After overwhelming 2022 that caused Bitcoin to plunge more than 60% and didn’t spare other cryptocurrencies either, the new year started off more exciting. By the end of February 2023, Bitcoin and Ethereum prices raised by nearly 30%, and enthusiasts are already eager to greet the longed-for crypto spring.
Since other top crypto assets are slowly regaining their swagger, more people are considering getting back into the investing scene. When deciding on which crypto to buy, try looking into the coin’s total market cap, real use cases, as well as its value proposition, and overall level of community engagement.
And there is one more thing to keep in mind. Instead of waiting for the best moment to buy crypto, start investing right away, as contemplation tends to last for months and even years. It might be worth starting with smaller amounts, yet develop a clear plan and stay consistent.
Understanding the Crypto Market
Ever since Bitcoin went mainstream, alternative crypto coins and tokens quickly followed its lead. The modern crypto market counts tens of thousands of digital assets, including stablecoins, all kinds of altcoins, value, utility, security, and governance tokens, and even meme coins. Every single one of them is focused on a particular purpose, be it saving value or participating in the platform’s development, but at the same time, all are used as investment tools.
Although the cryptocurrency market is somewhat correlated to the stock market, it depends on a number of factors that drive the prices either way. For instance, supply and demand have a huge effect on a cryptocurrency’s price. If crypto’s supply runs short, or it boasts higher demand, the price for it is likely to increase, as potential buyers are willing to pay more.
The cryptocurrency market is largely shaped by global regulatory developments. There were quite a few cases when a country’s sharp regulatory decisions caused major market downfalls and spikes. While the infamous crypto ban in China caused a massive decline, Japan’s initiative to embrace the crypto space resulted in an optimistic price rally. However, even in the most progressive countries, a proper regulatory policy is still a work in progress, so it is only fair to expect some volatility along the way.
The level of adoption also influences the prices. The more people use digital assets and crypto apps, the more positively the market reacts.
With so many investment options available, what's the best crypto to buy right now?
Top Cryptocurrencies to Consider
When talking about top crypto that often makes their way into investors’ portfolios, Bitcoin and Ethereum continue proving to be the best performers. Stablecoins frequently end up being widely used, as they allow investors to save value while keeping it decentralized.
Moreover, the Proof of Stake tokens that can be staked for additional passive income are also gaining traction. On top of that, cryptocurrencies issued by well-established platforms, mainly exchanges, are popular among regular users; the Binance Coin is one of the best examples.
Here’s a list of top cryptocurrency favored by many investors:
Bitcoin | Market cap: $472 billion
Bitcoin (BTC) is the pioneer of cryptocurrencies that was designed in 2009 by a mysterious figure or a group of people. Based on the idea of financial freedom, Bitcoin also introduced blockchain technology that could reform the way we work with data. As of now, it is the world’s best-known cryptocurrency and the permanent leader of the crypto market cap chart.
The BTC price reached its all-time high, exceeding $65,000 in November 2021, but since then dropped more than three times. Bitcoin is extremely volatile, yet consistently demonstrated gradual growth since the moment of its inception.
Ethereum | Market cap: $204 billion
After Bitcoin presented the idea of decentralization, Ethereum (ETH) emerged as a technology-first platform that put blockchain tech into use. It introduced smart contracts that allowed developers to create programmable money and kick-started DeFi and NFTs.
Price-wise, Ethereum showed impressive growth, rising from $11 to the current $1,666 and reaching its all-time high of $4,891.70 in November 2021.
BNB | Market cap: $49 billion
One of the most famous exchange tokens, Binance Coin (BNB) was issued by the world’s biggest crypto exchange for the original purpose of paying trading and other fees. The coin had a rather light start and was trading at only $0.10 in 2017. Four years later, the BNB went through a huge price rally and attracted enterprise investors. Currently, the asset is worth $313.
USDT | Market cap: $70.5 billion
Tether (USDT) is a top crypto stablecoin backed by physical USD, EUR, and other reserves. Pegged to USD, USDT runs on several blockchains, including Bitcoin, Ethereum, EOS, Tron, Algorand, and OMG Network. Compared to the other cryptos, USDT is not as volatile and due to that it is often chosen by investors who look for a safe crypto haven.
USDC | Market cap: $42 billion
Another trending stablecoin, USD Coin (USDC), is also pegged to USD and backed by cash and short-term Treasury bonds. Founded by the Circle and Coinbase, the coin runs on the Ethereum network.
BUSD | Market cap: $12 billion
Binance USD (BUSD) is another notable USD-pegged stablecoin created by Paxos in partnership with Binance. Used by investors as a way to preserve the value of their digital assets, BUSD is traded across all the leading exchanges, both centralized and decentralized.
DAI | Market cap: $5 billion
Unlike other stablecoins managed by private companies, DAI by MakerDAO is governed by a decentralized autonomous organization, making it less corrupt, more transparent and democratic. Moreover, the coin is backed by cryptocurrencies, not fiat assets.
AVAX | Market cap: $6 billion
Avalanche is a layer one L1 blockchain catering to decentralized apps just like Ethereum. The protocol’s goal is to increase transaction output by 6,500 transactions per second and remain scalable. AVAX, Avalanche’s native token, can be staked to receive passive income.
AVAX is currently trading at $20.55, having increased by 638.32% since December 31, 2020, its all-time low mark.
MATIC | Market cap: $12 billion
Polygon, a former Matic Network, is a platform focused on infrastructure development and scaling. As of now, it powers over 7,000 dApps and boasts 65,000 transactions per second.
MATIC, Polygon’s ERC20 token, currently trades at $1.40, demonstrating over 53% gain since its original launching price. The token can be the best fit for beginning investors due to its low price and solid infrastructure-focused use case.
Risks and Challenges in Crypto Investing
Before picking a top cryptocurrency to buy this year, it’s worth educating yourself about the risks that come with such investments, as well as the challenges one has to face.
Firstly, financial markets are known for their volatility, and the crypto space is not an exception. New investors may experience all kinds of emotions when the value of their portfolio suddenly drops big time. The best thing you can do in this case is to wait it out and never panic sell, as the market has a tendency to eventually recover.
Secondly, a lack of regulations, alongside unexpected new developments, can have a negative effect on one’s savings. A sudden ban on crypto products can harm your strategy and wealth-building. The best way to avoid unpleasant surprises is not to keep all your funds on one platform, monitor market moods, and stick to the jurisdictions with a clearer regulatory policy where you are legally protected if anything goes wrong.
Finally, your security should always come first. The cryptocurrency industry has seen many cases of failed or hacked exchanges that caused users to lose their money or wait for years to get some sort of compensation. The good news is that there is a simple solution to this problem. It is essential to store your assets in non-custodial wallets to have full control over your funds. And under no circumstances should you keep crypto on a centralized exchange.
Best Practices for Crypto Investing
A few simple practices can drastically improve your strategy and save you from disappointment. Top crypto investors always research the market before making any decisions. The truth is that a big chunk of trending coins promoted by questionable influencers will fail. Staying on the safer side and betting on well-established platforms with a working product and relevant use case is the best-case scenario. And never let emotions influence your actions.
Another classic tip is to diversify your portfolio, as putting all the eggs in one basket rarely works. Apart from top crypto tokens from the coinmarketcap’s list, pay attention to some less popular altcoins that have proved to be reliable. The more options you have, the higher the chances some of them will reward you.
Using platforms like EarnPark will allow you to safely earn income from owning crypto-assets due to the use of strategies with various risk levels. Registered with the SEC and guaranteeing bank-level security, EarnPark works even for small deposits and offers daily compounding payouts and attractive interest rates.
The Bottom Line
Successful investing is more than just stocking up on top crypto. Doing your due diligence and conducting proper market research are just the mere basics for everyone. Not all trending coins are worth buying, and keeping your cool will put you on the safer side. It is very important to make long-term plans and stick to them, despite the disappointments the market may cause you along the way.
The crypto world is ever-expanding and holds endless opportunities for anyone willing to explore it. Make sure to pick the right platform that puts your security first while offering attractive, yet realistic returns and various strategies.