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The best cryptocurrencies to invest with in 2023

January 4, 2023

The crypto industry has risen to dizzying heights over the past couple of years. However, it has also experienced some black swan events that have spooked investors and caused the market to plunge into bearish moments. As such, it is important for investors to consider the safest cryptocurrencies to invest in while keeping in mind that some digital coins are more susceptible to manipulation and market drawdowns than others.

This article covers cryptocurrencies with the highest upside potential as well as some of their drawbacks.

The main types of cryptocurrencies

There are three major types of cryptocurrencies, namely Bitcoin, altcoins, and stablecoins.

Bitcoin

Bitcoin was the first cryptocurrency to be developed. It was created in 2009 by the pseudonymous Satoshi Nakamoto and is considered to be one of the last remaining truly decentralized cryptocurrencies. As such, it is favored by both retail and institutional investors, especially those who wish to avoid the pitfalls of centralized tokens.

Altcoins

Altcoins can be summed up as all cryptocurrencies besides Bitcoin. The term is shorthand for ‘alternative coins’ to Bitcoin. Altcoins use a wide range of minting mechanisms that range from proof of work consensus systems to proof of time and space algorithms.

Stablecoins

Stablecoins are cryptocurrencies whose market value is pegged to different asset classes. They are designed to be more stable compared to conventional cryptocurrencies, whose value is dictated by market forces. Some of the most popular stablecoins on the market today include Tether (USDT), USD Coin (USDC), Binance USD (BUSD), and Dai (DAI).

The top 10 cryptocurrencies to invest in

The following is an outline of the top 10 cryptocurrencies to invest in along with their strengths, weaknesses, and performance rating. 

Bitcoin (BTC)

Bitcoin is the oldest cryptocurrency in the world and has attracted a significant number of investors over the years. Consequently, its market cap accounts for about 40% of the overall crypto market cap. One major factor that has contributed to its growth is its decentralized nature which appeals to a core group of investors who value this principle. 

Increased demand for Bitcoin has allowed it to surpass stock market indices such as the S&P 500 and the Dow Jones Industrial Average. The cryptocurrency has produced returns of at least 500% over the past five years. 

Bitcoin is already set to rise again in the next couple of years due to rising demand and its inbuilt halving deflationary mechanism. Its halving event causes mining rewards to be halved, effectively reducing the rate at which coins are minted. This causes scarcity and creates greater demand for coins that are already in circulation, subsequently pushing up prices.

  • Ease of accessibility: 9

  • Privacy: 6

  • Ease of use: 8

Ethereum (ETH)

Ethereum trails Bitcoin when it comes to market value. The coin runs on the Ethereum programmable chain, which not only supports peer-to-peer transactions but also allows developers to implement smart contracts and embed decentralized applications. Today it is the network of choice for thousands of NFT, GameFi, and token finance projects.

Ethereum was founded in 2013 by a group of developers that included Vitalik Buterin, a Russian-Canadian programmer, and Gavin Wood, an English computer scientist. 

Its increased utility instils confidence in investors. The added benefit of earning staking rewards allows users to earn passive income. This makes it a viable choice for long-term investment.

  • Ease of accessibility: 8

  • Privacy: 7

  • Ease of use: 8

Tether (USDT)

Tether (USDT) is the most popular stablecoin in the crypto industry by market capitalization. Its value is pegged to that of the US dollar and is backed by actual currency reserves as collateral. The coin was created by Tether Limited Inc in 2014, a subsidiary of Hong Kong based iFinex Inc.

The stablecoin is designed to help investors avoid volatility and use the cryptocurrency as a medium of exchange rather than for speculative purposes. USDT makes it easy for investors to buy different assets directly using the coin instead of having to convert their money into fiat to purchase other cryptocurrencies.

  • Ease of accessibility: 8

  • Privacy: 6

  • Ease of use: 7

XRP

XRP is one of the world’s most recognizable digital currencies, and its popularity is only comparable to that of prime cryptocurrencies such as Bitcoin and Ethereum.

Its prominence is mainly due to the fact that it is one of the oldest cryptocurrencies in the world. The coin was developed in 2012 by Ripple founders Jed McCaleb, David Schwartz,and Arthur Britto.

Recognition is vital to the success of the coin. This is because newbie investors bet on popular established coins, especially in times of significant market uptrends. As such, XRP is likely to experience a huge price explosion in the next major crypto bull run.

  • Ease of accessibility: 8

  • Privacy: 7

  • Ease of use: 8

Monero (XMR)

Monero was created by a team of seven blockchain developers in 2014 that included Nicolas van Saberhagen.

The coin provides its users with a high level of anonymity by default and leverages advanced privacy technologies to hide transactions and addresses of trading parties.

While Monero attracts a core group of investors who value privacy, this property has put it at loggerheads with a section of lawmakers and caused it to be banned in some countries, such as Australia.

This has caused a bit of uncertainty among investors and is one of the main reasons why it has performed abysmally, compared to other major cryptocurrencies. That said, Monero is preferred by some traders due to its well-defined resistance levels which have remained unchanged for many years.

  • Ease of accessibility: 6

  • Privacy: 10

  • Ease of use: 7

Cardano (ADA)

Cardano was created in 2015 by Ethereum co-founder Charles Hoskinson to solve the blockchain trilemma of scalability, decentralization, and security that affected the first generation of blockchain networks. As such, Cardano transactions are fast and cheap, thereby making it ideal for regular cryptocurrency payments.

That said, the increased use of the protocol by developers is set to increase demand for its native ADA token, thereby leading to a price increase. 

  • Ease of accessibility: 7

  • Privacy: 6

  • Ease of use: 8

Polygon (MATIC)

Polygon is an Ethereum layer-two blockchain network, and MATIC is its native cryptocurrency token. The coin and its network were created in 2017 by software engineers Sandeep Nailwa, Jaynti Kanani, Mihailo Bjelic, and.Anurag Arjun. 

The MATIC cryptocurrency is currently at number ten on the list of digital coins with the largest market cap. Looking at its history, MATIC has significant growth potential and reacts sharply to market upswings. For perspective, it climbed from circa $0.015 levels in December 2020 and peaked at about $2.87 a year later. The jump yielded a value increase of over 15,000% within one year. 

The climb signalled significant interest among investors.

  • Ease of accessibility: 7

  • Privacy: 6

  • Ease of use: 7

Binance (BNB) Coin

Binance is arguably the most popular crypto exchange in the world, going by the number of weekly visitors and trade volume, and Binance Coin (BNB) is the digital token that powers the BNB Chain ecosystem. Binance Coin was created in 2017.

Binance’s backing makes the coin safe for investment. The coin’s value is expected to climb in subsequent years due to increased demand and its deflationary mechanism dubbed BNB Auto-Burn, which will eventually reduce the coin’s supply by 50%. 

The coin was developed under the stewardship of Binance CEO Changpeng Zhao.

  • Ease of accessibility: 8

  • Privacy: 5

  • Ease of use: 8

Binance USD (BUSD)

Binance USD (BUSD) is a stablecoin that was developed by Binance in 2019 in conjunction with Paxos. Like Tether, the coin helps investors to buy various cryptocurrencies without having to convert their money into fiat. The BUSD digital currency is pegged to the US dollar.

  • Ease of accessibility: 9

  • Privacy: 5

  • Ease of use: 8

Polkadot (DOT)

The Polkadot protocol enhances interoperability between blockchain systems. The network has drawn interest from investors because of its interactive attributes. Its sharding capabilities, which enhance scaling, have attracted developers, and this has, in turn, increased the usage of its DOT token. This is a good indicator of future growth.

The DOT token was created in 2020.

  • Ease of accessibility: 7

  • Privacy:7

  • Ease of use: 9

Conclusion

Every cryptocurrency has unique benefits and drawbacks. As such, it is important for investors to conduct extensive background research on their preferred coins before investing.