Seven of the top cryptos to buy for April.
The world’s top cryptocurrencies rallied in March after suffering a tough start to the year. Risk assets, including stocks, sold off in the early months of 2022, spurred by rising inflation, expectations for more aggressive interest rate hikes and the tragic escalation of the Russia-Ukraine war. Entering April, however, digital assets have recovered some momentum. An executive order from President Joe Biden on March 9 outlined a “whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.” This effort to formalize cryptocurrency regulation was seen as bullish, as it should remove hurdles to larger investors getting into the space. And while the value of the asset class rose 9.4% in March, the market capitalization of all digital currencies is still just over $2 trillion, making each of Apple Inc. (ticker: AAPL) and Microsoft Corp. (MSFT) more valuable than all digital currencies in the world. Here are seven of the best cryptocurrencies to buy for April.
Let’s get the big names out of the way: Bitcoin is both the first cryptocurrency and the world’s most valuable crypto, with a market cap above $860 billion. The crypto market is still defined by the original digital coin, with non-BTC tokens known as “altcoins” and the evolution of the space gauged in part by a metric called “Bitcoin dominance,” which measures Bitcoin’s market cap as a percentage of the market cap of all cryptocurrencies. More useful as a store of value than for the utility of its network, BTC tends to fluctuate less than less valuable tokens. Therefore, it’s arguably best suited for less aggressive or newer crypto investors. The price of Bitcoin rose 5.4% in March, underperforming the overall market’s 9.4% monthly advance.
Although far newer than Bitcoin — Ether burst onto the scene in 2015 — ETH has earned a spot as the undisputed second-fiddle to BTC over the years. The big innovation of the Ethereum network was to bring the capability of smart contracts and the burgeoning field of decentralized finance, or DeFi, into play. DeFi, in a nutshell, is an expansive area of finance defined by the lack of traditional financial intermediaries like banks, brokers and centralized exchanges. It theoretically allows for trustless peer-to-peer financial transactions, cutting out third parties and saving users time, money and hassle. Ethereum, which is the most-used blockchain in the world and the default chain on which the most popular non-fungible tokens are traded, still faces one major hurdle: Until Ethereum 2.0 launches, the network is plagued with high and arguably unsustainable transaction fees. Ether, the native currency for the Ethereum blockchain, rose 12.4% in March.
While some investors may debate the merits of buying Bitcoin vs. Ethereum, the more interesting question for serious crypto investors is about which network will end up dominant in DeFi. The addressable market is massive, so while Solana is the fourth-most-valuable cryptocurrency — excluding stablecoins — with a market cap of about $42 billion, that’s still just a tenth of Ether’s market cap, leaving plenty of upside if Solana becomes at all competitive with Ethereum. For now, Solana has a big advantage over ETH, as its blockchain charges minimal transaction fees. Every day that the lower-fee Ethereum 2.0 is delayed encourages greater user adoption and decentralized app, or dApp, development on Solana’s ecosystem. SOL jumped 23.3% in March alone and is still nearly 50% off all-time highs set just five months ago.
Another resilient token and one of the best cryptocurrencies to buy now is LUNA, the native token of the Terra blockchain protocol. LUNA differs starkly in function from the cryptos previously mentioned; investors can think of it simply as a bet on the growing popularity of stablecoins — a particular type of cryptocurrency whose value is pegged to fiat currency. The LUNA token’s value is directly related to the adoption of Terra-based stablecoins like UST, which is pegged to the U.S. dollar. When there’s more demand for UST, LUNA tokens are burned, increasing the value of each token, while more LUNA tokens are created when people sell out of UST, diluting LUNA’s value. That’s been good for LUNA owners, as the UST market cap has soared from its November 2020 debut of $13.3 million to a market cap of $16.6 billion and the LUNA price has rallied from 41 cents to $116 as a direct result.
Binance Coin (BNB)
Forget Coinbase Global Inc. (COIN). If you’re truly bullish on cryptocurrency as a global asset class that transcends borders, wagering on the world’s largest crypto exchange is a wise bet. BNB is the native cryptocurrency of Binance, which is the planet’s most dominant cryptocurrency exchange. Although not quite in the same league as Bitcoin and Ether, BNB isn’t far off, with the third-largest market cap among tokens — when you exclude stablecoins — at about $75 billion. Binance gained 8.4% in March. Trading data from late March shows 24-hour volume on Binance at nearly $22 billion, compared with just $3.3 billion for rival Coinbase.
Next up among the best cryptocurrencies to buy this month is Aave, another player in the DeFi space. With a market cap of just $3.2 billion, Aave is the smallest project on this list, and with smaller market caps, more volatility tends to follow. That’s bad in bear markets and a major plus in bull markets, as evidenced by Aave’s remarkable 53.2% rally in March. As far as the project’s merits, Aave is known as a decentralized lending protocol, allowing users to take out loans in about 20 different cryptocurrencies. Another net positive for investors: 85% of all Aave is already mined and in existence, leaving less remaining dilution than many other projects.
Last but not least among the best cryptocurrencies to buy now is Uniswap, the native token of the Uniswap trading protocol and decentralized exchange. Uniswap is a great example of the DeFi services crypto can offer, taking the role of an automated market maker — key players in both crypto and stock markets that provide liquidity and help facilitate trades for participants. While there are other competitors like SushiSwap and PancakeSwap on the market, Uniswap is easily the largest decentralized exchange, controlling about one third of the market by trading volume. The UNI token, which rose 7.1% last month, should thrive alongside the popularity of its associated platform.
7 best cryptocurrencies to buy now:
— Bitcoin (BTC)
— Ether (ETH)
— Solana (SOL)
— Terra (LUNA)
— Binance Coin (BNB)
— Aave (AAVE)
— Uniswap (UNI)
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What’s the Best Cryptocurrency to Invest in Now? 7 Contenders originally appeared on usnews.com
Update 04/05/22: This story was published at an earlier date and has been updated with new information.