The crypto markets are down by almost 50% from the recent bull run. Bitcoin prices declined 46% from the peak of $64,800 and is presently trading at around $35,000.
You may consider this as an investment opportunity or feel numb due to the fear of losing money. Anything can happen in the short run in the crypto market.
If you are looking to create a crypto portfolio for a long term period (3 to 5 years) from scratch then you can consider the below cryptos –
- Best Store of Value – Bitcoin (BTC)
- Top Defi Platform – Ethereum (ETH)
- Best Alternative to Ethereum – Cardano (ADA)
- Best Exchange Utility Token – Binance Coin (BNB)
- Best to Allow Interoperability Among Chains – Polkadot (DOT)
- Decentralized storage solution – Filecoin (FIL)
- Decentralized wireless solution – Helium (HNT)
- Best for High-speed Transfers – Stellar Lumens (XLM)
- Best Crypto with Growth Potential: Chainlink (LINK)
- Best for Private Transaction (Privacy) – Monero (XMR)
The above cryptocurrencies are a representation of some of the most promising startups and blockchain projects in the world today.
The above list of cryptocurrencies is selected based on the unique value proposition of the underlying blockchain projects.
The cryptocurrencies listed have a good chance to potentially be the future utility tool and revolutionize financial transactions. But do your own research and consult experts before making an investment decision.
#1. Bitcoin (BTC)
Bitcoins is the first cryptocurrency that was created as a digital form of money that uses blockchain technology. Bitcoin is now legal tender i.e. the official currency of the central American country – El Salvador
Bitcoin is one of most valuable crypto because it allows peer-to-peer payments without the need of any financial intermediaries like banks and is not controlled by any central authority like RBI.
As of June 2021, the total value of existing Bitcoins exceeds 600 billion US dollars. Out of which $50 billion is exchanged daily.
The present user base includes –
- Retail food chains like Burger King, Subway and KFC
- Tech companies like Microsoft
- Airline and travel portals like CheapAir, Virgin Airlines, Norwegian Air
- Others – Wikipedia, Namecheap
- Online Retailer like Overstock
Going ahead an increasing number of people and businesses will trust Bitcoin for payments. In fact, several businesses like Tesla, PayPal, and Square made announcements to accept cryptocurrencies for transactions.
With 21 million of fixed limited supply, Bitcoin is accepted as both a store of value like gold and as a payment medium.
Bitcoin commands 41% of the total crypto market capitalization and has a strong community following. But the Bitcoin prices are highly volatile.
You can allocate 20% to 25% of your crypto portfolio to Bitcoin.
Reason to Buy – Well established cryptocurrency, Wide Support, Seen as a Store of Value
#2. Ethereum (ETH)
Ethereum uses blockchain technology to help create Dapps (Decentralised Apps) and Smart Contracts.
The Dapps and smart contracts allowed developers to build decentralized financial (DeFi) products. Until now which was not possible with the Bitcoin blockchain.
Ethereum is valuable because it moved ahead from a payment mechanism of Bitcoins and opened up the world of financial products like – borrowing, lending, trading and staking.
Ethereum helped the creation of an alternative to the current financial system that is open-source and decentralized.
Today there are over 200 DeFi products that include –
- Asset management tools like – Alpha Wallet & Zerion
- Savings Apps like – Linen app and Voluto
- Derivatives like – Hegic and Synthetix
- Decentralized Exchange like – Uniswap and Curve
- Decentralized lending like – Aave and Compound
The total value locked in all the DeFi applications is around $58 billion with more to come in near future.
Ethereum has a market capitalization of around $400 billion almost comparable to Visa ($504.75 billion) and JPMorgan Chase ($478.49 billion).
You should look to allocate 10 to 15% of the crypto portfolio in Ethereum. .
Reason to Buy – Alternative financial system, a Growing ecosystem of DeFi and strong community.
#3. Cardano (ADA)
Cardano was first released in 2015 with a goal to set up a decentralized financial products ecosystem similar to Ethereum. The DeFi applications based on Cardano smart contracts are due for release in 2021.
Cardano is promising because it solves various problems plaguing Ethereum like processing speed and transaction cost.
A brief comparison of both Cardano and Ethereum is below-
|Processing Speed||20 transactions per second||Over 1000 transactions per second|
|Gas fees (transaction cost)||Around $12.95||Around $0.2-0.3|
|Protocol||Proof of Work||Proof of Stake|
ADA is the coin of the Cardano blockchain with a total market cap of around $50 billion.
You should look to allocate 10 to 15% of the crypto portfolio in Cardano.
Reason to Buy – Staking options, Biggest Ethereum Competitor
#4. Binance Coin (BNB)
BNB is a utility coin launched by Binance – the world’s largest cryptocurrency exchange based on trading volumes.
You can use Binance coins (BNB) to pay for transaction fees when you trade on the Binance crypto exchange. BNB coins get you a 50% discount on the trading fees.
BNB coin is built on the Binance blockchain and has a $54.6 billion market capitalization.
The Binance blockchain supports Binance’s decentralized applications like the Binance exchange and the Binance Trust Wallet.
The growing Binance ecosystem includes Binance Academy, WazirX exchange, Institutional Services and Binance Research insights on top crypto projects.
Can allocate 5% to 10% of the crypto portfolio in Binance Coin.
Reason to Buy – Growing Binance network, DeFi functionality, Ethereum competitor.
#5. Polkadot (DOT)
Hundreds of blockchain are created in isolation without the ability to communicate with each other. For example, till now there was no mechanism where a Bitcoin blockchain can communicate with an Ethereum blockchain.
Polkadot is a bridge-like protocol that aims to provide interoperability (meaning communication and value transfer) among various blockchains.
Polkadot is designed to connect multiple blockchains to work seamlessly side-by-side within its single network.
The DOT token is native to Polkadot protocol with a market capitalization of $22.2 billion and can be used for –
- Financial transactions
- Bonding of chains
Allocation – 2% to 5% of the crypto portfolio.
Reason to Buy – Integrating different blockchains and offering interoperability.
#6. Filecoin (FIL)
Filecoin is a decentralized file-sharing protocol that enables you to rent your spare computer storage space similar to Airbnb which lets you rent your vacant home space.
A unique valuable blockchain application that will remove central data storage used by Dropbox, Amazon S3, Microsoft and Google Cloud storage.
This means users like you and me can use Filecoin’s protocol to store files on the extra space available on our computers. And in turn, receive FIL coin as rewards.
Filecoin’s goal is to provide a cheaper, private and more efficient method to store sensitive files eliminating centralized, opaque and costly data storage.
Filecoin Market Cap – $5.6 billion
Portfolio allocation – 2% to 5% of the overall crypto portfolio.
Reason to Buy – Creating decentralized storage space.
#7. Helium (HNT)
The Helium Network (HNT) blockchain allows the decentralization of long-range wireless networks by using your wifi as a hotspot.
You can rent your extra wifi bandwidth to be used as a hotspot in the HNT network. In return, you will be rewarded HNT cryptos. The HNT wireless is currently operating in North America and is soon to be launched in Europe.
The HNT blockchain comprises hotspots that provide public network coverage for IoT (smart home devices) devices.
This will create a new wireless system challenging the traditional wireless infrastructure provided by the present telecom companies.
You can put 2% to 5% of your crypto portfolio in HNT.
Reason to Buy – Building a decentralized wireless economy.
Also read – WazirX vs Zebpay
#8. Stellar (XLM)
$50,000 USD is the average large value B2B cross-border transaction size. Transferring such a huge amount takes 2-7 days, involving a number of intermediaries, and costs a lot in commissions and bank fees.
Stellar blockchain is an open network designed to provide fast and cheap large-value B2B cross-border payment solutions.
Stellar does this by connecting global financial institutions like big banks and investment firms.
Lumens (XLM) is the cryptocurrency of the Stellar blockchain. You need to hold Lumens to make a cross-border transaction on the network.
Stellar commands a market capitalization of $7.9 billion. You can keep 2% to 5% Stellar in your crypto portfolio.
Reason to Buy – Promising cross border bulk payments network
#9. Chainlink (LINK)
Chainlink (LINK) is a dapp build Ethereum that allows smart contracts to securely connect to external data sources, APIs, and payment systems.
Chainlink is like a bridge between blockchain’s smart contracts and outside applications.
Chainlink is valuable because it can be used to create smart contracts that can be executed based on real-world data points.
For example, a smart contract can be created to monitor water supply in cities.
The Chainlink blockchain water system will continuously monitor water consumption and the water tables using sensors.
Using the consumption and water table data, Chainlink smart contract will raise water bills, charge fines and give flood warnings.
The market capitalization of Chainlink is $10.3 billion.
Can allocate 2% to 5% to Chainlink of the crypto portfolio size.
Reason to Buy – Futuristic applications based on smart contracts & real-world data.
#10. Monero (XMR)
You can make anonymous crypto transactions using Monero.
Monero blockchain helps maintain transaction privacy in the crypto world where every transaction is traceable.
Monero was launched with a strong focus on complete privacy by using a special technique called “ring signatures.”
Where a group of cryptographic signatures appears while crypto transferring instead of a single signature.
The group has only one real signature, but the real signature is hard to isolate because all the signatures appear to be valid.
The non-traceability feature has also led to misuse of the Monero coin for illegal transactions.
Market capitalization – $4.8 billion.
You can put 2% to 5% of the crypto portfolio in Monero.
Reason to Buy – Private Crypto transactions
10 Cryptocurrencies to Watch in 2022
#1. Uniswap (UNI) – Largest decentralized exchange that facilitates automated trading of DeFi coins like 1Inch, Aave, Compound and DAI.
#2. Kusama (KSM) – Kusama is a testnet (i.e. developmental environment) that can be used in the same way as Polkadot, but is faster than Polkadot.
#3. Solana (SOL) – Solana promises a fast, secure and scalable blockchain that supports 50,000 transactions per second as compared to around 12 transactions handled by Ethereum.
#4. Maker (MKR) – Maker is the utility and governance token of the MakerDAO and the Maker Protocol. The protocol manages the development of the most demanded token DAI.
#5. Compound (COMP) – Compound is the governance token of the DeFi application – Compound. On Compound you can deposit tokens, do lending and earn interest.
#6. Cosmos (ATOM) – Cosmos allows separate blockchains to communicate, share data and transact with each other in a seamless manner.
#7. Polygon (MATIC) – Competitor to Polkadot & Cosmos. Polygon is a bunch of sidechains (similar to existing side roads parallel to highways) that developers can use to build dapps.
#8. Internet Computer (ICP) – Internet Computer (ICP) is a cryptocurrency that allows users to create apps, websites and other web-based services.
#9. Ripple (XRP) – Ripple blockchain is built as a fast bulk payment settlement, exchange and remittance system like RTGS in the real world.
#10. Basic Attention Token (BAT) – BAT is created on Ethereum blockchain for use on a specialized web browser “Brave”. On the Brave browser, you can earn BAT for viewing ads and publishers can use BAT to pay ad fees.
Cryptocurrencies projects have promising futuristic applications that are slowly entering real-world applications. The current crypto price movements are based purely on the expectations that the projects deliver as intended.
But they all cryptocurrencies are a high-risk, high-return investment asset class. You should invest money to the extent you are able to bear the price fluctuations.