After a rollercoaster 2023, things are looking up for the crypto market. The US Securities and Exchange Commission (SEC) recently approved the listing of spot Bitcoin ETFs from eleven different organisations, including heavyweights like BlackRock and Fidelity.
The SEC approval has naturally got retail investors curious about cryptocurrencies. They are now asking: "What do I invest in?" This article delves into the ten most promising cryptocurrencies to invest in 2024. Established titans like Bitcoin and Ether are going to be portfolio mainstays. But rising stars like Solana and Injective are also vying for a piece of the digital future.
Prepare yourself, as 2024 promises to be a profitable year for crypto investors.
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Top cryptocurrencies to invest in 2024
We take a look at the top coins and tokens to invest in 2024 below.
Bitcoin (BTC)
The world’s first cryptocurrency, Bitcoin, has the largest market capitalization. Its established network, limited supply, and growing institutional adoption make it a relatively safe haven in the volatile crypto market.
Bitcoin grew by 155% from the start till the end of 2023. These returns are better than anything you'd get from investing in traditional financial assets, albeit at a slightly higher risk. With the impending ETF approval, halving, and potential rate cuts from the US Fed, Bitcoin is poised to reach greater heights in 2024.
Ethereum (ETH)
The go-to platform for smart contracts and dApps, Ethereum fuels the burgeoning field of decentralised finance (DeFi). Despite intense competition from other Layer 1 blockchains, many institutional investors rely on Ethereum owing to its security and mature ecosystem.
Because of this interest from institutions, we feel it’s an excellent asset for HODLing. The upcoming EIP-4844 proposal could reduce gas fees significantly on Layer 2 blockchains piggybacking on Ethereum. This would be another win for Ethereum and could further boost its value.
Solana (SOL)Boasting lightning-fast transaction speeds and low fees, Solana has attracted a thriving ecosystem of DeFi and NFT projects. Its continued focus on scalability and developer experience makes it a strong contender in the high-performance blockchain space.
According to data from crypto data provider CryptoSlam, NFT sales on the Solana blockchain ($366.5 million) exceeded those of Ethereum ($353.2 million) for the first time in December 2023. This strong interest in Solana from retail users.
Cardano (ADA)Built with meticulous research, Cardano boasts a secure and scalable blockchain. Its focus on sustainability and smart contracts makes it a long-term player with a commitment to responsible growth.
ADA is not just a speculative asset. People are exploring it for various real-world applications, including supply chain management, identity verification, and voting systems. These real-world use cases grant ADA value, making it a great addition to crypto portfolios.
Polygon (MATIC)Polygon is a popular Layer-2 scaling solution for Ethereum, meaning it helps transactions on the Ethereum blockchain become significantly faster and cheaper.
Other Layer-2 scaling solutions have emerged since Polygon's debut in October 2017, but it still stands tall as a popular option in DeFi. Several popular dApps like Uniswap, Curve, Chainlink, and more have integrated Polygon into their ecosystems.
In the future, Polygon aims to offer its scaling solutions to other blockchains. It also plans to provide interoperability between different protocols and blockchains.
Due to Polygon's successful track record and its goals to solve real-world problems, MATIC is an excellent coin to invest in.
Avalanche (AVAX)
Avalanche (AVAX) is gaining popularity by challenging Ethereum with its lightning-fast transactions. In 2023, it grew by a whopping 254%, despite market ups and downs. The constant growth comes from its expanding ecosystem, new dApps, and partnerships. With low fees and scalability, it attracts users and developers looking for a faster and cheaper option than Ethereum.
In the future, Avalanche aims at DeFi, NFTs, and business solutions. With a strong team and community, 2024 seems promising for AVAX. If it grabs a big share in DeFi and NFTs, AVAX could become a major player in the blockchain world.
Polkadot (DOT)Think of Polkadot (DOT) as the Internet for Blockchains. It connects different blockchains, letting them share data and work together. This ‘multichain’ approach breaks down barriers and unlocks new possibilities.
While 2023 wasn't a record growth year for DOT, its potential for the future is huge. Developers can build custom blockchains on Polkadot, making it ideal for everything from DeFi to healthcare.
Plus, security is a top priority. Polkadot's central chain keeps everything safe and sound.
With DeFi booming and NFTs making a comeback, Polkadot's interoperability could be key to their success.
Injective (INJ)
This Layer-1 blockchain caters to all sorts of DeFi applications, including decentralised exchanges (DEXs), prediction markets, and lending protocols – all on-chain and lightning-fast. Like Ethereum, it has excellent support for smart contracts.
Injective provides plug-and-play modules that developers can use to build cutting-edge financial applications. Its token, INJ, fuels the platform, letting you vote on upgrades and potentially share in its growth.
INJ's price skyrocketed towards the end of 2023, going from about $8 at the start of October to about $40 at the end of the year, a massive 5x growth! Overall, things are looking promising for Injective in 2024.
Uniswap (UNI)
Uniswap (UNI) is a decentralised exchange (DEX) where you can trade directly from your own wallet. Unlike a centralized exchange (CEX) like Binance, you keep complete control of your funds, so there's no risk of your assets being frozen.
As a DEX, Uniswap also doesn't use the traditional order book model. Instead, it facilitates peer-to-peer exchange of tokens. This means that users can trade directly with each other, cutting out the middleman and reducing trading fees.
UNI is the platform's native token, and it gives users a say in how Uniswap evolves. They can vote on proposed changes to the protocol, which can have a big impact on the platform's future.
Cosmos (ATOM)Cosmos is unique in that it's designed to connect several blockchains to communicate seamlessly.
Its potential for mainstream adoption is high, making its native token (ATOM) a valuable addition to crypto portfolios in 2024.
The Best Way to Invest in Altcoins
While you may invest in your preferred cryptocurrencies individually, a better approach is to invest in crypto as an index fund. And Mudrex's Coin Sets allow you to do just that.
Coin Sets are curated collections of cryptocurrencies that are grouped based on themes or as index funds. You manage your risk better by investing in a basket of cryptocurrencies as opposed to hand-picking individual coins. Gains in other assets can offset a drawdown in an individual asset.
As an example, take Mudrex's Crypto Blue Chip Coin Set. It's a crypto index fund that tracks the performance of the top 5 cryptocurrencies by market capitalisation. If you want broader exposure without having to rely on heavyweights like Bitcoin and Ethereum, you might want to check out the Crypto Broad Market Index instead.
Our criteria for selection
Investing in cryptocurrencies requires careful consideration beyond mere hype. To make informed decisions about what to invest in, focus on these five key criteria:
Technology
Dive deep into the blockchain technology underpinning the cryptocurrency. Assess its scalability, security, decentralization, and innovation potential. Are there unique mechanisms that address existing blockchain challenges? Does it offer interoperability with other platforms?
Evaluating the technology helps gauge the cryptocurrency's potential for future growth and adoption.
Team
Scrutinize the team behind the project. Do they have relevant expertise and experience in blockchain development and business? Is their track record transparent and credible? Are they actively engaged with the community and responsive to feedback?
Utility
A compelling use case is vital. Does cryptocurrency solve a real-world problem or offer a clear value proposition? How does it differentiate itself from existing solutions? Is there sustained demand for its functionality within its target market?
If a cryptocurrency has a practical use case or two, it is more likely to succeed and have long-term value.
Market Demand
Analyse the market demand and adoption rate for the cryptocurrency. Is there a growing user base and developer community? Are established institutions or businesses embracing its use? Has its trading volume and liquidity increased steadily?
Recent market performance
While past performance is not indicative of future results, historical price movements can offer valuable insights. Understand the factors driving both short- and long-term price fluctuations. Be wary of extreme volatility and sudden spikes, as they may suggest speculative hype rather than sustainable growth.
By studying these five criteria, you can gain a deeper understanding of a cryptocurrency's potential and make informed investment decisions based on its individual strengths and weaknesses. Remember, thorough research, a diversified portfolio, and risk management are crucial in the world of crypto.
Understanding risks and considerations
Cryptocurrency investment presents both compelling opportunities and inherent risks. While the potential for high returns can be alluring, you must understand the risks of this new market. Below are some risks and considerations to think about before beginning your investing journey:
Volatility
Unlike traditional assets, cryptocurrencies undergo significant price fluctuations. Rapid uptrends and equally swift downturns often characterise these fluctuations. For example, Bitcoin's price dropped by almost $3,000 on January 3, and no significant news that day could've caused it!
This inherent volatility carries a substantial risk of loss. We can't emphasise the need for risk management and responsible investment strategies enough.
Regulatory Landscape
India's regulatory framework surrounding cryptocurrencies remains in flux. This is in spite of crypto investors filing taxes for the first time last fiscal year. This dynamic environment can give rise to disruptions and uncertainties, meaning you have to stay informed about evolving regulations and their potential impact on the market.
Technological Risks
Blockchain technology, while innovative, is still undergoing significant development. Technological imperfections, bugs, and vulnerabilities can lead to network disruptions, transaction delays, and even security breaches. These risks can jeopardize the value and functionality of invested assets.
Fraud and Scams
Where there's money to be made, there will always be malicious actors looking to exploit the gullible. And the world of cryptocurrencies isn't any different. Sophisticated phishing scams, fraudulent projects, pump and dump schemes, and unregulated exchanges pose significant threats to unwary investors.
Conclusion
The year 2024 paints a vibrant picture for crypto enthusiasts. With the confluence of bullish signals like the Bitcoin ETF approval, Bitcoin halving, and potential Fed rate cuts, we might witness some explosive growth this year.
This isn't a solo show for Bitcoin, though. Altcoins like Solana, Cardano, and Uniswap are carving their own niches, fueled by innovative technology and robust ecosystems. Meanwhile, established platforms like Ethereum and Avalanche are constantly evolving, solidifying their positions as cornerstones of the DeFi and NFT landscapes.
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(This article is generated and published by ET Spotlight team. You can get in touch with them on [email protected])
