If you’re new to the cryptocurrency investment space, it’s perfectly normal to wonder about the best crypto to invest in. Like with traditional stocks, the answer can vary based on your age and risk tolerance. In this article, we’ll go over some of the most popular cryptos to invest in, and you can decide which cryptos to pick based on your needs.
Investing in Bitcoin
Bitcoin is the cream of the crop, the cryptocurrency with the longest history, over 10 years since it was created, and the largest market cap. It’s very often known as “digital gold” as holders often buy and hold it, versus spending it like a currency.
Bitcoin is one of the decade’s most profitable assets, up from $108.25 in November of 2015 to as high as $40,258 in January of 2021, beating out some of the most profitable stocks for investors like Netflix and Amazon. Assuming the asset continues this route, long-term holders could profit significantly in another five to ten years.
In the short-term, volatility can benefit day traders. Investors will see Bitcoin and Ethereum are very volatile, like most other cryptocurrencies. They can buy the lows and sell the highs, which often range quite greatly daily. This is typically riskier than holding long, but the right trader can potentially profit.
Of course, those looking to mitigate risk can also invest in a cryptocurrency IRA with us. We offer long-term, tax-advantaged investments for your future – all in Bitcoin, Ethereum, or another cryptocurrency, and even gold. Old or young, putting money into a cryptocurrency IRA or Bitcoin 401k with our platform could lead to profit.
In summary, Bitcoin can be a smart investment no matter your investment personality, assuming you understand and accept the risk.
Investing in Ethereum
Second to Bitcoin, Ethereum has a large market cap, but not as large as its predecessor. However, it does provide another way to profit for a savvy investor – especially one who is patient. And with Ethereum 2.0, people are asking themselves: should I invest in Ethereum? The platform recently started the shift to a proof-of-stake protocol, which will allow Ethereum to provide more utility than just being an investment. Proof-of-stake asks you to stake (or lock-in) a minimum amount of 32 ETH into your Ethereum wallet. That Ethereum then earns annual interest, just like a traditional savings account would, just for holding it in there.
The more you stake, the more you earn, with this official Ethereum calculator projecting up to 8.85% annual interest rate for early investors. This proof-of-stake method is ideal for patient investors.
Something that makes Ethereum special and unique compared to Bitcoin is that it’s “programmable.” This programmability comes from its revolutionary “smart contracts” that were built into the code at its inception and it allows Ethereum to provide far greater use cases.
Smart contracts enable developers to build applications on top of the Ethereum blockchain network. They are essentially automated if-then statements that allow users worldwide to exchange something of value. The item in question could be as simple as money, like Bitcoin, but it can also be ownership over land or a piece of content. Smart contracts allow developers to easily build and deploy their apps on the Ethereum network, known as decentralized application.
Those who are older might have the money to stake Ethereum but may not want to wait the various years to release their funds. A younger investor would benefit the most from this low-risk method. If you’re curious about the future of Ether or Bitcoin, we have an Ethereum price prediction article to learn more.
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