Bitcoin
Bitcoin halving has been completed. 3 cryptocurrencies to buy now.
Three digital assets are poised for significant gains following Bitcoin’s latest halving event. There is a crypto for everyone here.
The fourth reduce by half in Bitcoin (Bitcoin -0.90%) mining rewards are in the books and the crypto world is buzzing. With Bitcoin’s inflation rate reduced and scarcity increased, experts predict a price increase that could have repercussions throughout the market.
The halving means that miners now receive fewer bitcoins to validate transactions, making each digital currency more valuable. This is expected to increase prices over the next year, assuming demand for Bitcoin remains stable or increases. Without this market reaction, mining becomes unprofitable and the transaction processing system collapses.
Obviously, this is good news for Bitcoin investors. The leading cryptocurrency should be first on your list if you are dipping your toe into crypto waters for the first time these days.
Growth investing mentor Cathie Wood of ARK Invest agrees: The inflation dampening effect of halving cycles plus the arrival of spot Bitcoin exchange-traded funds (ETFs) should push the price of Bitcoin to $1.5 million or more until the year 2030.
More aggressive adoption of Bitcoin in the financial community could drive the currency’s price to $3.8 million, in Wood’s opinion. And I don’t think she’s wrong about that. The only question is how quickly traditional bankers will embrace the increasingly digital global economy.
But Bitcoin isn’t the only cryptocurrency in play right now. Ethereum (ETH -1.69%) and Polka dot (POINT -3.33%) also seem like great long-term investments to me – for very different reasons.
Ethereum
Bitcoin and Ethereum generally move together. Its price charts are almost twins, except that Ethereum’s long-term gains tend to be a little higher:
Bitcoin Price given by Y charts.
This happens for a few reasons:
- Market sentiment towards Bitcoin tends to color the entire crypto market. When the biggest and oldest name in the industry is in the headlines, the very idea of digital currencies gains space in public discussion. As such, Ethereum follows the lead of its larger cousin in a fairly straightforward way.
- Ethereum is also a pioneer in cryptography. Their smart contracts add value to the industry at large, and many popular digital currencies are actually ERC20 Tokens on the Ethereum network. Developers tend to work on creating apps and programs that rely on smart contracts when cryptocurrencies are inspiring headlines, so it makes sense that the leading smart contract platform would outperform Bitcoin’s simple store-of-value profile.
Therefore, I expect Ethereum to follow suit with Bitcoin’s next price gains, with an extra dose of adrenaline added to the mix. Pessimistic analysts would point out that Ethereum has many rivals currently, led by the faster market Solana (SUN -1.89%) and Cardano (ADA -3.27%) systems.
But Ethereum has a multi-year head start in these possible substitutions and in a much greater market presence. And don’t forget that the Ethereum blockchain is in the middle of a long update process, increasing the execution speed of its contracts and adding new features.
The king of digital contracts may end up sharing the crypto throne with a few rivals, but there is room for several substantial winners up there.
Polka dot
If Ethereum is Bitcoin’s turbocharged graphical twin, Polkadot plays the role of an undervalued, low-priced alternative. Bitcoin prices have more than doubled in the last two years, but Polkadot is down 34% in the same period:
Bitcoin Price given by Y charts.
Yet, Polka dot seems prepared to act in the near future. This is the official blockchain ecosystem of the Web3 Foundation, and the Internet as we know it seems to be overdue for a new architecture. The age of social media giants is starting to feel tiresome.
With its focus on the ideals of Web3 and interoperability between different blockchain systems, Polkadot is uniquely poised to win in the coming radical changes. The Polkadot project aims to build a decentralized internet, attracting developers and projects seeking advanced functionality in an era of more personal online interaction.
Polkadot is a bit lost in the market noise right now as investors don’t see much evidence that the Web3 revolution is coming. I see the price drop as a wide-open buying window, setting Polkadot up for bigger percentage gains from a lower base.
With Bitcoin halving events boosting overall market sentiment, now could be the perfect time to invest in Polkadot with an absurd discount.
Anders Bylund has positions in Bitcoin, Cardano, Ethereum, Polkadot and Solana. The Motley Fool has positions and recommends Bitcoin, Cardano, Ethereum and Solana. The Motley Fool has a disclosure policy.