Dominic Basulto, an analyst at consulting giant The Motley Fool, shared three altcoins that he has been on the rise recently. These coins appear as ETH, ADA and AVAX. Here are the details…
Analyst; Hopeful for AVAX, ETH and ADA
In the crypto market, all eyes are on Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization. As we reported on Kriptokoin.com, at one point, Bitcoin increased more than 80 percent over the year as it rose as high as $ 30,000. However, Bitcoin has started to pull back in recent days and is currently only up 3 percent in the last 30 days. At the same time, some cryptos are keeping up with Bitcoin’s overall performance.
For example, Ethereum (ETH) is up more than 63 percent over the year and 10 percent in the last 30 days. Both Avalanche (AVAX) and Cardano (ADA) rose more than 64 percent during the year. Here are the arguments for why these three cryptocurrencies may be ready to go higher than Bitcoin, according to the analyst.
Layer-1 blockchains like AVAX gain momentum
All three of these cryptos are leading layer-1 blockchains. You can think of these Blockchains as the “building blocks” of the crypto industry. Once you have a layer 1 blockchain like Ethereum, you can start building on it. That means enjoying things like NFTs, smart contracts, decentralized finance (DeFi), Blockchain games, and web3 decentralized applications.
More importantly, these are all innovations that the Bitcoin Blockchain was not designed to deliver. Bitcoin is, first of all, a potential store of value similar to gold. Satoshi Nakamoto, the anonymous creator of Bitcoin, also designed it as a peer-to-peer electronic cash system. But beyond that, Bitcoin doesn’t offer the functionality and variety that you can find in large Layer 1 Blockchain networks. For example, if you want to get involved in the world of decentralized finance (DeFi), you would prefer a blockchain like Ethereum.
As a result, a strong investment thesis currently includes layer-1 blockchains. All three of these chains – Ethereum, Cardano, and Avalanche – are quite diverse and all rank in the top 15 cryptocurrencies by market cap. In terms of market cap, Ethereum only follows Bitcoin. Launched in 2017, Cardano currently ranks as the #7 crypto by market cap. During the recent crypto bull market rally, Avalanche gained attention as a potential “Ethereum killer.” In January 2023, Avalanche signed a key partnership agreement with Amazon Web Services to provide Blockchain services to large corporate and government clients.
Not every layer-1 network is the same
However, not all layer-1 blockchains see the same kind of performance as Ethereum, Cardano, and Avalanche. For example, if you look at smaller networks, many of them are really struggling right now, according to the analyst. Because Aptos (APT) has lost 9% in the last 30 days, while Algorand (ALGO) has lost 11%. The biggest factor here seems to be a general flight of investors towards quality. While sentiment has turned markedly bullish for crypto in 2023, there is an awareness that we are not out of the woods yet. To give an example: Bitcoin seemed unstoppable in the first three months of the year but is now struggling to surpass $30,000.
As a result, investors are still looking for high-quality names. This often means focusing on cryptos with large market caps and the largest Blockchain ecosystems. This explains why some layer-1 blockchains perform so well while others fail.
Which layer-1 blockchain is the best investment?
When choosing among the best layer-1 blockchains, the obvious choice would be Ethereum. This crypto, just like Bitcoin, is a favorite of institutional investors. It has a large market capitalization, a well-diversified ecosystem, and a large developer base. Ethereum also ranks #1 for NFT transaction volume and #1 for Total Locked Value (TVL), an important metric for determining how much activity actually takes place on a Blockchain.
However, if you’re looking for a candidate that can outperform Ethereum in the long run, it’s Cardano, according to the analyst. Basulto said, “This crypto, which has never traded above $3.10, is rising rapidly this year. It kept pace with both Ethereum and Bitcoin, up 64% over the year. And it has a new strategy based on DeFi, which is very successful. “The latest Q1 2023 metrics for Cardano have arrived and all signals are flashing green.”
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