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The cryptocurrency market has always been volatile, but 2022 has been the Wild West. Between fears of rising interest rates, high inflation and the Russian invasion of Ukraine, risk assets in general — and the crypto market in particular — have suffered heavy losses. However, for those cryptocurrencies that aren’t complete speculations — meaning those that have demonstrated utility — these sharp drops could offer good entry points for future appreciation. Here are four cryptos that could be good buys this month.
- Price as of March 1: $96.91
Solana is the ninth-largest cryptocurrency, with a current market capitalization of about $31 billion. Yet, Solana, which soared more than 11,000% in 2021, is down about 42% year-to-date in 2022, perhaps offering a long-term entry point for the crypto. Solana soared in 2021 as it attracted multiple developers who were drawn by the crypto’s relevance to the world of non-fungible tokens, or NFTs.
Solana’s transaction speed is also making waves, as it processes more than 2,500 transactions per second compared to the 30 of industry giant Ethereum. Solana can reach these speeds due to its proof-of-history consensus mechanism, which marks blocks of data with timestamps and thereby streamlines transaction verification.
As Bitwise Asset Management CIO Matt Hougan tells CNBC Make It, “Solana is the leading Ethereum competitor. I wouldn’t put all my chips on it, but I’m a big fan.” All in all, Solana offers immense potential thanks to its speed and rapid application development, but it’s still going through growing pains, which could keep its price volatile.
- Price as of March 1: $86.06
Much like Solana, one of the main strengths of Avalanche is its speed, which at 4,500 transactions per second is nearly twice as fast as its competitor. Avalanche can reach its speed thanks to its structure, which reduces network congestion. The details are complex and fit for developers, but essentially Avalanche divides chains, execution environments and deployments, allowing them each to have their own avenue.
Avalanche is compatible with Ethereum, providing it with another edge over competitors, as developers can launch apps on the platform in the language of Ethereum. With over 170 existing projects on Avalanche and more to come in the future, additional investment is likely to follow. Co-founder and CEO of cryptocurrency exchange FTX Sam Bankman-Fried is a big believer in Avalanche, telling Decrypt, “I think that there’s a world in which it gets absolutely huge.” Raj A. Kapoor, founder of the India Blockchain Alliance, concurs, saying that Avalanche has “…several projects lined up for 2022, which can boost its prospects despite any dip. Its strategic partnership with Deloitte augurs well. It is also linking with Web3 accelerators. Mix this up and these make for a good long term buy.”
- Price as of March 1: $1.62
Polygon has a market cap just over $12 billion, making it about 1.5% the size of market leader Bitcoin. If you subscribe to the belief that industry giant Ethereum is going to be a long-term winner, Polygon could be a way to leverage its success. Polygon’s goal is to increase the scalability of Ethereum by allowing theoretically limitless apps to run on the network, the idea being that the more accessible Ethereum is, the more successful it will be in the long run.
Polygon is also part of a movement dubbed “Web3” and it aims to be a decentralized version of Amazon Web Services. Moves like this have drawn the attention of big players in the space, such as Sequoia Capital India, which recently led a $450 million investment into Polygon. According to Shailesh Lakhani, managing director of Sequoia India, “Thousands of developers across a range of applications are choosing Polygon and their complete set of scaling solutions for the Ethereum ecosystem,” making it a solid investment. Down about 36% YTD in 2022, long-term believers in Polygon could have an attractive entry point.
- Price as of March 1: 86 cents
With a market cap of just $5.7 billion, Algorand is among the smallest of the big-time players in the crypto world. Believers suggest that this relatively small market cap means that big gains could be awaiting the crypto in the future, as it plays catch-up to its largest brethren. However, with high potential reward comes high risk, and Algorand has seen its value essentially cut in the first two months of 2022 alone.
Algorand was launched in June 2019 by MIT professor Silvio Micali, and it’s designed as an open-source, permissionless blockchain network. Nitish Sharma, Global CEO of TP Global FX, said, “Algorand is designed to be a payments-focused network with rapid transactions and a strong focus on achieving near-instant finality — that means processing over 1,000 transactions per second (TPS) and achieving transaction finality in less than five seconds.” As speed draws investor attention in the crypto world, Algorand is a favorite of many crypto investors, who also like its developer support and real-world use cases.
By John Csiszar