3 cryptocurrencies to buy and keep forever

It’s been a tumultuous year in the cryptocurrency industry, with prices plummeting since the start of the year but rising this summer. Huge catalysts have arrived that will bring permanent changes to the second largest cryptocurrency and the world of cryptocurrencies. With all of this going on, it’s a good time to keep a long-term perspective and look at the top three cryptocurrencies to buy and hold forever.

Image source: Getty Images.

1. Ethereum

The merger, of Ethereum (ET 4.71%) the long-awaited transition from proof-of-work to proof of stake consensus was completed last week.

While it has become a common misconception that The Merge will speed up transactions on the Ethereum network and reduce fees, there will be other benefits. Switching to proof of participation will allow more Ethereum holders to participate to earn rewards from the network because they can now stake their Ethereum to earn a reduction in transaction fees. While holders must have 32 Ethereum and meet many other requirements to do so, many third-party services like Coinbase (CURRENCY -5.50%) allow customers with smaller amounts of Ethereum to stake their Ethereum in staking pools to earn interest. Coinbase currently pays an annual percentage return of 3.25% on Ethereum in staking.

The merger will also drastically reduce Ethereum’s carbon footprint, as energy-hungry mining equipment will no longer run night and day to produce Ethereum blocks. Some sources estimate that Ethereum’s pre-Merge power consumption was equivalent to that of a country like Chile. Experts predict that the move to proof of stake will reduce this energy intensity by more than 99%, which is a big deal. for the planet and for investors who may now feel more comfortable investing in Ethereum.

The great thing about keeping Ethereum long-term is that while The Merge is big business, the Ethereum developers don’t stop there. Vitalik Buterin, co-founder of Ethereum, estimates that the blockchain will only reach 55% of its potential after The Merge. The union paves the way for sharding, where the blockchain is split into many chains to relieve congestion on the network, which should ultimately help improve speed and reduce fees once fully implemented. The level of progress so far and the future ambition make Ethereum, the second largest cryptocurrency by market value, an asset to buy now and keep forever.

2. Bitcoin

While all eyes were on Ethereum prior to The Merge, Bitcoin (BTC 4.78%) it has rebounded fairly well, gaining around 15% since hitting a cycle low of $ 17,664 in mid-June.

After The Merge, Bitcoin, the No. 1 by market value, it will be the leading proof-of-work asset at the top of the cryptocurrency world. Bitcoin advocates consider Bitcoin’s proof of work consensus safer than proof of participation and believe The Merge will improve Bitcoin’s image as a secure decentralized network. I believe both proof of work and proof of stake have their merits and I consider owning both Bitcoin and Ethereum as the most sensible approach for investors.

Some have questioned Bitcoin’s status as an inflation hedge as Bitcoin’s price has dropped this year in part due to rising inflation in the US, but it’s important to remember that Bitcoin is a global network with users. worldwide. Despite this year’s decline, it still represents a viable and accessible safe haven for people in countries with rampant long-term inflation, such as Turkey and Venezuela. The maximum supply of 21 million Bitcoins is an interesting feature in a world where governments are printing ever larger quantities of currency, decreasing the purchasing power of the existing currency in the process. I don’t know if the price of Bitcoin will be higher or lower in a week, but I feel good about owning it as a potential hedge against future inflation and believe that all investors can benefit from having even a small amount in their portfolios. .

3. Ravencoin

With a market cap of $ 530 million and a ranking of 71 in terms of market cap, Ravencoin (RVN -1.97%) it is much smaller and less established than Bitcoin or Ethereum. There is therefore more risk when investing in Ravencoin, but there is also a substantial upside. Unlike Bitcoin and Ethereum, which are priced in the thousands of dollars, you can buy Ravencoin for around $ 0.06. Ravencoin posted a sparkling performance this summer, with a gain of over 50% in the past 30 days alone.

Ravencoin’s summer surge is because it is a proof-of-work cryptocurrency that can be mined with GPU (graphics processing unit) mining equipment. All the GPUs that were mining Ethereum needed somewhere to go after merging Ethereum, and Ravencoin is one of the coolest destinations. The Ravencoin hash rate has increased, indicating that the miners have already moved to Ravencoin.

A short-term catalyst is fine, but that’s why Ravencoin is so much more than just a short-term trade. Ravencoin was created with the purpose of allowing people to create their own tokens. Users can burn 500 Ravencoins and create their own token which represents a real world asset. An example of how this could be useful is real estate tokenization. A property owner could use Ravencoin to tokenize a real estate investment and split it into 100 pieces. This would give real estate investors significantly more liquidity than they enjoy today and lower the barriers to entry to invest in real estate.

Bitcoin, Ethereum, and Ravencoin are all good choices to buy now and keep forever. Cryptocurrencies are volatile and are best suited for risk tolerant investors. For these investors, buying the best cryptocurrencies now while the market is uncertain is a move that could pay off in the long run.

Michael Byrne has positions in Bitcoin and Ethereum. The Motley Fool has positions and recommends Bitcoin, Coinbase Global, Inc. and Ethereum. The Motley Fool has a disclosure policy.

Leave a Reply

%d bloggers like this: