Cryptocurrencies have experienced a major downturn this year as changing macroeconomic conditions, war drums, and the collapse of Terra’s UST stablecoin have undermined investors’ confidence in digital assets.
However, this is not the first time that cryptocurrencies are on a downtrend as the market has proven to be cyclical as adoption continues to rise and investors keep embracing these instruments as financial assets to be incorporated into traditional investment portfolios.
If you are looking to get exposure to the crypto market at a moment when things seem a bit chaotic, the following article summarizes the 3 cryptocurrencies to buy for low-risk crypto profits.
These digital assets offer the most upside potential compared to the risk assumed by the investor when holding them.
Cryptocurrencies To Buy For Low-Risk
1. Ethereum (ETH)
The popular smart contracts network built by Vitalik Buterin has managed to attract thousands of developers due to its easy-going coding language and the resilience of the blockchain to withstand 51% attacks due to its fragmented ownership structure.
According to State of the dApps, a website that tracks the number of applications developed using different blockchains, developers have thus far created over 2,962 apps using the Ethereum Virtual Machine (EVM).
For reference, only 62 dApps were active in May 2017, meaning that the number of programs that are now powered by this blockchain has grown at a compounded annual growth rate of 117% in the past 5 years.
For the uninitiated, Ethereum allows for peer-to-peer transactions and serves as a framework for developing smart contracts and distributed applications. In fact, it is an industry leader in smart contracts. As such, it is the blockchain network of choice for the best NFTs, crypto-based games, and decentralized finance apps.
The development of the DeFi space and NFTs are good examples of crypto sub-sectors that have excelled due to the Ethereum network. Notably, the platform is now transitioning from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism. This is called Ethereum Merge and is expected to usher in a new era within the Ethereum ecosystem.
Not only will the Merge reduce the energy consumption required through the proof-of-work consensus, but it will also significantly increase the functionality of the network. In turn, this will decrease the factors causing network issues amongst the platform users.
Along with falling transaction fees, another major selling point is Ethereum’s flexibility, which allows it to adapt to changing demands as they arise. That is how a network can stay relevant and useful for decades, and Ethereum looks set to do just that with its upcoming upgrade to PoS.
The upgrade is likely to elevate the price of ETH, which is currently trading at $1587. This is why experts believe that it is one of the 3 cryptocurrencies to buy for low-risk crypto profits.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
2. Avalanche (AVAX)
If you are interested in the fastest smart contracts platform in the blockchain industry, then look no further than Avalanche. In addition to Cardano and Solana, Avalanche is considered one of Ethereum’s main rivals.
In order to facilitate 6,500 transactions per second, the protocol uses three separate blockchains, its exchange chain (X-Chain), contract chain (C-Chain), and platform chain (P-Chain), with each one having its own specific role to play in the Avalanche ecosystem. And as you might have guessed, AVAX attempts to solve the blockchain trilemma (fast, secure, scalable). Users might also be interested in the “Core” non-custodial browser extension, which enables users to interact with Web3 powered by Avalanche.
Fast, low-cost, eco-friendly, and with NFTs gaining traction on its marketplace Joepegs, AVAX has significant potential as a smart contracts platform for decentralized applications, earning it a spot on our list of best cryptocurrencies in which to invest.
Avalanche would be a stellar investment considering the surge in dApp projects which ticks developers’ criteria of a low-cost, scalable blockchain. Given the crypto community's confidence in AVAX, experts believe it to be one of the 3 cryptocurrencies to buy for low-risk crypto profits.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
3. Solana (SOL)
When Ethereum was launched, it seemed like it would be the only noteworthy cryptocurrency project in the DeFi space, but that story has changed considerably. Solana is a high-speed layer-1 blockchain considered a direct rival to Ethereum. Why? Because it contains all the essential features of a DeFi coin, it can quickly process transactions.
Solana was developed by Anatoly Yakovenko in 2017. This blockchain was designed to have a faster transaction speed than most popular names in cryptocurrency. However, its transaction speed is not the only area it excels. It also charges a relatively low fee for its transactions.
The blockchain is run on a proof-of-stake mechanism to ensure that transactions are processed relatively quickly. It combines this consensus with the innovative proof-of-history system. Early reports have indicated that it can process up to 70,000 transactions per second. Solana is a big name in the DeFi sector, and it can use smart contracts to support decentralized applications.
It is also great for hosting DeFi platforms, such as dedicated NFT marketplaces. SOL is the native token of the Solana platform and is used to settle transaction fees. It also serves as a great store of value and is widely accepted as a means of payment.
Solana (SOL) exists to facilitate decentralized app (dApp) creation and improve scalability by introducing a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain. The platform's innovative hybrid consensus mechanism is a major source of attraction for small-time traders and institutional traders alike.
Solana's growth, unique architecture, and impressive price history make it one of the 3 cryptocurrencies to buy for low-risk crypto profits. It has a market cap of $11 billion at the time of writing, way undervalued compared to its peers.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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