3 Cryptos to Buy in a Bear Market

The implosion of FTX, a previously trusted exchange that has garnered a high profile even from casual investors thanks to its extensive marketing, has given a black eye to a space that has already taken its clumps this year.

However, while many investors have sold their cryptocurrencies during the current crypto winter, for every seller there is a buyer, and some of them are long-term investors who believe in the cryptocurrency’s potential. Chaos can provide good buying opportunities. Here are three cryptos that risk-tolerant investors should buy during the current bear market.

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1. Ethereum

ether (ETH -1.35%) is up 26% since its June low but sold off after FTX filed for bankruptcy. However, this could be a case of throwing the baby out with the bathwater as Ethereum is a decentralized, mainstream cryptocurrency that bears little relation to FTX. No single entity controls Ethereum, and over 70 million users worldwide help validate transactions and secure the Ethereum network, in stark contrast to cryptocurrencies like Ethereum FTX Token and many of the other newer cryptocurrencies issued by exchanges and other centralized entities.

This year, Ethereum users welcomed the long-awaited move to Proof-of-Stake consensus known as The Merge, which drastically reduced Ethereum’s carbon footprint and paved the way for sharding (which eventually resulted in faster transactions and lower fees will lead when it is implemented the next upgrade) and opened up the opportunity for more Ethereum users to earn rewards for participating in the network, using their holdings to validate transactions and secure the network.

The ability to easily earn staking rewards also increases Ethereum’s appeal as an investment. A user must stake at least 32 Ether to run their own validator, but there are many services that stake your Ethereum for you, allowing you to earn returns that rival the payouts you can get from popular dividend stocks as well as 10-year treasury bills.

The $180 billion cryptocurrency is by far the largest smart contract platform, making it the de facto gateway for larger institutional investors looking to enter the world of decentralized finance (DeFi). JPMorgan Chase recently tested the waters of decentralized finance with its first-ever DeFi trade. The trade was executed on polygon Blockchain, a Layer 2 network on Ethereum. Large decentralized exchanges like Uniswap, dYdX, and others based on Ethereum. If more traditional financial heavyweights meddle in decentralized finance, Ethereum will be their first stop.

With new post-merge capabilities like the ability to earn rewards for staking and its position at the gateway to the world of DeFi, Ethereum looks like a top cryptocurrency to buy during the bear market.

2. Bitcoin

like Ethereum, Bitcoin (BTC -0.51%) is a decentralized cryptocurrency that stands out from the crowd. The original crypto is also the original decentralized asset. There is no leader or central authority controlling the Bitcoin network – meaning there is no entity that can make a bad decision or act in a way that destroys Bitcoin’s value. A network of miners around the world secures the bitcoin network by solving complex mathematical equations to validate transactions and earn more bitcoin. Bitcoin is also transparent in that all transactions appear on its blockchain, which is publicly viewable.

Bitcoin is the oldest and largest cryptocurrency, and as a gateway to cryptocurrency, it will benefit as more institutional investors and corporations test the cryptocurrency’s waters. While the FTX saga has certainly set crypto adoption back a few steps, the overall tide is turning towards bitcoin and cryptocurrency as a whole.

On October 11th Bank of New York Mellonthe world’s largest custodian, announced it would offer cryptocurrency custody. alphabet recently announced to use it coin base to accept payments with bitcoin for its Google Cloud services and MasterCard announced that it would offer its services to enable traditional banks to offer cryptocurrency trading.

As the world continues to move toward crypto adoption, Bitcoin is best placed to push cryptocurrency forward.

3. Litecoin

Litecoin (LTC -4.46%) is a big crypto that managed to avoid being dragged down in the current sell-off, and the proof-of-work crypto is up a surprise 16% over the past month. The $4 billion cryptocurrency, which started as a fork of Bitcoin in 2011, is enjoying a modest rebound, rallying 53% since its June low.

Litecoin surges as the network hash rate hits new all-time highs, indicating increasing interest in Litecoin and more competition in earning Litecoin through mining. Litecoin also benefited from the news that it will join Bitcoin and Ethereum as the digital assets that will be available Moneygram Internationalpayment platform from . Like Bitcoin and Ethereum, Litecoin is one of the cryptocurrencies that Google Cloud will accept for payment, giving increased credibility to the 16th largest crypto by market cap. Perhaps renewed interest in decentralized proof-of-work assets and growing adoption will continue to propel Litecoin higher.

The current crypto winter has been a difficult one for investors, but this bear market is also an opportune time for long-term, risk-tolerant investors to accumulate more tokens at lower prices before market sentiment turns positive again.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Michael Byrne has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Bitcoin, Coinbase Global, Inc., Ethereum, JPMorgan Chase, Mastercard, Polygon, and Uniswap Protocol Token. The Motley Fool has a disclosure policy.

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