Are you looking for the best long-term cryptocurrency investments? With over 18,000 different coins and tokens on the market, investor interest is growing rapidly. But with so many options, it can be overwhelming to decide which ones to invest in. To help you get your bearings, here are the top 10 cryptocurrencies by market capitalization, or the total value of all coins currently in circulation. Bitcoin is a volatile asset, and its price can fluctuate day by day.
However, it has been the best-performing investment asset for the past 10 years, and a recent network upgrade to add functionality could make the currency more valuable. Ethereum is also in the process of being updated, with a protocol change called The Merge that will improve scalability, security and sustainability of the network. Cardano's popularity among decentralized app developers could keep demand for its ADA token high. If you're planning to invest in cryptocurrencies for the long term, it's important to keep your investments small and never place cryptocurrency investments above any other financial goal, such as saving for retirement and paying off high-interest debts.
Instead, keep your investments in the market for long periods to achieve the best return on investment. Regulatory announcements can also affect the price of cryptocurrency in already volatile markets. Ethereum is a decentralized software platform that allows you to create and execute smart contracts and decentralized applications (DApps) without any downtime, fraud, control or interference from third parties. Cardano (ADA) is a “Ouroboros proof of stake” cryptocurrency that was created with a research-based approach by engineers, mathematicians and cryptography experts. Polkadot (DOT) is a unique PoS cryptocurrency aimed at offering interoperability between other blockchains.
Stellar (XLM) is an open blockchain network designed to provide business solutions by connecting financial institutions for large transactions. Binance Coin (BNB) is a utility cryptocurrency that works as a payment method for fees associated with trading on Binance Exchange. Adam Hayes, PhD, D., an expert in behavioral economics and finance, recommends keeping any cryptocurrency investment below 5% of your total portfolio and never investing anything you don't agree to lose. He also suggests that if you think blockchain-based technology will explode in the future, investing in cryptocurrencies in the long term may be a great option. This type of crypto investment is when its price is expected to increase over time, usually an investment that must be held for a minimum of 6 months to 1 year. The IRS has an obvious interest in making sure investors know how to declare virtual currency when they file their taxes.
The rise of metaverse games, worlds, products and experiences is increasing the popularity of altcoins, which has changed investor sentiments about Bitcoin (known as the original cryptocurrency). Bitcoin's past may provide some clues as to what to expect looking ahead. And around the world they are trying to figure out how to establish laws and guidelines to make cryptocurrencies safer for investors.