Investing in a Pandemic: Top Cryptos for Investment in COVID Times
COVID-19 hit the financial world, and the world at large, very hard. Stocks across the board plunged, millions lost their jobs and the future of many businesses and industries is uncertain. Beyond this, it also shook the faith of many investors and as the world attempts to return to normal, it uncertain where they should put their money now.
Investing in a pandemic has become confusing. The COVID-19 crisis has got investors looking at other alternatives. People who invest in altcoins are wondering what the best cryptocurrencies to invest in the COVID- 19 situation are.
Do they put their faith and funds in well-established tokens? Do they give less-known tokens a try? Should they pull out of the market altogether? Well, in this guide, we will be outlining all the best cryptocurrencies to invest it during these uncertain times.
What’s the big deal about cryptocurrencies?
A digital currency bought and sold through cryptocurrency exchanges is identified as a cryptocurrency.
Bitcoin is arguably the most popular cryptocurrency in the world. Satoshi Nakamoto — the anonymous founder of the coin — introduced it in 2009 by writing a white paper, Bitcoin: A Peer-to-Peer Electronic Cash System. The year followed with a shockwave of financial crises moving around the world. Bitcoin introduced the world to blockchain technology that allows the online transfer of digital payment between two or more parties without financial institutions or banks.
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This very decentralized nature if one of the things that endear cryptocurrency to the masses. The dominant model of centralization has proven to be somewhat problematic, particularly for user data. All that sensitive data in one place has threatened the privacy of millions. On top of this, hackers have been known to use credit card information to steal millions of dollars. This has entirely changed with cryptocurrencies.
Then there is the issue of transaction speed. Traditional bank transfers or credit card payments can take 3 to 5 days to complete and remittances often involve multiple intermediaries. Blockchain technology combats this by allowing peer-to-peer electronic transactions in seconds to minutes. All of this happens without the interference of any central authority.
The verification of the transactions then takes place on the blockchain itself using a cryptocgraphic function. Not only are the transactions secure but are put in a public ledger that cannot be changed.
Altcoins are becoming a popular mode of payment in their own right because of their underlying technology. This is because they have the potential to scale up to millions of transactions per second, eliminating high transaction costs in the process.
How did COVID-19 affect top cryptocurrencies?
The COVID-19 outbreak had an effect not only on traditional financial markets but on the cryptocurrency industry as well. The crypto market observed a drastic decline with investors and traders rushing to liquidate their digital assets. Not many people saw themselves investing in a pandemic. The financial shockwave of coronavirus spread around the globe affecting even the popular cryptocurrencies.
Here’s how the turmoil affected the top cryptocurrencies.
Bitcoin, which was traded over $10,000 in mid-February 2020, saw an abrupt fall to $3,600 on March 12. But it climbed up to $5,177 on March 18, 2020, recording around 50% decline in value.
Ethereum, the second most prominent cryptocurrency concerning market capitalization, was also affected by the COVID -19 outbreak. Ethereum’s price was marked at $252 on February 17, 2020. After a month, the value fell to $112. As on March 17, the popular altcoin observed over 50% decline in value.
Ripple is one of the most valuable digital assets in the crypto space. The price of XRP stood at $0.303117 and later dropped to $0.144512 on March 14, 2020. Ripple recorded over 50% decrease in its value.
The market turmoil significantly affected this leading cryptocurrency that investors typically consider for profit. It experienced an almost 50% decline in value by disrupted financial services, trade, e-commerce, and other factors.
Best cryptocurrencies to Invest in the COVID-19 crisis
Fear no! Even though COVID-19 has done a number on the value of many major cryptocurrencies, all hope is not lost. There are still some cryptocurrencies that have great potential for return on investment. Here are five cryptocurrencies with higher liquidity rates that could be considered a good investment option in these testing conditions.
Bitcoin secures the topmost position and has the highest market cap among all cryptocurrencies. Naturally, this makes it as one of the most popular investment options in the pandemic.
The world’s most popular coin serves as a safe haven during the COVID-19 pandemic situation. In Q1 2020, Bitcoin exhibited a big swing from $10,000 to a drop around $4000. However, it has now started to show positive signs. Bitcoin is being traded at $9700, as on June 6, 2020.
Bitcoin increased its value even in an uncertain market condition. It provided diversification of portfolios and is a tested investment cryptocurrency for investors, traders, retailers, and institutional investors.
Bitcoin’s total supply will be capped at 21 million by 2140, which would continuously drive its value over time.
Bitcoin has outperformed every asset category, including gold and real estate. In short, Bitcoin is still the king of the cryptos and will likely be a good investment now and in the future.
Ethereum is the second most prominent coin that has always demonstrated a tendency for growth, and this makes it one of the best cryptos for investment in COVID-19 times.
The Ethereum Enterprise Alliance (EFA) determines the legitimacy of Ethereum. It is a global alliance of companies including Fortune 500 enterprises, industries of banking, pharma, technology, automotive, startups, research labs, and academics all around the world.
Ethereum has the potential to run smart contracts. Developers use it to build distributed applications which global organizations widely accept as payment platforms.
It remains a popular coin during the COVID-19 crisis. One of the reasons is that it’s network increasingly operates Decentralized Financial applications (DeFi) that are used by several businesses to make online transactions.
As of June 6, 2020, Ethereum constituted a market capitalization of $27 billion. It holds the second ranking in the list of top cryptos according to market capitalization.
Ethereum is a permissionless system. The Ethereum blockchain has been the platform for several initial coin offering (ICO) projects.
Ethereum will remain a global payment settlement leader to facilitate payment and settlement for institutional markets using blockchain technology.
3. Binance Coin (BNB)
Binance coin is a native coin of the Binance Exchange. Its cryptocurrency exchange platform — the Binance exchange —is considered to be one of the leading cryptocurrency exchanges that trades Binance coin, Bitcoin, and hundreds of other altcoins.
Binance (BNB) coin supports the blockchain ecosystem. People use Binance coins to pay for trade and withdrawal, and even as a listing fee on Binance Exchange. Besides this, it also offers a discount fee to traders when they pay with Binance coin.
Binance gained attention during COVID -19 as it has become the 8th largest cryptocurrency in the global cryptocurrency market with a market cap over $2.7 billion. The trend looks strong, and it could be one of the best cryptocurrencies to invest in the COVID-19 situation.
4. Ripple XRP
XRP came to the crypto space in 2012 with an aim to transform global payments. It is one of the fastest, scalable, and cheapest digital assets in the crypto space, and could be suitable investment option in the COVID-19 pandemic.
Ripple is the native digital asset on the XRP ledger. It is an open-source, permissionless blockchain that can settle transactions within 3 to 5 seconds. This popular altcoin is even capable of handling up to 1500 transactions per second.
Ripple holds the fourth rank with a market cap of $9 billion.
Ripple has been in high demand not only during the COVID-19 crisis, but the trend will continue to soar after because of its tremendous utility in financial services industries. Some experts call Ripple, the king of banking infrastructure. Some banks use Ripple to easily facilitate transactions between themselves. It uses an interledger protocol that connects and validates transactions between different blockchains in various countries.
Ripple is often seen as one of the most suitable digital assets for long term investment. There is also a large volume of XRP digital assets participating in active transactions, which also depicts a great interest of investors.
EOS are native tokens of EOSIO blockchain — the most powerful infrastructure for Decentralized Apps. Several popular companies use it when they make a move to blockchain, which determines the usability of its network.
EOSIO acts as a smart contract — like Ethereum — to facilitate deployment of industrial-scale DApps that have the potential to scale up to millions of transactions per second, eliminating massive transaction fees.
EOS tokens have a market capitalization of over $2 billion. It’s a great altcoin to consider for future investments.
Central banks in several countries are cutting their interest rates, making them next to zero. As a result of this, several savers are making a move towards “decentralized finance”. With the market making such a move, it is a great time to invest in cryptocurrencies.
If you think we missed any altcoin in our list of best cryptocurrencies to invest in the COVID-19 situation, then let us know in the comment section below.