3 Cryptos That Have the Potential to Be the Next Big Thing
InvestorPlace - Stock Market News, Stock Advice & Trading Tips The cryptocurrency universe is rapidly expanding and a number of cutting edge cryptos are presenting growth opportunities. The post 3...
There’s more to cryptocurrencies than Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD). There are, in fact, thousands of cryptocurrencies available around the world. While most of them are small and not worth investing in, there are a number of newer digital coins and tokens that are emerging and growing at a fast clip, and investors looking into cryptos have a wide variety of choices.
As the universe of digital assets expands, so too are the offerings available to investors. And many of the latest, cutting edge cryptocurrencies have a real function and utility behind them. In short, they are worth investors’ time and capital.
Here are three cryptos to put on your radar as the next big things in cryptocurrencies emerge:
Cryptos to Watch: Polkadot (DOT)
Polkadot is not a household name (not yet anyway), and it has only been around since May 2020. However, the cryptocurrency is a fast riser. Since its debut, the price of DOT has grown as high as 1,000% and today trades right around $31 per coin, close to a 700% increase from when CoinMarketCap began tracking its price in August 2020.
Many cryptocurrency bulls foresee big things ahead for Polkadot. A proof-of-stake cryptocurrency that provides interoperability among different blockchains, Polkadot has plenty of utility that makes it a valuable commodity in the cryptocurrency sphere. Essentially, Polkadot enables various cryptocurrency systems to communicate and work together. This bridge function explains the rapid price appreciation of Polkadot.
Polkadot distinguishes itself from Ethereum because it allows developers to create their own blockchains (called parachains) while also using the security that Polkadot’s chain has built into it. Polkadot has proven to be one of the most secure cryptocurrencies and is well-protected from cyberattacks.
Created by Gavin Wood, one of the core founders of Ethereum, Polkadot today has a market capitalization of roughly $31 billion and continues to grow at a rapid rate as developers flock to the technology and use it to expand their existing cryptocurrency systems.
Tether was one of the very first “stablecoins.” A stablecoin is a cryptocurrency that has its market value pegged to a traditional currency such as the U.S. dollar to help reduce volatility.
Created in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner. Effectively, Tether allows individuals to utilize a blockchain network and related technologies to transact in traditional currencies while minimizing the volatility and complexity often associated with digital assets.
And while Tether is not nearly as well known as Bitcoin and Ethereum, it is currently the fifth-largest cryptocurrency by market capitalization, with a value approaching $70 billion. Tether is a great option for investors who want to avoid some of the volatility and big price fluctuations seen in cryptocurrencies such as Bitcoin.
Investors who are tentative or on the fence about cryptocurrencies should consider a more stable option such as Tether, which is tied directly to the greenback. Tether fluctuates slightly in price, although it stays close to exactly $1 — in the last year, it hasn’t dipped below 99.8 cents, and it has only risen above $1.004 once in the last year in April.
Cryptos to Watch: Chainlink (LINK)
Chainlink is a cryptocurrency that serves as a central component in decentralized finance (DeFi). Specifically, Chainlink fills in the gaps between smart contracts and financial data. Chainlink is a crucial link for blockchains and a necessary building block in decentralized finance networks.
Chainlink enables smart contracts to essentially communicate with outside data so that contracts can be executed based on data that Ethereum cannot connect to on its own. For this reason, many cryptocurrency insiders have been buying LINK, which is currently worth a bit more than $27 per coin, giving it a market capitalization of $12.5 billion.
Another one of the top cryptos, Cardano (CCC:ADA-USD), announced recently that it is integrating Chainlink’s decentralized oracles with the goal of enabling developers to seamlessly build smart contracts on top of Cardano’s blockchain. The developers behind Cardano have said that by integrating tamper-proof, high-quality external data with existing blockchains, digital agreements can be executed automatically under predefined conditions. If it works, the integration with Cardano could be a game changer for Chainlink and take the burgeoning crypto to the next level.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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