How to invest in cryptocurrencies and which crypto assets to choose to get a good return? These are questions that investors recently landed in the “city of crypto” are asking.
Not all altcoins, in fact, are “good” to invest in them only because they go up so much in price and in a short time. An example above all, shiba inu (SHIB), but also exploits such as that of the dogecoin (DOGE) at the beginning of 2021.
We want to present here, then, 7 main cryptocurrencies to invest in 10 thousand euros, and explain for each the reasons that the investor should consider before adding it to his crypto portfolio.
So let’s see how to invest in cryptocurrencies with the greatest guarantees of:
For some it may seem trivial, while for others it may seem obvious. In any case, investing in bitcoin cryptocurrency (BTC) is fundamental, since it is the first ever and for this reason BTC is the driver of the market in many cases.
Considered a payment currency, a custodian of the value of our finances and often even compared to gold, bitcoin is a risky financial asset but included in numerous financial instruments and products.
There are not a few bitcoin futures, as well as ETFs linked to the price of the cryptocurrency and ETPs.
Various asset management companies specializing in cryptocurrency trading place bitcoin at the base of each of their funds.
The risk of investing in this crypto comes from its high volatility. Despite the asset being over 12 years old, the reference market is still small and therefore very susceptible to news (positive and negative).
Ethereum is the blockchain platform that is giving the digital world a strong evolution. Non-fungible tokens (NFTs), for example, intend to digitize art or in any case give birth to a new form of authentic and authenticated art by blockchain technology.
The cryptocurrency here is ether (ETH), and it is the second largest by market capitalization right behind bitcoin. However, if we add up the market capitalization of the numerous tokens generated on the Ethereum blockchain, the market capitalization of the ecosystem would far exceed Satoshi Nakamoto’s cryptocurrency.
Smart contracts have found one of their first concrete applications here and the countless decentralized apps that have sprung up in recent years are proof that Ethereum is a strong “game changer”.
The software that manages the ecosystem is at a delicate and important turning point, so the critical issues in the project are not lacking, but it is undoubtedly one of the cryptocurrencies in which to invest.
Cardano’s blockchain platform was born a couple of years after Ethereum. From the beginning it has set up its development following a “policy” of small steps to ensure progressive development without too many setbacks and steps backwards.
The recent growth of its ADA cryptocurrency is a response to the strides its developers have made. In fact, Cardano has also implemented smart contracts as required by its roadmap.
Through future enhancements of the protocol that manages smart contracts, Cardano could become a serious competitor of Ethereum. If it is able to attract important projects, it is to be expected that ADA will discover new prices.
Some critical issues are to be taken into consideration. Cardano is developed by a single development company, IOHK, while the platform is protected by a Foundation. The project, therefore, appears to be less open than others to the developer community and more managed by a circle.
While no longer occupying the top spots by market capitalization, litecoin (LTC) has for many years been the most important cryptocurrency after bitcoin.
The advancement of other projects and blockchains have taken away a lot of light from LTC, however, from the point of view of system development, litecoin remains the test bed where the most important changes are tested before implementation in the Bitcoin protocol.
At the moment LTC appears to be following the market trend very passively, having not proposed any further innovations to its ecosystem for at least a year. However, a small percentage of the 10 thousand euros to be invested in crypto could be allocated to this asset because it is among the longest-lived in the landscape.
Ripple’s non-profit twin, Stellar (XLM) is gaining some prominence around this time due to the legal issues Ripple Labs is having with the United States Securities and Exchange Commission (SEC).
MoneyGram, for example, ended its partnership with Ripple earlier this year and decided to create its cross-border fast payment network on Stellar.
The decentralized platform is interesting because it differs from many other projects and, together with Ripple (XRP), they represent a bit of a unicum. This system has in fact the purpose of favoring the movement of money from one part of the world to another at low cost and within a few seconds.
We can consider Stellar and Ripple the heirs of the old cross-border payment systems that took days to transfer sums of money from Italy to Australia or other countries.
The adoption of such systems by traditional payment processors, such as the aforementioned MoneyGram, could bring a benefit to the value of XLM. However, such platforms could see competitive competitors emerge even outside the blockchain sphere.
Undoubtedly a meme coin and for this reason it should not be included among the top 7 cryptocurrencies in which to invest 10 thousand euros … But how can you ignore dogecoin (DOGE) if the altcoin is often among the top 10 cryptocurrencies by market capitalization?
It should be emphasized the goliardic character of the cryptocurrency DOGE, it has no objective other than to represent the “ironic” side of the world of cryptocurrencies.
The software has not been updated with significant changes in a long time, which could also expose it to vulnerabilities in the long run.
If added to the portfolio, DOGE should be considered the most speculative component of all.
USDT or USDC
Finally we also consider a stablecoin between tether USD (USDT) and USD coin (UDSC). While stablecoins maintain low volatility against the dollar, the same cannot be said against the euro, as the price chart on Kraken.com shows.
Including a stablecoin within a financial portfolio that invests in cryptocurrencies should be seen as a risk reduction strategy. It should represent the least volatile and therefore the most stable part of the portfolio.
Furthermore, some platforms guarantee high interest on stablecoins (even in the order of 8%) if deposited and held for a long time.
On the other hand, stablecoins are highly threatened by regulators and some central banks, which see this type of digital currency as a threat to the stability of their monetary policies.
Some might have been surprised by the fact that among the 7 cryptocurrencies in which to invest 10 thousand euros we have not included projects such as: Solana (SOL); o Polkadot (DOT); or the token binance coin (BNB).
For the first two the reason is related to their young age. Unlike other decentralized blockchain projects presented in this guide, SOL and DOT are very young and have yet to prove they can withstand intense stressful situations.
BNB, on the other hand, is closely linked to the Binance exchange. If the latter were to fail, BNB would no longer have any value on the market in a single instant.
This article was originally posted on FX Empire