3 Best Cryptocurrency Investments for 2023
With over 20,000+ cryptocurrencies in circulation it’s a huge challenge to determine how to best allocate your hard earned Benjamins.
To help you see the forest through the trees, we’ve compiled a list of three deeply discounted cryptocurrencies poised for a bullish run in 2023 that warrant your consideration.
BITCOIN (BTC)
You don’t have to be Nostradamus to consider building a new - or added - position in the biggest and baddest player in the crypto space. A combination of limited token supply, continued macroeconomic inflation, and transaction improvements make Bitcoin a compelling investment opportunity.
Only 21 million bitcoins will ever be in existence and at the end of 2022, roughly 19 million were already mined. And due to the rewards schedule, the very last Bitcoin will likely be mined sometime in 2140.
But look closer, and you’ll see that total supply is actually significantly lower!
A report from blockchain analysis company, Chainanalysis, claims that roughly 20% of the Bitcoins (roughly 3.5 million BTC) currently in circulation may be lost forever. The implications of the number of coins lost are potentially huge for Bitcoin’s long-term price as demand will continue to outstrip supply.
From an investment perspective, it’s critical to consider whether a web3 project has a finite (limited) or infinite (unlimited) supply of tokens that users can hold. Bitcoin is known for its famed 21 million supply, but it’s worth noting that many other projects have the potential to print tokens forever. Not ideal.
Can you think of an example we are all too familiar with that doesn't have a limited supply?
The U.S. dollar.
Between mid-2019 and January 2022, more than 30% of the U.S. dollars in circulation were printed by the Federal Reserve. While the Fed has expanded the money supply for decades, the unprecedented monetary expansion that occurred during the COVID pandemic greatly contributed to the 40-year high inflation rates that we see today.
In November, 2022 Kevin O’Leary (aka Mr. Wonderful) quipped, “if you print $6.72 trillion in thirty months, what the hell did you think was going to happen? Of course there’s going to be inflation.”
Cue the printing machine:
While there are arguments for - and against - Bitcoin as a hedge against inflation, it’s important to consider the longer-term trends. Before the Fed embarked on its most recent round of quantitative easing in late 2019 / early 2020 the price of Bitcoin hovered around $9,000.
Today we are trending above $20,000. If we look back at the charts starting in 2009 - when quantitative easing began as a result of the financial crisis - Bitcoin was trading for pennies; not dollars.
Over the long-term, it’s becoming even more evident that Bitcoin is capable of outpacing inflation.
From a technology perspective, no discussion of Bitcoin’s potential can be had without looking at the progress of its Lightning Network; a second layer added to Bitcoin’s blockchain that allows users to send or receive Bitcoin quickly and cheaply by essentially leveraging an HOV lane on a highway.
Just last week, CoinDesk reported that digital payments firm Strike is expanding its international money transfer service that runs on Bitcoin’s Lightning Network to the Philippines in a push to tap into the country’s $12 billion remittance market, one of the world’s largest.
The Opportunity
Bitcoin has dropped more than 75% since hitting all-time highs of $69,000 in November 2021. Buying Bitcoin around the $20,000 mark is “basically a fire sale” according to the well-known BlockchainCenter.net Rainbow Chart with potential upside of over 300% - should the digital currency regain its former all-time high.
CARDANO (ADA)
Launched in 2017, Cardano’s developer ecosystem grew substantially in 2022 and is setting itself up to be a standout in the world of smart contracts, NFTs, and decentralized finance (DeFi). These factors provide powerful reasons to consider adding it to your crypto portfolio.
Often pegged as the “Ethereum-killer,” Cardano addresses the strategic challenges facing blockchain tech: scalability, interoperability and sustainability.
Cardano lowers transaction fees and increases throughput scalability through the use of multiple computational layers, proof-of-stake (PoS) consensus, and its ability to upgrade its network with ease.
While its ability to leverage and scale technology is impressive, Cardano’s major advantage over its web3 rivals: community.
According to the analysis shared on the @cardano_whale account:
As an ecosystem, it has all the functionality of the big players including a robust DeFi stack, growing smart contract applications and NFTs. Unlike all other layer 1 platforms (think Solana, Binance, Near Protocol and Avalanche), Cardano's dApps do not depend on money injected by venture capitalists or outside funding.
This means that Cardano will develop and gain traction naturally, with inclusivity and community participation at its core.
It’s All About Continued Progress
Here are just a few of the ways that Cardano has shown its strength as a platform and grown amidst the bear market of 2022.
As of 2023, there are over 2,000 dApps in the Cardano ecosystem leveraging smart contracts. And user wallets are growing exponentially, with 30,000 being added weekly to the already 3.5 million active wallets in existence.
Cardano's value as a network has essentially doubled in the first month of 2023. The total value locked (TVL) grew from $48.95 million on January 1 to $97.05 million as of early February. Remember, higher rates of TVL are associated with more trusted projects.
Djed (DJED), Cardano’s first overcollateralized stablecoin is now live on the mainnet and has caused a massive spike in demand for ADA. This launch is a compounding step for the platform as it offers a new mechanism to provide a steady stream of revenue while generating a stable, and more decentralized alternative to traditional fiat-pegged stablecoins.
Input Output Global, the team behind the Cardano ecosystem, will release a toolkit suite to enable developers to deploy custom-built sidechains aimed at improving the overall ecosystem. Sidechains are a great mechanism for creators to leverage Cardano’s infrastructure to build scalable and use-case specific projects without compromising the stability or security of the main network.
Token Supply Check
As of this writing, the Cardano platform has roughly 87.5% of all ADA supply circulating through the ecosystem; 35 billion ADA in circulation vs. a maximum supply of 40 billion.
The Opportunity
When looking for projects that are “building in a bear market,” look no further than the strides made by the developers backing Cardano. Couple these tech innovations with one of the most compelling communities in the web3 space and you have yourself a recipe for investment success. With ADA hovering around $0.40 - down from an all time high of roughly $3.00 - investors have a tremendous opportunity to take a position at a discount with substantial upside.
POLYGON (MATIC)
Polygon is the most popular layer 2 scaling solution for Ethereum. As a platform, Polygon operates via proof-of-stake and addresses Ethereum's scalability issues by facilitating faster and cheaper transactions.
To reduce computation and achieve greater scalability, Polygon will launch its suite of zero-knowledge rollups (ZK rollups) in early 2023 designed to increase throughput on Ethereum without sacrificing decentralization or security.
Essentially, Polygon is the mid 2000s Mazda of blockchains. Zoom Zoom.
(Don’t worry, it’s a good thing!)
Overall, Polygon is a huge win for businesses and developers looking to build advanced dApps and DeFi solutions on Ethereum’s blockchain while taking advantage of increased security, rapid transaction speeds, and lowered costs.
Like Ethereum and Cardano, consumers and developers alike must pay transaction fees with Polygon. This means that as the ecosystem grows more and more individuals will need this token in their crypto wallets.
Their ecosystem of partners, platforms and applications is also enormous.
And it doesn’t stop at this infographic either. Major web2 brands are deploying projects on Polygon.The news headlines speak for themselves…
Coca-Cola Launches Surprise NFTs on Polygon Network (Aug. 9, 2022)
'Starbucks Odyssey' Beta Is Now Live on Polygon (Dec. 8, 2022)
JPMorgan executes first DeFi transaction on Polygon (Nov. 2, 2022)
Walt Disney And Polygon Are Working On A Proof Of Concept (Nov. 11, 2022)
Nike Launches .Swoosh Web3 Platform, With Polygon NFTs (Nov. 14, 2022)
Reddit Users Have Minted More Than 5 Million NFT Avatars on Polygon (Dec. 12, 2022)
Mastercard Taps Polygon for Web3 Musical Artist Accelerator Program (Jan. 6, 2023)
Doritos Enter Metaverse With Polygon NFTs (Feb. 5, 2023)
Based on Polygon’s technology and ability to attract key players to its platform, users and audiences will continue to flock to this clear-cut leader in the blockchain space.
Polygon's potential is only starting to be realized. And it’s an attractive investment opportunity for those who believe in the growth of the Ethereum ecosystem and decentralized finance (DeFi) in general.
Token Supply Check
As of this writing, the Polygon platform has roughly 90% of all MATIC supply circulating through the ecosystem; 9 billion MATIC in circulation vs. a maximum supply of 10 billion.
The Opportunity
Early bullish sentiment in 2023 has allowed Polygon to recover slightly from the ongoing crypto winter. Though Polygon is still down more than 60% from its all-time high of almost $3.00, this should be considered an opportunity to add to your current position or create a new one. As big brands and organizations get FOMO on the growing web3 popularity, Polygon is in position to become the premier blockchain of record for its security, speed and ease of use.
We hope you enjoyed this review of a few deeply discounted cryptocurrency opportunities in 2023 that you should consider when thinking about adding or starting new positions. If you are looking for an easy-to-read guide to help you on your investment journey, consider investing like the best! Warren Buffett in a Web3 World takes over 1,000 pages of wisdom from the Oracle of Omaha and condenses it into a snackable investment guide for the web3 space!
General Disclaimer
Matthew Snider is the president and co-founder of the Block 3 Strategy Group, and is a registered Investment Advisor Representative. The views expressed in this post reflect general recommendations and may include positions held by Block3 Strategy Group or its affiliates.
Each reader and investor must do their own research when considering a position and take into account their own risk tolerance in light of their overall portfolio, goals, objectives, etc. Should you need tailored advice from a licensed fiduciary, please contact us at our website or reach out on twitter.