It can be difficult to discover the best cryptos as the market remains in flux.
The cryptocurrency market will continue to ebb and flow with proxies of the overall economy. The result is a crypto market capitalization that hovers around $830 billion, far below the $2.2 trillion at which it began 2022.
Now more than ever, it’s important to seek utility when considering looking for the best cryptos. The collapse of FTX has put the risks of crypto into sharper focus.
But don’t fret, all crypto isn’t a scam. Real-world utility is continuing to be built as you read this. The best cryptos provide utility and lower risk with established names.
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Bitcoin (BTC-USD) is, simply put, the easiest investment in crypto to make.
It has gained a tremendous amount of exposure because it has become synonymous with crypto in general.
That association has resulted in Bitcoin becoming one of the perennial best cryptos to buy. Its market cap of $324 billion means it accounts for roughly 40% of the $830 billion in capital invested in cryptocurrency.
Investors who believe in a crypto resurgence should bet on Bitcoin first. It is the bellwether for the overall market. It is the most important cryptocurrency that exists, period.
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The argument in favor of Cardano (ADA-USD) should be stronger than ever right now: Cardano is first and foremost, a science-first, evidence-based development of blockchain technology. It is also one of the best cryptos to buy because of its utility.
Investors have seen multiple high-profile failures in the crypto space this year. Those projects were based on fear of missing out and not evidence.
Investors should be increasingly drawn to evidence-based projects. Cardano is founded on peer-reviewed research. That should ensure that Cardano’s development avoids the chicanery that has marked many of the crypto projects that have gained popularity.
Cardano has a chance to emerge as a truly revolutionary crypto project. It costs 35 cents currently. If it sticks to its principles – there are no indications it won’t – then it is likely to create something with long-term utility that will multiply in value.
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Ethereum (ETH-USD) remains a seminal project in the cryptocurrency space. Given its cheap price, now is arguably a good time to buy it.
Ethereum is blockchain-based software that allows smart contracts to function. Those smart contracts are programs that trigger events to occur when a predetermined set of conditions are met. This all relies on ETH, the coin that fuels Ethereum.
The reason Ethereum is one of the best cryptos to own is that it will be the dominant force that fuels the ongoing development of Web3.
That means investors are buying a portion of the fuel for the next iteration of the internet that will attempt to decentralize power and lead to overall improvements in theory.
Another practical reason to like Ethereum is that the firm recently switched its consensus mechanism to a proof-of-stake protocol that will use much less energy to mine new coins. The result is much less environmental harm.
XRP (XRP-USD) has been embroiled in a legal battle with the U.S. Securities and Exchange Commission (SEC) since 2020. That battle should end very soon and all indications are that Ripple, the company behind XRP, will emerge victorious.
The story behind the court case revolves around the SEC’s assertion that XRP is a security. The potential nail in the coffin of the SEC argument might have already been handed down when the SEC was ordered to surrender the “Hinman documents.”
The SEC had long refused to surrender the files that contained the influential opinion of former SEC Director William Hinman. In those documents, he stated that he believed ETH was not a security, implying by extension that XRP is also not a security.
Summary judgment motions have been filed by both Ripple and the SEC after the documents were admitted into evidence on Oct. 20. Ripple CEO Brad Garlinghouse expects a judgment by early 2023 so buying and waiting will likely pay off quite quickly.
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Polygon (MATIC-USD) is a safe bet to make in the cryptocurrency space.
Most of its value comes from the fact that it has utility in scaling the Ethereum network.
It is what is referred to as a “layer 2” scaling solution for Ethereum. It is a side chain that runs parallel to Ethereum but does so at a greater TPS (transactions per second) and at lower transaction fees.
As long as Ethereum’s TPS figures remain lower than its competitors, Polygon will continue to have inherent value. Ethereum’s current TPS hovers somewhere between 20 and 30.
Ethereum’s merge was expected to dramatically increase TPS among other functional metrics.
Given the fact that Ethereum’s merge has already taken place, and its TPS remains low, investors can safely assume that Polygon will continue to have real-world utility in the opaque world of crypto.
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Polkadot (DOT-USD) has lost a lot of value in 2022. In fact, its value has fallen more than 78% at the time of writing.
That said, the basic premise for Polkadot’s utility remains as strong as ever: It works to connect disparate blockchains, facilitating the transfer of data from one to another.
That’s what Polkadot is really looking to facilitate: the transfer of data between blockchains., which will allow new applications to be built, increasing the value of crypto overall. Facilitators in the transfer of data are inherently valuable which is why DOT is a buy.
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Chainlink (LINK-USD) is a lot like Polkadot in that it is an abstraction layer for universally connecting smart contracts.
Chainlink’s purpose is to facilitate secure interaction between disparate blockchains so that data can be transferred in between.
Chainlink has suffered in 2022, losing more than two-thirds of its value year-to-date. Chainlink allows off-chain data to be integrated into smart contracts. That allows all kinds of programs to be built around the data, enabling greater utility.
Again, Chainlink’s current value lies in the philosophical underpinnings of the company and what it is attempting to do. It relies on belief in its objective and the team it can assemble to make that a reality.
Fortunately, there’s positive news on that front: Its advisory board reads like a who’s who of Silicon Valley including former Google (NASDAQ:GOOG) CEO Eric Schmidt, former LinkedIn CEO Jeff Weiner and DocuSign (NASDAQ:DOCU) co-founder Tom Gonser.
Those connections should ensure that Chainlink has the best resources available in developing real-world utility and connecting data across blockchains.
On the date of publication, Alex Sirois 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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.