The cryptocurrency market is constantly evolving, which makes it tough to invest in the sphere. The removal of excess liquidity from financial markets worldwide is causing valuations to be reset to more appropriate levels. While the cryptocurrency market is volatile and presents many risks for new investors, most coins are trading at low prices and offer stability. Hence, it’s an ideal time for investors to hunt for the best crypto-buying opportunities.
The crypto winter has been extremely harsh on the sector. All the favorite crypto coins have seen their values plunge, including the memes tokens that were once hot to buy. The global cryptocurrency market capitalization was reduced by two-thirds from November last year to early July. This indicates that investors are reducing their exposure in the wake of rising interest rates, which will hopefully subside soon enough with an improving economic environment.
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Bitcoin (BTC-USD) is the most valuable crypto, and its status as quasi-money has helped it reach an astronomical valuation since its creation in 2009. Most experts tout it as an effective hedge against inflation, but with it shedding over 60% of its value last year, that thesis has been shaky.
Inflationary pressures have battered markets across the globe, but even with the slump in prices, BTC continues to perform as it was designed to. It has a limited supply having only 21 million coins in circulation. With the current trends in place, its demand will continue to outpace supply which will help increase its price over the long term. Even though its investors are sitting on hefty losses this time, their investments in BTC will pay dividends over the long term.
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Ethereum (ETH-USD) is the second most popular crypto platform and certainly the one with the most real-world utility. It has taken leading positions in non-fungible tokens and decentralized applications. Moreover, it continues to attract developers with its exceptional use cases. According to a report from Electric Capital, roughly 25% of developers flocking to blockchains choose to work with Ethereum.
Ethereum completed one part of a general update of the much-talked-about “Merge” last month. Its switch to a proof-of-stake protocol allows it to effectively validate transactions significantly quicker and cut energy consumption by 99%. Its “Sharding” phase will follow, effectively splitting the database to relieve congestion on the network. Consequently, it will solve a couple of its biggest problems: slow transaction speeds and high fees. Considering Ethereum’s potential, now appears to be a great time to invest in ETH.
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Solana (SOL-USD) is among the top ten cryptocurrencies in terms of valuation. SOL blew up last year, with its prices skyrocketing over 11,000%. However, its prices have tanked this year in line with its peers. Nevertheless, its smaller market cap has an easier path for astronomical growth, with adoption and improvement gains in its network.
Solana has set itself apart from the rest of the competition with its speed and scalability. It incorporates proof-of-history, a protocol that enables it to process 50,000 transactions per second (TPS) theoretically. In comparison, ETH can only process 15 TPS.
The network’s robust speed and cost advantages will continue to attract new users to its platforms. It continues to grow its market share in decentralized finance and NFTs each month, giving ETH a run for its money. Moreover, Solana Labs continues to invest in new initiatives, such as Solana Pay, that can evolve into significant growth catalysts.
The Sandbox (SAND)
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The Sandbox (SAND-USD) is a metaverse crypto platform that is essentially a virtual world developed on the Ethereum blockchain. For transactions in the virtual world, players need to use the SAND token, which can also be bought for investment purposes only.
The platform has attracted rapidly, selling virtual land for over a year. It has attracted major names in the entertainment world, such as rapper Snoop Dogg who bought land on the network and invited players to join his “Snoopverse.” Moreover, the platform has held two events allowing players to experience what it has to offer. The second season of its ‘Alpha’ events attracted over 300,000 visitors.
Sandbox is still early in its growth story and plans to launch its platform’s first virtual concerts and mobile versions this year. Hence, there are plenty of catalysts for the Sandbox to capture a healthy market share in the burgeoning metaverse space.
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The idea of building bridges between other blockchains and cryptocurrencies is at the heart of Polkadot’s (DOT-USD) project. The simple cross-chain programming tool enables developers to pull from each blockchain what they need without having any downsides, avoiding those pesky problems such as transaction speeds or scalability issues that have plagued previous efforts in this space.
The Polkadot blockchain is still in its infancy, with new developments added weekly. Polkadot offers developers a single platform to create, test and deploy decentralized applications. Moreover, it involves a sophisticated process of adding new functionality through parachains, and Polkadot projects can get funding assistance through the process, making it a truly decentralized network. In addition, the ease of use facilitates less troubleshooting, leading us toward an increase in innovation as we power through the Web3 era.
Cardano (ADA-USD) has been another top blockchain project over the past several years. It handles over 50,000 transactions per day, recently surpassing the 50 million transactions on the network. Hence, there are clear signs that the platform is expanding its community rapidly and seeing substantial growth in its network.
Cardano has plans to become the leading financial operating system globally and has partnered with various organizations in the developing world. It is arguably the most important blockchain network in the African continent. Moreover, with its Hydra update, its network could potentially handle a transaction capacity from 250 per second to 1,000,000. ADA is a slow-burner built for long-term investors; therefore, there is plenty to gain for investors willing to invest in it with a long-term horizon.
Polygon (MATIC-USD) is a Layer 2 blockchain that works as a sidechain with Ethereum to increase scalability and costs substantially. Since becoming one of the more popular blockchains, ETH has been plagued with congestion and fees that can sometimes skyrocket. However, MATIC essentially streamlines the process by processing transactions on its blockchain and adding them back to Ethereum.
Some experts believed that ETH’s 2.0 update could end Polygon. However, ETH’s developers plan to work “synergistically” with Polygon to reduce network congestion and increase TPS. ETH intends to become a major player in the future internet with Web3.0, which is why it needs to increase its TPS significantly. It can handle 1,280 TPS even after sharding, which could jump to 7,000 TPS with Polygon.
On the date of publication, Muslim Farooque held a LONG position in Ethereum and Solana. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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