2 Cryptocurrencies That Could Double Your Money
These crypto-assets should continue to grow regardless of overall market conditions
Investors and traders are constantly looking for top cryptocurrencies with the potential to generate massive returns in the future. Bitcoin and Ethereum, the two largest digital assets (by market cap), are widely regarded as the 2 cryptocurrencies that could double your money, thanks to their solid fundamentals and rising adoption rates.
But what is it that makes Bitcoin and Ether the top investment choices? Can these two investments double your money? Let us explore the features and use cases of BTC and ETH in this article.
Cryptocurrencies That Could Double Your Money
1. Bitcoin (BTC)
Bitcoin, the flagship cryptocurrency, has beaten all odds to become the largest and the most popular virtual asset out there.
It is difficult to imagine a world without Bitcoin as it has become a household name. BTC is decentralized digital cash that eliminates the necessity for intermediaries like banks and governments. It does so by using a peer-to-peer (P2P) network to confirm transactions directly between users.
Launched back in 2009, Bitcoin is the first cryptocurrency. Fiat money (like the USD or the Euro) is backed and regulated by the government that issues it. On the other hand, Bitcoin is powered through a combination of P2P technology and software-driven cryptography. The latter refers to the science of passing information, which only the sender and the receiver can read. As a result, this creates a currency backed by code rather than items of physical value, like gold, or by trust in governing authorities.
Bitcoin: What Experts Have to Say
Many investors have turned to Bitcoin because its correlation with returns in the stock market remains low. Jodie Gunzberg, the chief institutional investment strategist at Morgan Stanley Wealth Management says that "Bitcoin may provide diversification to a portfolio as it has had nearly zero three-year correlations with other assets, which is important given the rising and positive correlations that many asset classes have shown with mega-cap tech stocks."
She added that "a small allocation to Bitcoin in a traditional portfolio may improve returns and risk-adjusted returns without significantly increasing volatility or maximum drawdowns."
Bitcoin Price Action
A Bitcoin investment made now certainly has the potential to double itself in the future. In the bull year 2017, the price of BTC started at $1,000 and went up to nearly $20,000. If it follows a similar pattern in 2021, the price will reach above $300,000. In 2021, the price already surged from $29,393 on January 2 to $61,183 on March 14.
Another reason why BTC could double in price is its limited supply. The idea of scarcity may sound insignificant, but it is critical to the asset's long-term value. According to general economic theory, supply and price are inversely related. So if supply rises to infinity, the price should fall to zero. As Bitcoin's supply is limited, the price will surge as demand increases.
If Bitcoin's massive price rallies were to repeat, then the digital currency is highly likely to surge more than 2x from its current price.
2. Ethereum (ETH)
Rivalling Bitcoin, Ethereum (ETH) is another cryptocurrency that has the possibility of doubling your money.
Many experts consider the Ethereum blockchain to be the next step in the evolution of the internet. With its rising popularity as the world’s most actively used blockchain, demand for Ether, Ethereum’s native coin, continues to grow. As a result, Ethereum has been making waves in the crypto world, challenging Bitcoin as one of the most popular digital assets. ETH also experienced significant growth over the last year, with its price rising by more than 1,000%.
Fundamentals of Ethereum
Ethereum is an open-source distributed blockchain network that streamlines smart contract scripting. The platform allows developers to build decentralized applications (dApps) that function on blockchains. As a result, the platform has introduced a variety of new functionalities and applications. Ethereum is similar to Bitcoin in many ways but has various vital differences as well. For instance, Ethereum employs proof of stake (PoS) consensus mechanisms instead of the proof of work (PoW) model that Bitcoin uses.
One of the criticisms of Ether is that it is energy-intensive. Crypto tokens are mined through a series of complex computer processes. The mining process requires a significant amount of energy, and many have raised concerns over the network's impact on the environment.
However, Ethereum is working to make the technology more energy efficient. Ethereum 2.0 is an updated version of the blockchain set to roll out in 2022, and it claims to use 99.95% less energy than the current technology. Once Ethereum becomes more energy-efficient, it could gain a competitive advantage in the crypto industry and a leg up against Bitcoin.
Read Also: What's the Future of Ethereum?
Use Cases of Ethereum
For any crypto asset to survive, it needs to have some real-world utility. At the moment, Bitcoin is the most popular and most widely accepted cryptocurrency. However, the community uses the Ethereum blockchain for various purposes, which gives it an advantage.
- Ethereum is the foundation for other applications like non-fungible tokens (NFTs), which could change the way digital items are bought and sold.
- The Ethereum network also powers decentralized finance (DeFi), which aims to revolutionize the banking industry.
One of the reasons why ETH could double your investment money is the network’s unique technical offerings. The upcoming Ethereum 2.0 would integrate PoS mechanism and sharding to boost scalability. The increased speed and scalability could give Ethereum even greater utility and more of an advantage.
Ethereum's versatility and programmability allow us to use a wide variety of DeFi apps, mint, and trade NFTs along with other dapps, giving it a notable advantage over Bitcoin. Additionally, when it comes to developers, Ethereum has the richest talent pool. For this and many more reasons, buying ETH now has a high chance of doubling your money in the future.
Check Out: Will Ethereum Make Me Rich In Ten Years?
Should You Invest $1000 in Bitcoin and Ether Right Now?
As the past few weeks have proven, cryptocurrencies are still highly volatile investments. So while both Bitcoin and Ether are good investment choices, it is wise for investors to calculate their risk appetite before investing $1000 in Bitcoin or Ether.
Cryptocurrencies are highly speculative investments. Bitcoin and Ethereum have the potential for extraordinary gains, but they are also risky. Before you invest in BTC or ETH, make sure you have done your research and know what you are getting into. That said, Bitcoin and Ether are 2 cryptocurrencies that could double your money in the long run.
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Virtual currencies are highly volatile. Your capital is at risk.