The crypto winter isn’t coming. It’s here. Trending cryptos have been clobbered in recent months by numerous bankruptcies and liquidity problems that led to $2 trillion of value being eliminated from cryptos since they peaked last November.
Reports that the value of cryptocurrency stolen by hackers in the first seven months of this year increased 60% from the same period of 2021. That statistic also hasn’t inspired confidence in the sector.
As a result of these factors, many investors have sold their holdings of digital assets and moved to the sidelines, content to take a wait-and-see approach to crypto. While the pain has been deep and widespread, there are reasons for some optimism when it comes to cryptocurrencies. Though not every digital asset is worth investing in and many are unlikely to survive the current selloff, there remain some legitimate cryptos that serve a genuine purpose and are worth considering for investors. In this article, we separate the wheat from the chaff and determine which of the top trending cryptocurrencies investors should buy, sell or hold.
This isn’t Bitcoin’s (BTC-USD)first rodeo. The price of the biggest cryptocurrency by market cap previously crashed in 2018, 2020 and the summer of 2021 before rebounding to test new highs each time.
And while Bitcoin’s plunge this year has been frightening, with the crypto dropping 74% from a $68,000 peak last November to a $17,601 trough on June 19 of this year, indications are that the digital asset has found a bottom. Although Bitcoin has been range bound over the past two months, trading between $20,000 and $25,000, serious crypto investors appear to be taking a long-term approach to the digital currency and seem unfazed by this year’s price gyrations.
Many analysts are actually welcoming the current turmoil in the crypto sector and the decline of BTC’s price, saying we’re experiencing a much needed “washout” that is getting rid of the more speculative and least trustworthy cryptocurrency firms and assets.
Also, many investors and analysts were forecasting that Bitcoin’s price would fall below $10,000 this year. That BTC seems to have stabilized above $20,000 comes as a welcomed relief. Plus, it is important to remember that Bitcoin is the most widely used digital token in the world, accepted at more than 15,000 businesses. It is unlikely that the digital currency is going to disappear anytime soon.
Ethereum (ETH-USD) has been on a hell of a run lately. Even with the recent pullback in cryptocurrency prices, ETH has been on a big upswing since mid-June.
Ethereum hit a low on June 19 of $880.93 and has since risen nearly 80% to trade at $1,575.00. That makes Ethereum the best performing cryptocurrency over the past two months. It has run circles around Bitcoin, which has gained 20% during the same timeframe.
Ethereum’s outperformance comes as a highly anticipated upgrade to the Ethereum blockchain approaches. Known as the “Merge,” the upgrade is slated to take place on Sept. 15 and will move the Ether blockchain from an energy intensive “proof-of-work” system to a more energy efficient “proof-of-stake” model.
Proponents say that the Merge will make the Ethereum network faster and more appealing to investors, in addition to being better for the environment.
Many analysts say they expect the rally of ETH to accelerate in the lead-up to the Merge event in September, with forecasts that the price of Ethereum could surpass $2,000 per digital token in coming weeks. And, if the Merge is successfully executed, it is expected to lead other cryptos, including Bitcoin, to also switch to a proof-of-stake operating model.
Called a historic event by many crypto bulls, the Merge is proving to be a strong catalyst for Ethereum, whose blockchain is used to facilitate decentralized finance transactions and smart contracts, giving it plenty of utility.
There was a time when investors hoped to push the price of Dogecoin (DOGE-USD) up to $1. That seems like a long time ago now with DOGE currently trading near 7 cents.
So far this year, DOGE has plummeted over 60%, building on losses it sustained last year. Things just haven’t been the same since Tesla (NASDAQ:TSLA) CEO Elon Musk stopped hyping Dogecoin on social media and while hosting Saturday Night Live. Since Musk’s infamous SNL appearance, the price of DOGE has fallen 91%, dropping from an all-time high of 69 cents reached in May 2021. One investor is now suing Musk for $258 billion, alleging he ran a pyramid scheme with Dogecoin.
It turns out investors don’t have much use for a cryptocurrency that was started as a joke by two software engineers, features the cartoon image of a Shiba Inu dog, serves no practical purpose whatsoever, and is often referred to as a “meme coin.”
And yet, Dogecoin continues to trend on social media and is the topic of frequent discussion on investing sites such as WallStreetBets. Regardless of its cult status among retail investors, DOGE remains a highly speculative investment and one of the least valuable and most volatile cryptocurrencies currently available. Maybe there’s a reason why Elon Musk stopped hyping it.
Known as an “altcoin,” Litecoin (LTC-USD) is similar to Bitcoin but with a slightly altered codebase that enables it to be mined quicker and offer lower transaction fees than BTC. The improvements in Litecoin, which was developed in 2011, make it one of the best cryptocurrencies to buy and hold for the long-term.
Frequently called “silver to Bitcoin’s gold,” Litecoin is currently accepted by more than 3,000 merchants worldwide, according to data from Cryptwerk.com. Nearly 100 payment gateways, including fintech giant PayPal (NASDAQ:PYPL), enable people to transact with Litecoin.
Given its similarities to Bitcoin, LTC’s price tends to move in lockstep with BTC. Since hitting an all-time high in May 2021 of $386.45, Litecoin has tumbled nearly 85% to now trade at $56.35. However, like other cryptocurrencies, LTC has rebounded since hitting a bottom in June, rising 30% in the past two months.
As one of the oldest and most trusted altcoins, Litecoin tends to climb quickly when crypto prices bounce off their lows and reverse higher. Litecoin continues to operate on an energy-intensive “proof-of-work” protocol, but there is speculation that the altcoin could change over to a “proof-of-stake” model should Ethereum successfully make the switch.
Cardano (ADA-USD) doesn’t get as much attention as it deserves. The cryptocurrency is one of the few to be created through rigorous research carried out by engineers and mathematicians.
Cardano was co-founded by Charles Hoskinson, one of the initial developers of Ethereum. Disapproving of the direction that Ethereum was heading, Hoskinson helped to create and launch ADA. Hoskinson and his team developewd Cardano’s blockchain through multiple experiments and peer-reviewed research, having written 120 papers on blockchain technology. This in-depth research gives Cardano an air of authenticity that most cryptos lack.
While still in its early stages, Cardano is today seen as a rival to Ethereum. Some people in the crypto community call Cardano an “Ethereum killer,” claiming that it can perform more transactions than the Ether blockchain.
Cardano’s developers say that they want ADA to become the world’s leading financial operating system through the establishment of DeFi products, and by offering solutions for blockchain interoperability and legal contract tracing. As of July this year, Cardano had the eighth-largest market capitalization of any cryptocurrency at $15 billion. ADA currently trades for 46.5 cents, down 70% from $1.59 in January of this year.
On the date of publication, Joel Baglole 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.