Best cryptocurrencies to invest in 2022
There are currently more than 5,000 cryptocurrencies available, but less than 1,000 are actively traded on exchanges, and even fewer have viable economic prospects.
At the risk of making your head spin, here are the cryptos we’re currently watching. Before you take the plunge, ask yourself, “Which of these will be around in 10 years?”
Cryptocurrency markets are highly volatile, and as an investor, you have to have the stomach to tolerate dramatic price fluctuations.
If we’ve learned anything from the crypto market in 2017 and 2018, it’s that what goes up usually comes down – and many coins don’t come back!
Top 10 cryptocurrencies to buy in 2022
Bitcoin, Bitcoin Cash, Ripple, Ethereum, and Litecoin round out the top 5 cryptos. The current market capitalization of all cryptocurrencies is around $237 billion. Almost two-thirds of that is represented by Bitcoin and Ethereum.
1. Bitcoin
Bitcoin is the oldest and most recognizable cryptocurrency, and still one of the best investments you can make in crypto. Bitcoin is available on almost all cryptocurrency exchange platforms and is also the most widely accepted cryptocurrency for payment. Furthermore, because Bitcoin is so well-known, its price is considerably more stable than some of the newer coins on the market.
Nevertheless, Bitcoin’s age is also working against it. The technology behind Bitcoin is old and inefficient compared to newer cryptocurrencies on the market. It also faces regular criticism for the negative environmental impact of mining and using Bitcoin.
More: Start buying and trading Bitcoin and other cryptocurrencies
2. Ethereum
Ethereum was developed by Russian techie, Vitalik Buterin, in 2015 and carried a current market capitalization of around $40.6 billion. Ethereum was built for creating “smart contracts,” which are ‘If/Then’ commands. It could be something like, “If Sally is never late for work, then she gets paid $xx,” or if you input certain data, you’ll get a soft drink.
When you put many smart contracts together, you get decentralized applications (dApps). dApps are tamper-proof as they directly connect the user and provider, cutting out the middle agent who stores and controls the information (think Gmail). The vast majority of cryptocurrencies are actually dApps that run on the Ethereum blockchain. As of April 2021, Ethereum has started to enter the mainstream with its appearance in a few new ETFs on the TSX, giving Canadians another way to purchase this cryptocurrency.
3. Dash
Dash has a simple mission: becoming your digital cash. The coin was created in 2014 and plans to compete with credit cards and PayPal as a method of payment wherever you shop. The coin prides itself on facilitating instant, low-fee transactions. Dash has a promising future as retailers online and off expand their acceptance of cryptocurrencies as a form of payment.
4. Litecoin
Litecoin was launched in 2011 and co-founded by a former Google engineer. It allows for fast, low-cost global payments through its decentralized network. It’s supposed to be a faster version of Bitcoin with a larger supply of coins, which led it to often be likened to “the silver to Bitcoin’s gold.” While a very popular choice next to Bitcoin and Ethereum in 2017, it hasn’t hit quite the same recovery as those coins in 2020. Nevertheless, its technical advantages and credibility make it a likely long-term contender in the world of crypto.
5. XRP
XRP is the native cryptocurrency designed for use in the Ripple network. Ripple was launched in 2012 and is based in San Francisco, with offices in 27 countries. It focuses on multi-currency transactions, which are cheaper and faster than Bitcoin. By the end of 2017, the company already had more than 100 international banks signed up to its platform, RippleNet. Ripple is estimated to have a market capitalization of $332 billion.
6. Dogecoin
Dogecoin (DOGE) has been one of the most popular and volatile cryptocurrencies. Its surge in value came as a surprise because it was never meant to be taken seriously. Dogecoin is a meme coin. It pokes fun at internet culture and cryptocurrency, but it’s made plenty of investors seriously rich. Dogecoin will likely never become a legitimate cryptocurrency for asset storage or transactions, but its volatility and character mean it’s likely to stick around for a while, just for fun.
7. Tether
Tether (USDT) is a unique cryptocurrency because its value is “tethered” to the US dollar. Every Tether coin remains valued at US$1.00, insulating it from the major price fluctuations characteristic of most cryptocurrencies. This has earned it a characterization as a “stablecoin” and may pave the way for the digitization of the U.S. dollar in the future. Tether is a great option for those looking for a stable cryptocoin to store value in.
8. Binance Coin (BNB)
Binance Coin (BNB) was launched in mid-2017 by the Binance Decentralized Exchange or DEX. You can buy and sell thousands of different cryptocurrencies on the DEX, but users get a discount if they pay fees with Binance. Since DEX is the largest cryptocurrency exchange in the world, this incentivizes users to trade Binance, ensuring its longevity and growth.
9. Cardano
Cardano considers itself “third-wave” cryptocurrency technology, behind Bitcoin and Ether. The Cardano blockchain runs with its coin, ADA, and means to compete directly with Ethereum. Like Ethereum, Cardano also runs dApps with smart contracts but aims to be more scalable and efficient.
10. Polkadot
Polkadot is a unique cryptocurrency that has gained extraordinary ground in 2021. Using Web 3.0 technology to create a multichain architecture, Polkadot makes different blockchains able to interact with each other. Its focus is to create consensus, interoperability, and shared security between multiple blockchains. Furthermore, the technology can be automatically updated without the need to fork like other cryptocurrencies.
How to identify the next big cryptocurrency
The best way to understand cryptocurrency is to recognize that it’s much more of a technology than it is a currency. Think about how much the internet has changed since its advent in the 1990s. The first rendition of the internet with static webpages was Web 1.0 technology. When it became more interactive with users adding content, particularly through social media, that was Web 2.0 technology. Blockchain and cryptocurrency are Web 3.0 technology.
Use this analogy: consider Bitcoin the same way you would your very first PC. Innovative, but now a little slow and clunky compared to your new laptop or mobile phone. Bitcoin is your PC, Ethereum is your laptop, and altcoins are comparable to mobile phones and tablets. You’re probably not going to get rid of your desktop computer or your laptop, even though you have a cellphone now, just like you shouldn’t sell your Bitcoin or Ether. It’s hard to know which new smartphone or tablet to get because there are new ones every year, and the technology is changing so fast. You choose one that fits your needs and maybe even try owning both a mobile phone and a tablet.
So, what is the next Bitcoin? There is no “next Bitcoin” because it was the first cryptocurrency, and it will always be the first cryptocurrency. However, there are new and different cryptocurrencies with unique features based on brand-new technology. This new technology will have applications and uses we can’t even dream of yet!
Investing in cryptocurrency isn’t about investing in a financial asset. It’s about investing in new technology and the future it will usher in.
Where do I buy cryptocurrency?
You can’t buy Bitcoin from your local bank or even on the stock exchange with your brokerage account. To buy and sell cryptocurrency, you need a digital wallet and platform that allows you to trade crypto.
Wealthsimple Crypto
Wealthsimple launched Wealthsimple Crypto, which allows you to buy and sell digital currency using their platform. If you’re already a Wealthsimple Invest or Wealthsimple Trade customer, you’ll recognize the same stellar user experience with the Crypto platform.
Wealthsimple recently added several new altcoins to their platform. In addition to being able to trade Bitcoin and Ethereum, you can now trade Dogecoin, Litecoin, Bitcoin Cash, Chainlink, and more. Wealthsimple is constantly innovating and adding features to its platforms, so we can expect even more cryptocurrencies to be supported in the future.
Start buying and trading crypto with Wealthsimple Crypto.
Coinsquare
If you find the Wealthsimple Crypto selection too limiting, Coinsquare is your next best bet. Coinsquare supports all major coins such as Bitcoin, Ethereum, Litecoin, Ripple, and more. You can build a much more well-rounded cryptocurrency portfolio on this platform.
Coinsquare stands out above competitors for its ultra-low fees, but new deposits are subject to a seven-day hold. With cryptocurrency prices so volatile, a full week’s hold feels like an eternity when you’re waiting to invest!
Coinbase
Coinbase is another great choice if you’re looking for a cryptocurrency platform that supports several different coins. Not only can you buy Bitcoin, Ethereum, and Litecoin, you can also pick up altcoins like Chainlink, Dash, EOS, and Tezos.
Coinbase will let you buy a fixed amount of cryptocurrency on a weekly or monthly basis, making it easy to automate your investment portfolio. You can even directly charge a credit card, making it easy to fund your account and even earn credit card rewards on your cryptocurrency purchases. This convenience comes with a downside. Coinbase charges very high fees compared to its competitors, charging US$0.99 to US$2.99 per trade. If you’re buying bitcoin with a debit card, expect to pay 3.99% in fees. Yikes!
Final thoughts
When it comes to investing in cryptocurrency, there’s still tremendous risk and volatility involved. However, a few coins have shown they’re likely here to stay.
If you’re investing in cryptocurrency, make sure it fits with your overall investment strategy. Just like you wouldn’t invest all your money in a single stock, you shouldn’t put all your money into a single coin. Diversify your investments in cryptocurrency, and be sure to stay invested in the traditional stock market while you do so. Finally, you should also confirm you’re privy to the latest crypto trading tips and best practices before you start buying and selling.
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