In less than 15 years, cryptocurrencies emerged from obscurity to become an important part of financial markets. But there’s one thing the industry’s evolution hasn’t eradicated: extreme volatility. As a parade of highly visible failures, implosions and frauds harangued digital assets last year, the crypto market as a whole erased 63% of its value in 2022 alone. Of course, that can work the other way, too, and crypto prices are up an impressive 75% this year through Nov. 16.
If you’re not willing to endure such violent swings, you simply shouldn’t own cryptocurrencies. And if you do get into crypto, there are thousands of coins to choose from, each one with different dynamics. It’s daunting. Here are six of the best cryptocurrencies to buy now:
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Cryptocurrency is an incredibly nascent asset class, with origins only dating back to 2009. As 2022 showed, extreme volatility is par for the course, so investors looking to insulate themselves from the potential total collapse of their holdings will want to go with more established names. None is more established than Bitcoin, the first cryptocurrency and largest by market capitalization with a valuation of about $713 billion, or more than 51% of the overall market.
BTC boasts the most mainstream acceptance of any of the top cryptocurrencies, with several publicly traded instruments tracking its performance, alongside publicly traded stocks such as MicroStrategy Inc. (ticker: MSTR) and Tesla Inc. (TSLA), among others, that hold Bitcoin on their balance sheets. After a 64% decline in 2022, Bitcoin has been staging an epic comeback in 2023, rallying 118.5% through Nov. 16.
While BTC was already doing quite well in the early months of 2023, the leading cryptocurrency saw gains re-accelerate in March as the government guaranteed that Silicon Valley Bank depositors would indeed have access to all their funds at the failed bank. The federal government’s decision to step in and guarantee liquidity for the tech- and startup-focused lender shored up confidence in both the banking sector and cryptocurrencies.
Crypto has been the most lucrative asset class of 2023 so far. A general market comeback — coupled with undermined confidence in the financial sector — has boosted confidence in assets like Bitcoin, which emerged as a response to the global financial crisis and the bank bailouts that ensued.
The cherry on top for Bitcoin and other cryptocurrencies has come in recent months, as several favorable readings on inflation seem to indicate prices are rising more slowly, implying the Federal Reserve may not need to continue with its rate hikes.
Second by market capitalization is Ether, which is the native token on the widely used Ethereum blockchain. Often colloquially referred to as Ethereum, ETH’s market cap is about $233 billion and accounts for about 17% of the total cryptocurrency market. Unlike Bitcoin, Ether’s underlying network is far more than just a tool for peer-to-peer payments; the Ethereum blockchain is custom-made for smart contracts and decentralized finance tools, as well as for so-called Web3 applications and the trading of non-fungible tokens, or NFTs.
Unlike Bitcoin, which only functions as a speculative asset and a store of value, Ether has inherent utility as the native token of a wildly popular network. Plus, Ethereum’s switch from the energy-inefficient proof-of-work protocol to the much more efficient proof-of-stake system gives it a leg up on BTC in an increasingly environmentally conscious world. ETH is up 63.8% in 2023 through Nov. 16.
When investing in cryptocurrency, investors should understand that it’s Bitcoin and Ether in their own tier, and then there’s everything else. AVAX and the following altcoins on this list all have more risk, and investors should factor that into their decisions. AVAX and the rest of the coins mentioned should be considered purely speculative wagers.
Caveats aside, the Avalanche network’s AVAX token earns its place on this list by virtue of the ambitious goals of the Avalanche blockchain.
Avalanche’s subnets feature allows users to deploy their own mini-blockchains on top of its network. Developer Ava Labs envisions a future in which most mainstream commercial entities and even many individuals will want their own blockchains, with Avalanche subnets offering a convenient solution to that problem. If that reality materializes, then AVAX, which plunged 90% in 2022’s bear market, could emerge as a longer-term winner. AVAX has roughly doubled this year, adding 99.6% in 2023 through Nov. 16.
Excluding stablecoins, MATIC is now the 10th-largest cryptocurrency by market cap, with a capitalization of about $7.6 billion. Still constituting less than 1% of the overall market size, Polygon has plenty of room to grow. That said, its future success is largely tied to the acceptance and ongoing usage of the Ethereum network. That’s because the Polygon network is a scaling platform that aims to increase the capabilities of Ethereum, allowing it to eventually run a potentially limitless number of decentralized applications, or dApps.
Like practically all other tokens, MATIC’s price suffered in 2022, losing 70% of its value in the year. Up until early June, the token benefited from the broad recovery in crypto prices, with MATIC up around 20%. That boost was short-lived, however, as a lawsuit filed by the Securities and Exchange Commission against Coinbase Global Inc. (COIN) claimed MATIC and several other altcoins were functioning as unregistered securities. MATIC took a hit on the news and has only recently recovered, benefiting from the slowing pace of inflation in recent months. The coin is now up 11.6% year to date through through Nov. 16.
Founded in 2017 by Ethereum co-founder Charles Hoskinson, Cardano is a proof-of-stake blockchain and one of the largest blockchains to successfully run that more energy-efficient protocol. Cardano aims to foster a developer-friendly ecosystem for dApps. Unlike Ethereum, Cardano has a hard cap on the number of coins that can ever exist, topping out at 45 billion. Thankfully for investors, around 36.4 billion, or more than 78%, of that supply is already in circulation, meaning the amount of overall dilution remaining is both known and relatively limited.
One of the best cryptocurrencies to buy now, Cardano shed 81% in 2022 but has been rallying in 2023, posting a year-to-date gain of 50.8% through Nov. 16. Excluding stablecoins, Cardano ranks sixth by market cap among cryptocurrencies, with a valuation of about $12.9 billion.
Last and least valuable by market cap is ATOM, the native token of the Cosmos Hub blockchain. ATOM is more than just a means for securing the network. It’s also a governance token, giving holders a say in how the Cosmos ecosystem should evolve. One issue with the nascent cryptocurrency space is that there are so many different, independent blockchains. This is a challenge that Cosmos aims to alleviate by making inter-blockchain communication easier, faster and less expensive. Cosmos’s ultimate aspiration is to make blockchain technology more accessible for both coders and end users, which could pay off if blockchain tech becomes as ubiquitous as some optimists in the space expect.
ATOM, at a current valuation of roughly $3.5 billion, lost 71% in the 2022 bear market. The speculative ATOM struggled for much of this year, but it has recently rallied to recover from its losses and is now up 2.6% in 2023 through Nov. 16.
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Update 11/17/23: This story was previously published at an earlier date and has been updated with new information.