracts on the blockchain. This offers real-world utility that stretches from gaming to finance and more. 

For instance, Cardano struck a partnership with Ethiopia to create blockchain-based identities for 5 million students. This is perhaps the single largest entity blockchain deployment ever.

Then there’s the speed. 

Right now, the Ethereum network can only process about 30 transactions per second. Cardano blows that out of the water with approximately 250 transactions per second.

And it is going to get so much faster with the Hydra layer-2 system

That upgrade will dramatically boost the processing time for ADA transactions. With this speed, the token will find even more use in decentralized finance.

It’s dubbed the Ethereum killer, but Cardano is still some way off from catching up to that network. Still, its attempt to do so certainly makes this one cryptocurrency to buy.

4. Tether (USDT)

The next token on this list of the best cryptocurrency to invest in is the odd one out.

How so, you ask?

Well, it is a stablecoin.

If you don’t know what that means, a stablecoin is a token that has its value pegged to a fiat currency, commodity, or another cryptocurrency. In this case, Tether is pegged to the United States dollar.

This means that one tether token maintains parity with one dollar. More or less, that is, because it is still a cryptocurrency and so you cannot count out volatility. 

There are quite a few stablecoins, but USDT is the largest of them all in terms of market capitalization and the number of users. In fact, it is one of the top 5 cryptocurrencies by valuation, according to CoinMarketCap.

You may be wondering why investing in a stablecoin would be a good idea.

The United States has struggled with inflation lately and this has had far-flung consequences. Still, the dollar is a relatively stable currency in comparison to many others across the world. If you buy Tether, you will be leveraging on that to hedge your funds against high inflation in your country.

Furthermore, holding USDT can save you from costly transaction and withdrawal fees that come with converting crypto to fiat money. It can also earn you interest when you deposit the stablecoin into a cryptocurrency exchange or lending platform.

With all said and done, Tether is not the best option if you are looking to significantly build your wealth using crypto. 

5. Polkadot (DOT)

Is it too late to buy Polkadot in 2022? 

That is certainly a valid question, especially if you have any idea how well that token did the year before. Only launched in 2020, it is easily one of the fastest-growing coins and has risen high up the cryptocurrency ranking.

Polkadot is what you could describe as a blockchain for blockchains. It is a protocol that facilitates cross-blockchain transfers of values and data.

What does this mean?

The lack of interoperability has always been a blockchain problem. You can see it as a language barrier that exists between different blockchains.

Polkadot attempts to tackle that issue. It enables trustless communication between various blockchain ecosystems. While these chains maintain their independent governance, they get united or pooled security, overcoming scalability security concerns.

Many consider this protocol as a key to the decentralized web, or Web 3.0.

That disruptive utility is one of the reasons why the Polkadot network and the DOT token are attractive to investors.

Additionally, DOT holders can stake their tokens on Ankr StakeFi and earn passive income.

6. Binance Coin (BNB)

Rounding up this list of the best cryptocurrency to buy is BNB, the utility token for Binance, the world’s biggest crypto exchange. It is also a Binance Smart Chain (BSC) utility token. BSC is the exchange’s blockchain network developed with DeFi as a core focus.

So, what makes it one of the best coins to invest in?

To begin with, let us consider the benefits that come from holding it on the most popular exchange.

Holders get a 25% discount on all spot trading and margin trading fees when paying with BNB on Binance. This can add up to a substantial saving over time, especially if you are very active on the platform.

Additionally BNB users can earn commissions through Binance’s referral program. 

There are several other benefits, such as access to crypto loans and qualification for VIP programs.

Since Binance and BNB launched in 2017, the exchange has committed to a program that will remove about half of the tokens in circulation through burning. Every quarter, Binance buys back tokens with 20% of its profit and permanently pulls them out of circulation.

It does this by transferring the tokens to a “dead” cryptocurrency wallet. The private key to this wallet is never stored, and hence it is not accessible to any entity.

What purpose does this serve, you wonder?

Burning is a deflationary measure that triggers an increase in the value of a coin, BNB in this case. It is what makes it one of the best cryptocurrencies you can invest in.

When to Buy and Sell Crypto? 

In 2021, BNB gained roughly 1,344%. In simple terms, this means that if you have invested $100 in the token by the 1st of March, you would have ended the year with $134,000.

Not bad at all!

If you have invested the same amount at the same time in Ethereum, it would have yielded a more modest $45,000 return.

On the whole, the cryptocurrency sector’s total market cap grew by 187.5% in 2021.

Say you missed out on that bull market. You decided to make similar investments in the top cryptocurrencies of 2021 at the beginning of the new year.

By May, you would be running at a loss across the board

This is why crypto investing is such a high-risk endeavor. Even most experts get it wrong when it comes to predicting the direction of the market.

Buy low, sell high. In theory, that mantra makes much sense. In the real world, though, that is easier said than done. Timing the crypto market to make perfect entries is an incredibly challenging task.

So, if you are interested in investing in cryptocurrency, what should you do?

For one, you can take up strong investments and hold them long-term. If a crypto project proves worthy of your trust, it will conquer market conditions and give you returns on your investment. 

This means that your $100 investment could reduce to $50, but over time, it could rise much higher. 

In the case of a stablecoin like Tether, it will maintain its peg.

Another strategy is one called dollar-cost averaging (DCA). With this strategy, first you consider which cryptocurrency to invest in. When you have made your choice, you invest a set amount of money into that project following a set schedule.

Dollar-cost averaging does not consider the current price of a digital token but maintains a long-term outlook.

There is another aspect to investment that you must not overlook. 

Selling. 

As much as it is important to keep a long-term mindset, you should consider occasionally taking some of your profit along the way. After all, taking profit is the only moment when you actually realize one. A floating profit can easily turn into a loss in this unstable market.

Wrap Up 

Investing in cryptocurrencies is not always the get-rich-quick scheme that it is sometimes touted to be. At least not for those who miss the early train.

And even if you do, the crypto market crash of 2022 is enough proof that there is no complete understanding of this sector.

That said, despite its ups and downs, you can certainly make decent returns on your investment. The first and most important step is to know which crypto to buy. Then you can apply a fitting strategy.

May the Force be with you!

FAQ.


Is it smart to invest in Cryptocurrency?

Cryptocurrency is not simply a fad. It is a fact that digital currencies (and their underlying technologies) will play significant parts in the futures of, not just the internet, but countless industries. This implies that making the right choices and applying proper risk management while investing is a smart move.

Is Ethereum better than Bitcoin?

Ethereum and Bitcoin are two of the best cryptocurrency to invest in. That said, they serve different purposes. Understanding their disparities and what aligns with your investment plan is instrumental in deciding which to go for.

Which cryptocurrency is best to buy now?

To put it mildly, 2022 so far has been a chaotic year for crypto investing. But that does not completely count out making smart advances in the market. You can invest in any of the cryptocurrencies discussed above.

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Romj Amon

Romj Amon

Romj is a veteran copywriter who used to be a Jack of all trades. Now, he's trying to be a master of one: technology. He jumps down the rabbit hole to size the latest innovations up. As a content contributor for TechJury, he hopes to help you keep up in our fast-paced world with his discoveries.

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