What Are The Best Cryptocurrencies To Invest In During 2023?

Last Updated January 5th 2023

9 Min Read

The best is relative, and quite frankly in a market of over 6000 cryptos, everyone has a personal best. That said, there is a methodology that one can follow and minimize any chances of being wrong. One of the best ways to determine the best cryptocurrencies to buy is to use the criteria below.

Look at the direction that the broader market is going.
Look at where the money is flowing
Research on where the hype cycle could go next

The above three steps can significantly increase the odds of success when buying cryptocurrencies for 2023.

The Broader Market Direction

The crypto market is highly volatile, and it is essential to understand where the market is at any given moment.

At the height of bull markets, it is always best to pivot towards Bitcoin. That’s because, in the corrections that follow, most altcoins lose by over 70%. This has been the case in all previous bull runs, including the one that ended in April 2021.

In the depths of the bear market, Bitcoin and large-cap altcoins are the best to buy. That’s because they have a lower risk of stagnation since they already have strong fundamentals driving them.

Large-cap altcoins offer the most promise in times of market recovery since they have a mix of growth and stability.

Just before the bull market peaks, low cap altcoins, especially new ones, tend to outperform the market. They benefit immensely from FOMO, and their low market caps give them the room to gain by thousands of percentages in a very short time.

At the moment, the broader crypto market is in recovery. Bitcoin is yet to retest its all-time highs, but it is already out of the woods. The same applies to most of the major altcoins, some of which have gone on to make new highs.

If the market continues in its current trajectory, then the best cryptos to invest in during 2023 are the large-cap cryptos.

The Direction Money Is Flowing

From a look at the price action of the broader market, it is easy to tell the direction money is flowing. Broadly, there are three types of cryptos, namely: Payment cryptos, platform blockchains, and DeFi cryptos.

The cryptos that show the most strength in the recovery phase will likely outperform the market once the Bull Run hits full gear.

In early 2020, DeFi projects were starting to gain traction faster than most other cryptos. Most of them ended up outperforming the market by a considerable margin when the crypto market peaked in April 2021.

At the moment, platform blockchains are outperforming the broader market by a considerable margin. A few of the large ones have hit new highs, yet the more overall market is yet to recover fully.

This means money is flowing into these cryptos. As such, they can outperform the market if the next Bull Run peaks in 2023.

Where The Hype Cycle Could Go Next

It is during hype cycles that extraordinary wealth is made in crypto. In the 2017 bull rally, all the hype was on ICOs, and people made a lot of money from investing in relatively small projects that were pretty much just whitepapers.

In the 2020/21 Bull Run, all the hype was on meme coins. A couple of them, most notably Dogecoin, and Shiba Inu, rallied by thousands of percentages.

The way things are shaping up, space-related cryptos are likely to benefit the most in the next hype cycle.

This is evident in all the excitement that is there about space and cryptocurrencies. About three crypto projects have confirmed their intentions to blast off into space between December this year and Q1 of 2023.

Since the whole connection between space and cryptocurrencies is being driven by some of the biggest players in the space industry, cryptos that have space missions coming up could be huge in 2023. Once the media hype kicks in, they could easily gain by thousands of percentages.

Best Cryptocurrencies To Invest In 2023

It is clear that the best cryptos to buy in 2023 are the large-cap platform blockchains. There are a couple of them that have a lot of good news coming up at the moment.

Some of those with the most potential are:

Ethereum
Solana
Cardano
Binance Coin
Dogecoin

1. Ethereum

Ethereum is the second-largest cryptocurrency by market capitalization and also the largest platform blockchain in the market. Ethereum is currently in the middle of a transition to Ethereum 2.0, and the implications will be huge.

For starters, the upgrade aims to get rid of the capacity issues that currently plague Ethereum. As such, once the transition is complete, this blockchain will become more attractive to new projects, especially those related to the fast-growing DeFi market.

The upgrade also aims to make Ethereum more environmentally friendly. Considering that the number of environmentally conscious investors is rising globally, this makes Ethereum highly attractive crypto.

It will now be very attractive to institutional investors, who may have been holding back due to the environmental concerns of their core stakeholders.

The ongoing upgrades are also aimed at lowering Ethereum transaction costs and making them more predictable. This will serve to make Ethereum more attractive to developers, further driving up its demand.

All these technical improvements make Ethereum a top platform blockchain to watch now that there is a lot of spotlight on this market segment.

Besides improving technical capabilities, the infrastructure necessary for institutional investors to get involved in Ethereum is already fully developed. From futures to physically settled ETFs, Ethereum has it all in most major jurisdictions. The US is one of the few markets lagging on this front, but big players have lately been filing for Ethereum ETFs and other products in this market.

A combination of strong technical capabilities and growing interest by institutional money means that Ethereum could blow up in 2023.

The best part is that Ethereum is yet to retest its all-time highs, though it’s close to it. If it blows through the $4300 mark by the end of 2021 and the broader market remains bullish, even $10k per ETH could be possible in 2023.

Ethereum is a cryptocurrency that offers a mix of growth prospects and security going into 2023.

Don't Miss: 5 Best Ways To Buy Ethereum (ETH)

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

2. Solana

Solana is another platform blockchain that holds a lot of potential for exponential growth going into 2023. It is already making new highs and recently peaked at $200.

Solana is unrivaled in the platform blockchain space in terms of scalability and costs. This blockchain can handle up to 50,000 transactions per second, and its transaction costs are as low as $0.001 per transaction.

With these metrics, Solana is not just the blockchain king of scalability; it also outcompetes centralized financial systems like those used by Visa and MasterCard. Essentially, this means its potential for adoption is pretty high going forward.

It is also noteworthy that even while achieving such high speeds, Solana can remain decentralized. Some projects have claimed to give high TPS in the past, but on closer scrutiny, it becomes evident that they do it at the expense of decentralization.

Solana is able to scale and still remain decentralized because of the innovation behind its scaling capabilities. In most Proof-of-Stake and Proof-of-Work blockchains networks, validators, or miners in the case of PoW blockchains need to communicate with each other for transactions to be completed.

With Solana, transactions are instead cryptographically time-stamped on the blockchain. This makes the whole system efficient and able to handle thousands of transactions per second easily.

Besides its technical superiority, Solana’s adoption will boost the visibility it has gained from its recent rally. Prior to July this year, not a lot of people knew about Solana.

This is no longer the case. As the 6th largest cryptocurrency, and its price rocketing over 40x, it is now pretty famous. As such, some developers may have gone with another platform but will now choose Solana. Similarly, some investors didn’t know about Solana before but now know about it.

Going into 2023, this is likely to drive up the value of Solana by a huge margin. While there is no way to predict an actual price target, there is a good chance that Solana could test $1000 in the course of 2023.

If the much-rumored token burn becomes a thing by 2023, then it would not be inconceivable for Solana to trade at Ethereum level prices next year.

Check Out: Could Solana Be a Millionaire Maker Coin?

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

3. Cardano

Cardano is another top platform blockchain that holds a lot of potential going into 2023. This project has come a long way since 2017 and is now the 3rd largest cryptocurrency by market capitalization.

The latest frenzy around Cardano has a lot to do with the just-concluded introduction of smart contracts. The expectation is that, with the introduction of smart contracts, Cardano will now be in a position to compete effectively on everything from DeFi to NFTs.

The good news is that it can compete and gain a sizeable share of the market. That’s because it has all tools needed. These are the ability to scale, security, and affordability of transactions.

In terms of scalability, Cardano can handle up to 200 transactions per second on-chain. It also has a layer-2 solution called Hydra that can help it handle hundreds of thousands of transactions per second.

In terms of security, Cardano is one of the most secure blockchains in the market today. Its Ouroborus Proof-of-Stake algorithm has been peer-reviewed and proven to be secure. Besides, as more people buy and stake Cardano, it will become even more decentralized.

These metrics mean that Cardano has good prospects, especially now that there is a lot of spotlight on platform blockchains. While no one can predict the future accurately, $10 or more per ADA could be achieved in 2023.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

4. Binance Coin

Binance coin is the power that drives the Binance ecosystem. Due to the fast growth of the Binance Smart Chain, Binance makes it to the list of platform blockchains that could rally in 2023.

The level of activity on the Binance smart chain has grown exponentially over the past year and now rivals Ethereum. As it continues to grow in adoption, so will the value of BNB going into the future.

Then there is the fact that Binance Coin is heavily deflationary. Every quarter, Binance burns BNB worth billions of dollars. While they have not indicated how much BNB they will be burning quarterly going forward, the exchange has been clear that they will be accelerating the burn.

A combination of decreasing supply and rising demand is always a trigger for a price rally in any market. On this basis, BNB can easily trade at over $2000 a coin going into 2023.

Check Out: Will Binance Coin Make Me Rich in 10 Years

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

5. Dogecoin

Besides platform blockchains, cryptos with a space link could form a big part of the next hype cycle.

Dogecoin stands out amongst the projects that have some space-related news coming up in 2023. That’s because Dogecoin’s space event is backed by some of the most prominent players in the space industry, namely SpaceX and Geometric Energy Corporation.

The event is named Doge-1 and aims to test the applicability of cryptocurrencies in intra-planetary commerce. According to Elon Musk, it is fully funded in Dogecoin and will put Dogecoin on the moon (in the literal sense of it).

This event will have a huge impact on Dogecoin primarily due to the media attention that it will generate. If it goes as planned, then Dogecoin could easily rally by thousands of percentages in 2023.

The upcoming event is so big that Dogecoin is easily the most undervalued cryptocurrency today at current prices.

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