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3 Cryptocurrencies to Buy on a Drop
Following a major market correction, opportunities abound in the cryptocurrency market.
Over the past few days, the cryptocurrency market has seen a massive drop. While these corrections are not abnormal, they are the first to occur in quite some time.
The total cryptocurrency market cap is still up 40% year-to-date, so after appearing to be rising for most of the spring, this correction may have been a little more painful than usual and caught some investors off guard.
Yet it is during these corrections that opportunities are usually most numerous. This is not a major development, but rather a natural flush. Think of it as one step back followed by two steps forward.
For those looking for an opportunity to grab cryptocurrencies with long-term potential, here are three of my favorites. buy on the dip.
Image source: Getty Images.
1. Bitcoin
There’s not much to say here. Bitcoin (Bitcoin -0.04%) has been the leader of the crypto asset class for the past 15 years, and it is likely to remain so for decades to come. Even though it is the most valuable cryptocurrency, that does not mean it does not have room to grow.
Several predictions claim that Bitcoin will reach $100,000, $500,000, or even 1 million dollars As sensational as they may sound, the general theme that Bitcoin’s value is likely to increase is probably not wrong.
With limited supply, falling inflation, and rising demand, Bitcoin’s price will continue to face upward pressure as it is pushed and pulled by the fundamental laws of supply and demand. While this doesn’t mean there won’t be bear markets and corrections along the way, there is no safer option for building cryptocurrency portfolios than Bitcoin for investors with a long-term time horizon.
Bitcoin recently dropped to as low as $57,000, but has since recovered some of its losses and is currently trading around $63,000. Even though it has surged in recent days, there is still an opportunity for investors. Just as the days of Bitcoin being worth less than $10,000 are over, the days of Bitcoin trading below $100,000 are likely numbered.
2. Batteries
I am a big fan of Battery (STX -1.33%). As a layer 2 blockchain compatible with Bitcoin, it introduces new features that Bitcoin does not naturally have, namely Challenge abilities.
The thesis for Battery is clear: it effectively unlocks Bitcoin’s $1.5 trillion market cap for use beyond the traditional buy-and-hold strategy. Its layered architecture provides the benefit of Bitcoin’s security and decentralization, but with the added ability to participate in several popular DeFi uses such as lending protocols, purchasing non-fungible tokens, and yield farming.
To quantify the potential of Stacks, take a look at the Layer 2 blockchains built on Ethereum (CRYPTO: ETH). Today, Ethereum-compatible layer 2 tokens are collectively worth about $23 billion. If Stacks were to reach utility levels similar to those of Ethereum’s comparable support tokens, its price would increase seven times.
Compared to Bitcoin, Stacks’ price has been hit particularly hard during the recent correction. Over the past few weeks, it has dropped by more than 30%. Like Bitcoin, it has recovered some of these losses, but its price remains well below its high of $3.48.
A recovery from its previous high would give investors a generous 50% gain, but considering its potential as the first Layer 2 Bitcoin and its ability to grow as large as Ethereum’s Layer 2 blockchains, there is still plenty of upside potential for Stacks.
3. Aerodrome
If you haven’t heard, the most popular blockchain on the market today is arguably Base. It’s Coinbase Global(NASDAQ: COIN) has its own blockchain and has been optimized to have a user-friendly interface as well as extremely low fees and ultra-fast speeds.
This may sound a bit technical, but Base does not have its own cryptocurrency. This design is likely the result of an attempt to stay out of reach of Securities and Exchange Commissionbut that doesn’t mean there aren’t opportunities to make money.
Instead of investing in a native cryptocurrency on Base, as you would with Ethereum or Bitcoin, the best option to give your portfolio some exposure to the growing potential of Base is to invest in the most valuable cryptocurrency built on Base: Aerodrome (AEROSOL).
The airfield is known as a decentralized exchange (DEX)Users can swap tokens, provide liquidity to earn yield, and even earn rewards for participating in voting processes. Currently, Aerodrome accounts for nearly half of Base’s total value, making it the perfect proxy to gain exposure to the burgeoning blockchain.
Aerodrome has dropped about 40% over the past week. This may seem bearish, but this type of correction was probably long overdue. Since its launch in February of this year, Aerodrome has increased by over 1,100%.
With its unique technology that encourages user participation and its location on one of the most popular and promising blockchains, it could be a hidden gem in the market. But Aerodrome is still new and has a lot to prove, so proceed with caution.