Cryptocurrencies are quickly becoming mainstream alternatives to traditional currencies.
The cryptocurrency industry is awash in advertisements promoting it as a means of payment or an investment opportunity.
Since 2009, digital currencies have been around. But now they are at the center of a huge spotlight.
More than a decade ago, cryptocurrency was a buzzword. There are a lot of people who don’t understand what is conveyed by it.
Due to the increasing demand for cryptocurrency, we’ve compiled the best cryptocurrency to invest in 2022 for the short term and long term, as well as an in-depth look at the risks of crypto investing.
Let’s get started!
What is Cryptocurrency?
Cryptocurrency is a digital currency or digital asset, which ensures that the revenue is safe and can’t be duplicated or counterfeited.
The majority of cryptocurrencies run on decentralized networks using blockchain technology – a distributed ledger that is enforced by a decentralized network of computer servers.
It’s possible to create cryptocurrency through a process called mining, in which powerful computers solve very complex problems as a reward for successfully completing cryptocurrency transactions.
As a result, the exchange of cryptocurrency usually leads to the introduction of more cryptocurrency.
Cryptocurrency is not controlled by a central system, like the government and central authorities. The number of cryptocurrencies is limited, and they are sometimes equated to precious metals like gold and silver.
How does crypto work?
In a sense, cryptocurrency is like PayPal or a credit card, but you exchange digital assets instead of dollars for goods and services.
Cryptocurrency transactions must be carried out using a cryptocurrency wallet, a digital wallet used to exchange currency with a peer. Software that enables the transfer of funds between different accounts is known as a cryptocurrency wallet.
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You will need to provide a password, also referred to as a private key, in order to complete a transaction. Your private key functions similarly to your bank account. There is the possibility of owning multiple keys and owning all the funds that are sent to the keys.
In order to maintain complete transparency in the market, transactions are recorded on a public ledger that shows the totals of multiple transactions without revealing the identities of the parties involved.
You need to understand two key components of cryptocurrency in order to understand its uniqueness:
- Blockchain
Cryptocurrency blockchains are a database that stores records of cryptocurrency transactions and totals. Data is stored in a series of “blocks” that are linked together chronologically. This technology is different from traditional currency because no central authority oversees it.
- Cryptography
Blockchains are made secure by cryptography. Cybercriminals are unable to access the blocks of data due to cryptographic codes, also known as hashes.
8 Best Cryptocurrencies To Invest for Long Term in 2022
1. Bitcoin (BTC)
Bitcoin is a top-rated digital currency where you can invest for the long term. it can be used to purchase goods or services from vendors who accept Bitcoin as a payment.
The value of bitcoins has risen dramatically since its launch in 2009, making it one of the most well-known virtual currencies.
Bitcoin is already accepted by many companies, making it a smart investment. For example, Visa accepts bitcoin. Large financial institutions are also increasingly integrating bitcoin transactions into their services.
Risks of Investing in Bitcoin
There is a lot of fluctuation in the value of bitcoin. It is possible for the price to fluctuate by thousands of dollars per month. It may be best to stay away from bitcoin if you are nervous about wild fluctuations.
Otherwise, these fluctuations should not worry you so long as you remember that cryptocurrencies may be a good long-term investment.
Investing in bitcoin might also be a mistake because of its price. The average person cannot afford to purchase an entire bitcoin at the current price of almost $43,000.
This is bad news for investors who do not want to purchase fractional bitcoins.
2. Ethereum(ETH)
Ethereum is an open-source network that allows developers to build their own cryptocurrencies using its protocols. Even though Ethereum is behind bitcoin in terms of value, it is still far ahead of its competitors.
Due to its unique technology, this cryptocurrency has far outweighed its place in the market even though it came out years after some other cryptocurrencies.
It’s the second-largest cryptocurrency behind bitcoin and is currently the most popular blockchain.
Risks of Investing in Ethereum
Despite the Ethereum platform’s use of blockchain technology, all transactions on the network take place on one “lane.” As a result, when a network is overloaded, transactions may take longer to process.
As a result, when a network is overloaded, transactions may take longer to process. Transaction fees are high too.
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3. Binance Coin (BNB)
In terms of market cap, BNB is currently the third-largest token, which sounds impressive, but when you dig deeper, you’ll find that it represents only 4.1% of the overall cryptocurrency market.
Binance has taken advantage of this growth, having seen its market dominance rise from 0.7% at the beginning of 2021 to its current position of 4.1%. BNB is the Binance Smart Chain’s native coin.
For those who trade frequently, it is important to bear in mind that Binance has temporarily halted deposits and withdrawals from some networks, such as Polygon and Solana, in order to upgrade its network.
In contrast, the most recent shutdown, which occurred on April 8, did not affect airdrops, which are rewards based on a portion of deposits.
Risks of Investing in Binance Coin
It is the fact that the Binance coin was created by a company rather than a group of tech developers that set it apart from its competitors.
It is believed that the commitment of Binance Coin to maintaining a strong blockchain led by a strong management team has convinced many skeptics, yet some investors remain wary of this cryptocurrency due to its potential security concerns.
4. Cardano (ADA)
Cardano is an open-source blockchain platform. With its internal cryptocurrency, peer-to-peer transactions are made possible, and the consensus process is decentralized.
Investors are attracted to Cardano for a variety of reasons, including a smaller footprint. Transactions on Cardano are less energy-intensive than those on Bitcoin. The result is faster and cheaper transactions.
Risks of Investing in Cardano
The Cardano network may be better, but it may still not be able to compete with larger cryptocurrencies. Having a smaller user base means there are fewer developers. Investors seeking high adoption rates won’t find this attractive.
There are ambitious plans for the platform, including launching an incubator that would contribute to Africa reaching its potential as a major economy, however, it remains to be seen whether the platform will be able to realize these goals.
5. Polygon (MATIC)
Developers who contributed greatly to Ethereum’s blockchain platform created Polygon. According to CoinMarketCap, Polygon is intended for Ethereum scaling and infrastructure development.
As a “layer two” system, it enhances transaction and verification speed by building upon Ethereum’s multi-chain architecture.
Binance and Coinbase both support Polygon cryptocurrency. MATIC is it’s token and serves as a payment service, a settlement currency, and a transaction fee.
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According to AMB Crypto on April 9, Zo World, a decentralized travel project, had a recent launch of its non-fungible token Founder and other digital assets on Polygon, which could support MATIC prices in the near future.
Risks of Investing in Polygon
CoinDesk reports that Polygon assured its users last year that it fixed a vulnerability that put about $20 million worth of its coins at risk. A fix was implemented within two days after hackers were notified of the issue.
Polygon, however, is liable for about $1.4 million in damages following the theft of over 800,000 tokens by black-hat hackers.
6. Terra (LUNA)
According to CoinMarketCap, Terra’s blockchain enables global payment systems by using stablecoins.
In addition to fiat currencies, there are currencies pegged to fiat currencies such as the U.S. dollar, the South Korean won, and the Special Drawing Rights of the International Monetary Fund.
LUNA, Terra’s native cryptocurrency, stabilizes the prices of the blockchain’s stablecoins and functions as a token of governance, giving holders a voice in decisions concerning the Terra blockchain.
The price of LUNA has been rising steadily since June 2021, and the gain in value since February has more than doubled.
Terra, one of the leading stablecoins, invests in assets such as bitcoin and avalanche as collateral for its UST stable coin, which is a Terra stablecoin. In the last several months, LUNA has seen less volatility than some cryptocurrencies and thus, increased demand for UST.
Risks of Investing in Terra
Terra uses LUNA to stabilize both its stablecoin values and the shock absorption processes for its stablecoins.
As a result, LUNA’s performance could suffer in the event that Terra’s stablecoins are unable to maintain their rates against fiat currencies, Hougan said.
7. Avalanche (AVAX)
The Avalanche blockchain is a layer one blockchain which aims to make the system more scalable through improvements to the base protocol, as Binance described.
According to CoinMarketCap, it is a competitor to Ethereum created by Ava Labs and computer scientists at Cornell University, including former professor Emin Gün Sirer, who has been working on cryptography for over twenty years.
The three blockchains in Avalanche are capable of independently validating transactions, as opposed to Ethereum’s nodes having to validate every transaction.
Due to this, Avalanche can process as many as 6,500 transactions per second. Hence its popularity among Ethereum projects has increased, U.S. News reported.
In 2020, AVAX launched with a 24-hour ICO. In the past year, its price has fluctuated between $9.34 and $146.22. Today, it is trading at $84.09.
Risks of Investing in Avalanche
In 2018, Sirer released a white paper introducing cryptocurrency. In 2020, the currency was launched. As avalanche has been around for such a short time, it does not have a track record to compare it to, making it a riskier investment.
8. Chainlink (LINK)
According to CoinMarketCap, Chainlink is an open-source decentralized oracle network intended to facilitate secure interactions between blockchains and external data feeds, events, and payment methods.
The developers hope this will lead to smart contracts becoming the mainstay form of digital payment.
Benzinga reported that Chainlink is making use of an agreement with Google under which the company is allowing the company’s customers to access its cloud service through Chainlink’s protocol.
Securities.io reports that Eric Schmidt, Tom Gonser, and Jeff Weiner are among the project’s advisory board members.
In addition to Chainlink, decentralized finance company Truflation is also using Chainlink to build its new inflation index as an alternative to the consumer price index.
CoinDesk reports that whereas the CPI measures inflation based on survey data, Truflation’s index will be calculated based on prices and the CPI’s formula, CoinDesk reported.
Risks of Investing in Chainlink
Chainlink has experienced the same volatile price fluctuations as other cryptocurrencies, despite its tested utility and support from major players. In April, it cost a little over $15 instead of $52 in May 2021.
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Biggest risks for crypto investors
- Volatility
- Cybertheft and hacks
- Loss or destruction of private keys
- Unregulated trading platforms/exchange
- Taxation laws
- Currency conversion risk
- Risks associated with the peer-to-peer transaction
Conclusion
Above are the best cryptocurrencies to invest in 2022 for the long and short. The future is now with cryptocurrency.
If you want to invest in cryptocurrencies, you need to know about risk factors and find a trustworthy exchange where you can buy, sell, and trade cryptocurrencies like Bitcoin, Ethereum, etc.
FAQ
Which cryptocurrency will rise in 2022?
Bitcoin is one of the world’s most powerful cryptocurrencies. Despite massive volatility, BTC remains the top cryptocurrency. Its price dropped recently, but experts predict it will rise again and end the year at US$100,000.
Can you make money with Cryptocurrency?
Yes, you can make money with cryptocurrency. The risk is high, but there’s a chance you may reap the benefits as well – even if you lose your entire investment. A prudent investor should always keep their eyes open before investing in bitcoin or other cryptocurrencies.
Is Cryptocurrency the future?
Researchers expect that by 2030, the cryptocurrency market will have tripled, hitting a value of nearly $5 billion. Irrespective of whether they choose to buy into cryptocurrency or not, investors, businesses, and brands will be unable to ignore the growing popularity of this technology for long.
