The macroeconomic environment is driving investors away from risky assets. Consequently, the market for crypto-currencies have fallen 58% since their peak in November, wiping out $1.7 trillion in value. But this kind of sellout has happened before, and the market has always recovered. There is no reason to believe that this crypto crash will be any different.
Additionally, blockchain technology has the potential to disrupt the financial system, making payments and savings products more efficient. With this in mind, Ethereum (ETH -2.63%) and Solana (SOL -2.38%) seem like smart long-term investments.
1.Ethereum
Decentralized finance (DeFi) has the potential to reshape the world. DeFi products allow people to invest, borrow, and earn interest on money without the help of traditional financial institutions like banks. See also: Top 8 Best Cryptocurrencies to Invest in February 2022 – Reviews and Technical Analysis. Eliminating these intermediaries makes the financial system more efficient, and Ethereum is at the heart of the DeFi movement.
Specifically, Ethereum was the first blockchain designed to support self-executing computer programs called smart contracts. This technology is the basis of the expansive DeFi sector, and Ethereum has taken advantage of its pioneering status to gain a strong competitive position. With $72 billion invested in DeFi products on the blockchain, Ethereum accounts for 64% of all DeFi investments on all blockchains.
Ethereum also benefits from a strong network effect which should keep it at the forefront of the industry. Every software developer in the Ethereum ecosystem creates added value for every user and vice versa. This momentum should continue to drive innovation on Ethereum. As this trend continues, demand is expected to increase for the underlying cryptocurrency – the ETH coin – which will push its price up.
Additionally, research from Fidelity suggests that institutional asset managers are increasingly bullish on cryptocurrencies. That’s no small thing, as they control over $100 trillion in assets, and a small percentage of that total could send the entire crypto market to the moon. Even better, Ethereum is the second most popular digital asset among institutional investors, and as adoption continues to increase, the price of ETH could soar. This is why this cryptocurrency is a smart long-term investment.
2. Solana
The Solana blockchain aims to be a better version of Ethereum. His innovation main one is a hybrid consensus mechanism that combines Proof of Stake (PoS) and Proof of History (PoH). The PoS protocol ensures the honesty of validators by requiring that they have a stake in the network; the PoH protocol timestamps transactions as they occur to create a verifiable order of events, dramatically speeding up throughput.
The Solana blockchain can theoretically process 50,000 transactions per second (TPS). As an example, Ethereum currently processes around 14 TPS, although a scaling solution planned for 2023 promises to increase this figure to 100,000 TPS. Read also: Zooming in on an underrated crypto: What is NEAR Protocol crypto, and should you buy it right now?. Either way, thanks to its highly scalable blockchain, Solana transactions cost just a fraction of a penny, making it popular with DeFi developers and investors.
Solana features over 1,500 blockchain projects, including Magic Eden, the second most popular NFT marketplace in the past 30 days, according to DappRadar. Solana also ranks as the fourth most popular DeFi ecosystem, with over $4 billion invested on the platform. Although this figure has dropped considerably during the current crypto crash, the total value invested on the Solana network is still three times higher than a year ago.
Even more exciting, Solana Pay went live earlier this year, bringing fast and cheap blockchain-powered payments to merchants. Solana Pay allows consumers to transact directly with merchants, eliminating banks, card networks and other middlemen. Even better, consumers can make payments with stablecoins like USD Coin, which means they don’t have to spend volatile crypto-assets. This technology could reshape the business world.
Solana’s pitch is simple: It’s a thriving ecosystem of decentralized software and DeFi services that supports fast and cheap transactions. As blockchain products are adopted, the demand for the underlying cryptocurrency – the SOL coin – is expected to increase, driving up its price. This is why this cryptocurrency is a buy for long-term investors.
💎 Open an account for free to Invest in crypto!
CoinHouse allows you to easily invest in crypto-assets. Creating an account is free and takes just a few simple steps.
📈 Trade cryptos online in just a few clicks!
eToro allows you to trade cryptocurrency easily online. Creating an account is free and very simple.
68% of retail investor accounts lose money when trading CFDs with this provider. You should ask yourself if you can afford to take the high risk of losing your money. eToro users in France cannot open positions to buy real crypto assets, all orders are opened as CFDs.
Passionate about crypto-currency and DeFI, Thomas relays international news on this subject!