In this post today, I'm gonna be sharing my top five favorite Cryptocurrency picks for a long-term investment right now. So I've personally been investing in Cryptocurrencies since around 2017 and at different times, I've had less or more money allocated into Crypto markets. But these are a few that I definitely plan on adding more to in the future for my overall Crypto investment portfolio.
Now, real quick guys, I just have to make a disclaimer here that I am not a financial advisor and this is not any sort of financial advice, and you should always do your own research on these Cryptos or any investment out there before making your own decision about whether or not you, yourself, want to invest in that particular asset.
Also, guys, generally, when I do any topics related to Crypto, I get a lot of spam and spam comments down below. So I've been doing my best to have my assistant take care of those, but I just wanna give you the heads up there to watch out and make sure if you're communicating with anyone down there, you make sure you're not giving out any sensitive information. And if you're making sure that someone is actually us, you're gonna wanna look for that white check mark next to the account name.
First of all, what was the actual criteria for making these five Crypto selections? Well, first of all, Cryptocurrencies, in general, are some of the most volatile assets out there. So before you even begin to decide if this is an asset you want to invest in, you just have to understand that price swings with Cryptocurrency are going to be quite substantial. But that being said, looking at these statistics here, this is what we focused on personally for making these selections. Number one, market capitalization, which is gonna show you the total value of this currency and this is gonna show you how popular it is and what the market values the currency act.
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So honestly, the bigger Cryptocurrencies with the most mainstream adoption, for the most part, are going to be the better long-term investments similar to investing in the top five stocks in the stock market, companies like: Apple, Tesla, et cetera.
The next thing we looked at was the circulating supply or how much activity this coin is seeing and how much of the supply is circulating out there. After that, we look at institutional investors. So who are any big investors that have said they like the currency or personally invest in it. And then we also looked at the Weiss Rating and this is a rating agency that provides ratings on stocks and other assets for about 50 years. But recently, they also started rating Cryptocurrencies, so we also included that as well.
Bitcoin
So it should come as no surprise, but number one on the list here, guys is, of course, Bitcoin. So they currently have a market cap here of $794 billion and it's currently a circulating supply of 18 million Bitcoin. Now, in terms of institutional investors or well-known investors, you have Tudor, you have Ray Dalio, and in addition, Tesla has sort of been on and off about Bitcoin, but it's definitely on Elon Musk's radar. And in terms of the Weiss Rating, this comes in at an A-. So Bitcoin is, of course, the first Crypto made in 2009 and it has the biggest branding in Crypto. It's the most well-known Cryptocurrency and Bitcoin is nearly synonymous with Crypto, where when anybody says Crypto, most people immediately think of Bitcoin.
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So originally, Bitcoin was intended to be an uncensorable, peer-to-peer electronic cash system. However, today, what we're seeing Bitcoin as is more of a digital gold versus a digital cash. So instead of a way to spend your money, it's actually a way to store value as sort of a digital gold or digital store of value. Now that is largely based on the fact that Bitcoin has original blockchain technology that is clunky and robust, to put it politely, with slower transaction times and rigid features that reinforce its security.
But because as of these reasons, overall, it just wouldn't really be feasible to use Bitcoin for day-to-day transactions and payments, because the system is just not built for nearly that volume of transactions. So Paul Tudor Jones and Tudor Investments mentioned they are seeking to raise their overall portfolio to 5% allocation in Bitcoin. Also, Ray Dalio and Bridgewater Associates views Bitcoin as an attractive savings instrument. And also, as far as Elon Musk and Tesla, he backed Bitcoin heavily before removing Bitcoin as a payment due to the energy requirement and pollution it causes. So due to that mining of Cryptocurrency, that does use up a lot of energy and obviously, Tesla being a green EB company, it just was sort of a, maybe a PR problem for them or just a way to potentially manipulate that price or change the price of Bitcoin depending on who you ask. But nonetheless, Tesla has said it will reconsider when mining of Bitcoin is done using at least 50% renewable energy.
Ethereum
All right, so coming in at number two now is Ethereum, which has a market cap of around $356 billion and a circulating supply of just under 120 million tokens. Now, as far as institutional support or investors here, you have JPMorgan, you have Rothschild Investment, and you also have Parkwood LLC among others. And the Weiss Rating on Ethereum is an A.
Now, Ethereum is the second-most popular Crypto to Bitcoin, but it is by a dwindling margin as Ethereum has had actually, for the most part, better returns in recent time as compared to the returns of Bitcoin. And so a lot of people actually predict at some point in time that Ethereum will become the largest, and most valuable, and most popular Cryptocurrency out there. So it's not just a Crypto coin, but Ethereum is also a blockchain platform that can host all sorts of different tokens, as well as different apps. So Ethereum is the first Crypto out there that has offered smart contract capability, where transactions can be automated between different parties when specific sets of actions and conditions are met. So think about a contract in the real-world sense, but being able to do that in the digital realm where nobody can tamper with it or mess with it once the actual smart contract has been executed. So there's all sorts of crazy applications that can be built upon Ethereum. That's why a lot of people refer to this as almost the new internet and in terms of back when the internet was growing in popularity, your only way to invest in the internet was to internet-based stocks. But a lot of people refer to Ethereum as potentially buying shares of what could become the new internet, seeing as Ethereum is required to run all of these different functionalities on the Ethereum network and blockchain.
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Now, these smart contracts here can trade any form of assets not just Ethereum coins. In a nutshell here, Ethereum basically fine-tunes the concepts of Bitcoin and brought it here to the next level and it has been hailed as, "The infinite canvas for infinite possibilities," sort of similar to this idea of maybe this becoming the new internet. JPMorgan is preferring Ethereum to Bitcoin for its investments, citing the futures and spot pricings of the coins favoring Ethereum.
Ethereum does, however, have a gas tax in all its transactions to fund the energy needed to run the blockchain, and these fees can get quite expensive. Now, that being said, Ethereum, just like Bitcoin, is facing competition as well, but their new 2.0 blockchain design is designed to keep it competitive against newcomers out there, such as Cardano.
Cardano
Speaking of Cardano, they are up next here on the list for number three, with a market cap of $34 billion and a circulating supply of 33 million tokens. Now, they also have some institutional investors, such as Grayscale and a few others, and their Weiss Rating is currently sitting at a B. So this is designed by Ethereum co-founder Charles Hoskinson and Cardano is hailed as the most likely Ethereum Killer. So it's sort of funny because you had Bitcoin, and then you had Ethereum sort of going after Bitcoin, and then you have smaller coins like Cardano now going after Ethereum.
So Cardano is also a Blockchain which can host other decentralized tokens, assets, and apps, just like Ethereum. However, the protocols on the Blockchain are still actively being developed and shared between the Cardano Foundation and a few other parties.
So why is Cardano the most likely Ethereum Killer?
Well, first of all, the new Proof of Stake Blockchain is more environmentally-friendly, with less energy needed per transaction. In addition, processing transactions faster. Now, if you're curious how that's accomplished, there is a bullet point here explaining that, but I'm gonna be honest with you guys. It is a little bit over my head just because I am mostly into the stock market and Crypto is a smaller component of my portfolio, but I do wanna talk about it here from time to time on my posts.
Chainlink
So moving on here, guys. Number four is Chainlink with a market cap of $7 billion and a circulating supply of about 460 million tokens. Now, in terms of institutional investors, you have Grayscale, and also the Weiss Rating here is a B+. Now, Chainlink's design is centered around bridging the gap between smart contracts and the real world, making a safe link between large enterprises and all blockchain.
Also Read: What is Bitcoin's Energy Consumption Problem?
So Chainlink's vision here is to make decentralized currency safer for big enterprises, as well as bring the big funding of big enterprises into the blockchain world, basically linking these two worlds as the name suggests. So through cross-chain bridging, this allows different blockchains, apps, and smart contracts to communicate with each other across different blockchains, sort of like API developer options on steroids. So this interoperability also allows all of these things to interact with specific kinds of real-world data. This allows for extreme levels of sophistication, as well as utility value in the real world. So currently, Chainlink is being relied on as a foundation for future Crypto projects and functions. But overall, it sort of reminds me of the IFTTT logic and different things like that. So I think Chainlink could have a lot of real-world applications and also being able to connect different Cryptocurrencies that can't communicate with each other prior and connecting these different apps and tokens with each other.
USD Coin- Stablecoin
Finally on the list here, we have USD Coin, which has actually become one of the more popular Cryptocurrencies lately as the market cap of this has been growing while many of the others have been sinking. And that is because a lot of people will park their idle cash in USD Coin when they're not currently invested in the Crypto markets. So right now it's sitting at a market cap of 52 billion and the circulating supply is also 52 billion, making it basically a $1 conversion per US dollar coin. Now, as far as institutional investors, you have Goldman Sachs, Baidu, as well as IDG Capital, and this is not rated by Weiss Rating because it's essentially pegged here to the US dollar.
So this particular Crypto is made by Circle and Coinbase to bridge the gap between fiat or government currencies, as well as Crypto. It is a Stablecoin, which is a token designed to always keep a stable value, whereas every other Crypto we just talked about is going to fluctuate in value. So beyond that, USD Coin is backed one-to-onewith US dollars as well as treasuries. And because Circle and Coinbase are big companies who are subject to SEC regulations, this definitely gives USD Coin a much safer element. Now, that being said, it is important to understand that USD Coin does not have any type of FDIC or federal insurance, and that is because Crypto is still not recognized federally as an asset.
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So there's two main reason why people hold USD Coin.
Number one, it's a way that a lot of people park their idle cash when they're not currently invested in Crypto, but they wanna have their cash on the sideline ready to deploy when they're looking to reenter the market. In addition, there are a lot of platforms out there that are going to give you a higher-than-average APY. somewhere in the neighborhood of above 5% onsome of these platforms if you're willing to lend out your USD Coin. Now, obviously, USD Coin is not FDIC-insured, as mentioned, but if you're comfortable with that risk, you can get a substantially higher return on your dollars than you would holding it in a traditional bank, but the benefit of a bank is you are FDIC-insured. So that's sort of the trade-off there.
That’s all guys, that is going to wrap up this post here on my favorite Cryptos for the long-term. Again, be sure to do research on your own and understand these things thoroughly before making an investment yourself. Do check out our similar posts as well.
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