Cryptocurrency works on blockchain technology. It consists of separate blocks that may contain, for example, data about transactions made in a certain cryptocurrency. Each block provides a reference to the previous one. This is how a chain of connected blocks is created. Thanks to the encryption of information, the chain remains unchanged, and attackers cannot change its data.
Many investors are attracted today by the potential profit from crypto investments. They often buy Bitcoin, Ethereum, Tether, swap XRP to BTC, TRX to BTC, etc., in order to make a profit. Read below in detail what you need to know to invest in cryptocurrency profitably and find a list of top coins for investment in 2022.
Features of Investing in Cryptocurrencies in 2022
Today, cryptocurrencies remain assets with increased risks for investors. However, having significant experience in investments, you can really earn money or invest in future prospects. You should invest in an electronic currency that meets your needs and is based on what you plan to get from it.
The coins you choose to invest in should be fairly simple and straightforward. Mechanisms for the exchange and withdrawal of funds should not be resource-intensive; that is, they should not take a lot of time. Thus, the project should not only be promising but also with the implementation of various innovative solutions and unique technologies. Such a project will provide you with good opportunities for earning.
The most promising coins in 2022 include the following:
Practice shows that Bitcoin and Ethereum have remained the most popular for many years. They are very attractive for investment. Therefore, investors often swap Ethereum to Bitcoin or Bitcoin to Ethereum on online cryptocurrency exchanges. Read more about these coins below.
List of the Most Popular Coins for Investment
Consider the list of top 5 coins to invest in 2022 and their brief characteristics:
- Bitcoin (BTC). It is the first and most popular cryptocurrency. Its capitalization has reached $1 trillion. It accounts for about 40% of the value of the crypto market. The price of Bitcoin is quite volatile. Thus, for example, in 2011, the price was about 30 dollars, and after 11 years, it has grown a thousand times. However, the coin is mostly showing an increase in value. It is profitable to use it as a long-term investment;
- Ethereum (ETH). It is the most popular alternative to Bitcoin. Its goal is to create a decentralized set of financial products that can be freely accessed by anyone in the world, regardless of nationality, ethnicity, or religion. The current value of Ether is $1,637.01. Despite being second only to Bitcoin in terms of market capitalization, Ethereum accounts for 20% of the total market;
- Solana (SOL). This crypto coin solved one of the important problems associated with Ethereum – the reduction of transaction fees. Solana was created as a top-notch decentralized finance (Defi) platform that eliminates financial intermediaries, such as brokers, banks, and centralized exchanges. Launched in 2020, Solana is taking up a large market share, and its value is constantly rising;
- Cardano (ADA). Cardano is one of the largest blockchains that has successfully launched a more energy-efficient Proof-of-Stake protocol. The coin showed a sharp increase in 2021. It attracts many investors in 2022;
- Avalanche (AVAX). At the start of 2021, the coin was trading below $3. By the end of November 2021, it reached an all-time high of over $146. As of September 2022, the price of Avalanche is $18.40, and the market capitalization is $5.42B USD. So, it remains attractive for investments.
Thus, investing in cryptocurrencies can really make a profit. But it is very important to decide on the choice of a reliable coin, develop an effective investment strategy, and assess possible risks.