News
3 cryptocurrencies to buy in case of decline
Over the past few days, the broader cryptocurrency market has undergone a massive sell-off. While these fixes are not anomalous, they were the first to occur in quite some time.
The total cryptocurrency market capitalization is still up 40% year to date, so after seemingly rising for much of the spring, this correction may have been a little more painful than normal and caught some investors by surprise.
Yet it is during these corrections that the greatest opportunities usually arise. This was not the result of any major development, but mostly of a natural blush. Think of it as one step back to take two steps forward.
For those looking for an opportunity to grab some cryptocurrencies with long-term potential, here are three buy on the dip.
Image source: Getty Images.
1. Bitcoin
There’s not much to say here. Bitcoin (CRYPTO:BTC) has been the leader of the crypto asset class for the past 15 years and will likely remain so for decades to come. Even though it is the most valuable cryptocurrency, that doesn’t mean it doesn’t have room to grow.
Various predictions say that Bitcoin will reach $100,000, $500,000 or even $1 million one day. As sensational as they may seem, the general theme that Bitcoin’s value will likely rise is probably not wrong.
With limited supply, a decreasing inflation rate, and demand on an increasing trajectory, the price of Bitcoin will continue to experience upward pressure as it is pushed and pulled by the fundamental laws of supply and demand. While that doesn’t mean there won’t be bear markets and corrections along the way, there is no safer option for growing cryptocurrency portfolios than Bitcoin for investors with a long-term time horizon.
Bitcoin recently fell as low as $57,000, but has since recouped some of those losses and is currently trading for around $63,000. Even though it has risen in recent days, there is still an opportunity for investors. In the same way that the days of Bitcoin under $10,000 are over, the days of Bitcoin trading for under $100,000 are likely numbered.
2. Stacks
I’m a big fan of Stacks (ENCRYPTION: STX). Being a Layer 2 blockchain compatible with Bitcoin, it introduces new features that Bitcoin does not naturally possess, namely DeFi capabilities.
Stacks’ thesis is clear: it effectively unlocks Bitcoin’s $1.5 trillion market cap for use beyond the traditional buy-and-hold strategy. Its layered architecture offers the benefit of Bitcoin’s security and decentralization, but with the added ability to participate in several popular uses of DeFi such as lending protocols, non-fungible token purchasing, and yield farming.
The story continues
To quantify the potential of Stacks, take a look at the layer 2 blockchains built above Ethereum (CRYPTO: ETH). Today, Ethereum-compatible Layer 2s are worth around $23 billion overall. If Stacks were to reach levels of utility similar to those found on comparable Ethereum helper tokens, its price would increase by as much as sevenfold.
Compared to Bitcoin, Stacks price was hit particularly hard during the recent correction. In recent weeks it has fallen by more than 30%. Like Bitcoin, it has recovered some of these losses, but its price still remains well away from the high of $3.48.
A recovery to its previous high would offer investors a generous 50% gain, but when you consider its potential as a leading Bitcoin Layer 2 and its ability to grow as large as Ethereum’s Layer 2 blockchains, there is still plenty of upside for Stacks.
3. Airfield
If you haven’t heard of it, probably the most popular blockchain on the market today is Base. AND Global Coinbase(NASDAQ: COIN) and has been optimized to have a user-friendly interface along with extremely low fees and incredibly fast speeds.
It may get a little technical, but Base doesn’t have its own cryptocurrency. This design is likely the result of trying to stay out of the purview of the Securities and Exchange Commission, but that doesn’t mean there isn’t an opportunity to make money.
Instead of investing in a native cryptocurrency on Base, as you would Ethereum or Bitcoin, the next best option to give your portfolio some exposure to Base’s growing potential is to invest in the most valuable cryptocurrency built on Base: Aerodrome (ENCRYPTION: AERO).
The airport is known as a decentralized exchange (DEX). Users can trade tokens, provide liquidity to earn a return, and even earn rewards for participating in voting processes. As it stands, Aerodrome makes up nearly half of Base’s total value, making it the ideal proxy for gaining exposure to the burgeoning blockchain.
The airport has fallen about 40% in the last week. It might seem bearish, but this type of correction was probably overdue. Since its launch in February this year, Aerodrome has grown more than 1,100%.
With its unique technology that incentivizes user participation and its home on one of the most popular emerging blockchains, it could be a hidden gem in the market. But Aerodrome is still new and has a lot to prove, so proceed with caution.
Should You Invest $1,000 in Bitcoin Right Now?
Before you buy Bitcoin stocks, consider this:
The analyst team at Motley Fool Stock Advisor has just identified what they believe is the 10 best stocks for investors to buy now… and Bitcoin was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia you created this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $543,758!*
Stock Advisor provides investors with an easy-to-follow model of success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks every month. The stock advisory service has more than quadrupled the return of the S&P 500 index since 2002*.
*Equity advisor will return starting May 6, 2024
RJ Fulton has positions in Aerodrome Finance, Bitcoin, Coinbase Global, Ethereum and Stacks. The Motley Fool has positions and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has a disclosure policy.
3 cryptocurrencies to buy in case of decline was originally published by The Motley Fool