Cryptocurrencies are mostly regarded as speculative assets and for good reason. They are highly volatile, due to their newness and the numerous factors influencing their value and leading to massive price swings, such as supply and demand, media hype, public sentiment, or government regulations. The risk of volatility is often rewarded with high returns, so many investors are willing to take their chance and add crypto to their portfolio in hope of making a quick profit. Many cryptocurrencies are also decentralized networks and lack regulations, creating a Wild West scenario. Looking at things from this perspective, it’s obvious why people frequently use digital currencies as an instrument of speculation.
However, cryptos can also be viewed through a long-term lens, and consequently, become viable investment tools. Even if the current Ethereum price can change at any moment and there’s no way to predict which cryptos are going to perform well and which will go under, one can overcome short-term volatilities by choosing coins that provide real-world utility and holding onto these assets for the long term in order to take advantage of their appreciation potential.
But with so many digital currencies in the market – over 12,000, to be more precise – it can be difficult to spot the best long-term cryptocurrencies, especially as we haven’t yet escaped the clutches of the cold, hard crypto winter which has disrupted investors’ plans and threw the entire crypto realm into chaos. Fortunately, crypto experts have already done the heavy lifting for you and rounded up the best long-term cryptocurrencies to add to your portfolio in 2023.
Bitcoin
No surprise here – Bitcoin remains the top option for long-term investments, being the oldest and most valuable digital currency in existence by market cap. Initially designed as an alternative medium of exchange that could help people circumvent traditional financial institutions, enabling instant peer-to-peer transactions and banking the unbanked, Bitcoin ended up being used by investors in long-term buy-and-hold strategies.
But what exactly makes Bitcoin a suitable long-term investment? Well, it’s no small thing that Bitcoin accounts for over 40% of the total market cap at the moment. Also, the fact that it has the first-mover advantage helped Bitcoin become a household name, synonymous with the cryptocurrency industry. People trust Bitcoin because of its track record and reputation, and as a result, they regard it as a safer and more reliable investment option. The king of crypto has already proven its power and resilience over its 14-year history, surviving each and every bear market and bouncing back stronger while still keeping its crown.
It’s also worth mentioning that Bitcoin enjoys greater adoption than any other digital currency out there. Numerous big-name companies such as Microsoft, Burger King, PayPal, The Home Depot, Twitch and Rakuten already accept Bitcoin payments, and an increasing number of businesses are adding Bitcoin to their investment portfolios.
Then there’s the regulation issue that raises many concerns among crypto enthusiasts. The prevalence of digital currencies has prompted governments to work towards developing regulatory frameworks for digital assets, but so far these regulations mostly target Bitcoin. Since the level of regulation will have a big influence on crypto adoption, Bitcoin is better positioned than its peers to reach mainstream acceptance. And if Bitcoin manages to enter the mainstream at one point and starts competing with fiat currencies, as some pundits predict, its value will most likely skyrocket, in which case adding it to your holdings right now could help you earn substantial returns in the future.
Ethereum
Although Bitcoin is the biggest player in the crypto sphere right now, it’s not the only coin to catch investors’ attention. As the second-largest cryptocurrency by market cap, Ethereum is another noteworthy option for long-term investments that, just like Bitcoin, has managed to stay at the top of the crypto pyramid since its inception.
However, Ethereum’s strong suits differ from Bitcoin’s. Ethereum’s main selling point is represented by its utility. Being a decentralized blockchain platform, Ethereum has its own native cryptocurrency called Ether which can be used as a method of transaction and a store of value. But the network also boasts smart contract functionality which facilitates the development of a host of other applications such as NFTs, decentralized finance (DeFi) dApps, or initial coin offerings (ICOs).
Sustainability is another area where Ethereum surpasses its competition. After completing the biggest upgrade in its history, colloquially known as the Merge, Ethereum managed to cut its energy consumption by up to 99%, thus addressing one of the biggest issues that plague the cryptocurrency industry nowadays. For all these reasons, investing in Ethereum, or better said Ether, can be considered a suitable long-term investment.
Other noteworthy cryptos
One would expect Bitcoin and Ethereum to be in the lead when it comes to long-term investing given their popularity and track record, but there’s definitely more to crypto than these two assets. Out of all the remaining options, there are two that stand out the most: Cardano and Polygon.
Cardano is an open-source blockchain platform, with ADA as its native coin, and has a high market capitalization. Cardano resembles Ethereum in many ways, including in using a proof-of-stake (PoS) protocol to validate transactions. However, Cardano began using a PoS consensus mechanism before Ethereum switched from the energy-intensive proof-of-work to reach a similar level of sustainability. As a result, Cardano became quite popular among investors and its following upgrades made it an increasingly appealing investment.
Polygon is another crypto to watch out for if you’re in for the long term. As a cryptocurrency and a blockchain scaling platform, Polygon aims to develop a multi-chain blockchain ecosystem compatible with Ethereum. This association already gives Polygon a great head start in the crypto race. The fact that Polygon partnered up with big brands like Disney and Starbucks to bring innovative ideas to life goes to show that great things can be expected from this platform.
If you intend to buy and hold crypto for the long term, these options can help you start your investment journey on the right foot and enjoy great benefits in the future, so you might want to add them to your wish list.
