When it comes to choosing cryptos for your portfolio, it is pretty hard to know which specific cryptos you want to hold or trade. There are more than 8,000 cryptocurrencies in existence on December 2021. So choosing only five out of them will be complicated, challenging, and sometimes confusing.
Decide Your Needs
In this part, you need to choose whether you want to hold your cryptos for a long or you want a short-term benefit by doing day-trading. Identifying the goals is very important for both strategies. To determine your goals, first of all, you need to set the price limits correctly, meaning how much you want to gain, the time period, how long you are able to wait, and finally, how much you are able to lose. Every step is equally important in the trading environment, both for crypto and for other investments.
Bitcoin remains in its position being the largest cryptocurrency in the market, having roughly 600 billion U.S. dollars of market capitalization by June 2021. Being the one who went from $0.09 all the way to $68,000 (November 10) earns its place on being one of the currencies to hold for a long.
On the other hand, Bitcoin is also eligible for failing and crushing down, yet chances are very low, but still, risks are there.
It is possible to observe some of the significant crashes behind the most prominent coin. In Dec 2017 was a prosperous period Bitcoin when the all-time high updated up to $20,000, yet in Dec 2018, it crashed down below $12,000. Almost the same thing happened in April 2021 when Elon Musk declined to accept Bitcoin for his well-known Tesla purchase. Also, China has declared another ban on cryptocurrency. All these factors affected the major currency to fall and get back.
Ethereum is the next on our list. Like Bitcoin, Ethereum is also viable. It proved its reliability in different manners, yet there is a big need to understand the difference between Bitcoin and Ethereum.
First of all, Ethereum is faster. Yes, transactions are much faster than Bitcoin does. So although Bitcoin was created to be an alternative for fiat and any other transactions, Ethereum proves itself to be a good rival in the field of speed.
Ethereum fosters the NFT market. Being the main fuel for the NFT marketplace, Ethereum triggers its reliability.
Finally, Ethereum 2.0 is coming. The current protocol works with a proof-of-work system, yet the new one works with a proof-of-stake system, meaning that the energy spending will go down and Ethereum network speed will ultimately increase.
The current price of ETH is $4,095, Ethereums all-time high is $4,837.
Solana was first introduced in April of 2019, and it began trading for less than $1 per coin, so it is quite new to the market. Solana proved its market stability when having only 0.01% of the market share became 2.6% in early December of this year.
Compared to the previous two, Solanas transaction speeds are much higher due to the network protocol of (PoS) Proof of Stake. The same network will be used for Ethereum 2.0, but Solana still offers lower transaction fees and commissions so far.
The current price of Solana is $190 (December 24), the record high of Solana was ~$260 on November 6.
Cardano is a blockchain platform that is open to the public. It’s decentralized and transparent, with agreement obtained by (PoS) proof-of-stake. Its own coin, ADA, can be used to allow P2P transactions. Charles Hoskinson, a co-founder of Ethereum, established Cardano in 2015.
Again due to (PoS) protocol, Cardano provides fast transactions with fewer energy resources and environmental impact. The price of ADA in 2017 was $0.02. Its current price is $1.57 as of November 30, 2021. This is a 7,850% rise.
There are lots of predictions regarding ADA price in the future and most of them render a bullish outcome for Cardano in the long run.
There are several blockchains and cryptocurrencies that may use several blockchains for transactions. Polkadot aims to bring together all these blockchains, so they all work together. This project may have a revolutionary impact in the world of transactions, yet consequences are unknown; Polkadot owners believe that it is only beneficial for all blockchain technology users.
On May 26, 2020, the Polkadot network’s Genesis block was launched with a protocol of (PoA) Proof of Authority network. Its price increased by roughly 1,300% between September 2020 and November 30, 2021, from $2.93 to $38.61.
Based on our Polkadot price prediction, a long-term increase is expected; the price prognosis for 2026 is $400.232. With a 5-year investment, the revenue is expected to be around +865.86%. -Wallet Investor
So Polkadot is eligible to get the place in our portfolio and earns its way to long-term holding.