The Best Cryptocurrencies To Invest In For 2023
There are thousands of cryptocurrencies in circulation, and each year new coins are added. With so many options to choose from, it can be difficult deciding which coin to invest in. That’s why we created this buying guide to list the best cryptocurrencies to invest in for 2023. Here you will find both stalwart coins and new crypto offerings. We will cover the pros and cons of each coin. We will also provide some insight into what the crypto market may look like in the near future.
Things to consider and do before you begin investing in crypto
Before you begin investing in crypto, here are some things you should do.:
Do your research: It is important to do plenty research beforehand. While this seems like a lot of work, it will help you make better decisions down the road. Read up on the coin’s price history, market outlook, and current price. You should also familiarize yourself with crypto concepts and terminology like proof-of-work, mining, staking, and blockchains. If possible, read the crypto’s white paper. These are documents that state the features and data of the cryptocurrency. Lastly, you should have some understanding on the best crypto investing strategies. While the research will be time consuming and at times difficult, it will all pay off in the long run. Being knowledgeable in the world of cryptocurrencies will help you determine which coin to invest in.
A good source of information about cryptocurrencies is various crypto related forums on Reddit. Those forums contain personal accounts and investing advice from users. r/CryptoCurrency and r/BitcoinCA are good examples.
Develop a budget: Set a firm limit for how much money you want to spend on cryptocurrencies. Consider the amount you are comfortable spending. A common saying in crypto investing is “don’t invest what you can’t afford to lose”. Keep this saying in mind when you are developing your budget.
Watch the markets: As you start to invest, keep an eye on the price charts for the cryptocurrencies you are interested in. Monitoring the crypto market will help you determine price patterns for certain coins. This will also help you invest in a particular cryptocurrency at the right time.
Be prepared for loses: The cryptocurrency market is a highly volatile. Prices can rise and fall within a matter of hours or minutes. That is why you should be prepared for a scenario in which you take a lose in your investment. While this may be a tough thing to accept, you should make some gains if you practice the steps described above.
Best cryptocurrency to invest in overall
Bitcoin paved the way for crypto investing. First released in 2013, Bitcoin grew from a small asset into the most valuable cryptocurrency. The price for Bitcoin as of January 10, 2023, is $23,245 CAD (Canadian Dollar). While this price may seem high (and it is), it is actually a fall from Bitcoin’s value in November 2021, which peaked at $84,174 CAD. Even though Bitcoin is in the middle of down swing, there is always potential for the price to rise again. Financial experts believe Bitcoin’s price will increase as more industries accept cryptocurrency as a valid form of payment. Another reason given for Bitcoin’s comeback is the high inflation of traditional currencies. Experts believe people will turn to cryptocurrencies (Bitcoin in particular) as an alternative, which will drive up prices. An encouraging price prediction estimates Bitcoin’s worth will hit $1 million by the end of the decade.
There are many reasons why buying Bitcoin is a worthy investment. Bitcoin has a proven track record of generating return for its investors. This means there is less uncertainty on whether investing BTC is worthwhile. At the time of writing, Bitcoin’s price is relatively low. This would be a good time to buy and potentially earn a high return once the coin’s price surges. Lastly, Bitcoin has an established history. This makes it easier for you to view its performance and make price predictions.
The downside to investing in Bitcoin is that it does have a high price. It is certainly not an affordable option for people with a tight budget. An alternative would be to buy fractions of a Bitcoin. For example. 0.0013 BTC costs about $51.00 CAD. However, some people may not want to buy fractions of BTC. And like other cryptocurrencies, Bitcoin’s price frequently fluctuates. This was certainly evident over the past year. If you are not a fan of high volatility, then we suggest finding a coin that is more stable, or one that has a smaller price.
- Proven to generate large returns.
- Good time to buy: prices are low and there is potential for a boom.
- Has an established history, which makes it easier to make price predictions.
- Greater risk of losing a large amount of money.
Best stablecoin to invest in
Stablecoins differ from other cryptocurrencies in that their value is tied to real life asset, like the Canadian dollar. This means that satblecoins are far less volatile then cryptocurrencies like Bitcoin or Ethereum. Our pick for the best stablecoin to invest in went to Tether. This coin is tied to the U.S. dollar. Because of this, Tether’s price has remained around $1.25 CAD. It is the most valuable stablecoin with a market capitalization of $88.79 billion CAD.
Although this price has remained consistent, there have been some minor fluctuations. The price for stablecoins is affected by the demand for traditional cryptocurrencies. When demand for other coins are high, demand for stablecoins is low, which reduces price. Tether has also dealt with legal issues, which further affects its price. In April 2019, the New York Attorney General’s office took legal action against Tether. The office accused Tether of covering up large financial losses and lying about it being fully backed by the U.S. dollar. This legal issue caused Tether’s value to drop by 3%.
Still, Tether’s fluctuations are not as drastic as those of other cryptocurrencies. Even with the 3% decrease, Tether’s price quickly rebounded and returned to its consistent value. Because of its stability, tether is a good option for first time investors and those looking to avoid extreme volatility. The down side to investing in Tether is that you will not see large returns unless you use investing strategies like staking. Simply holding Tether will not generate gains since its price remains the same. Lastly, Tether retains its values as long as its maintains its tie to its real world asset. If the relationship is broken or the asset loses its value, Tether will lose its value as well. The recent collapse of TerraUSD and its companion coin LUNA is an example of a stablecoin losing its value; the price fell from $0.99 CAD to $0.015 CAD.
- Less volatile than other cryptocurrencies.
- You will only get large returns if you use investing strategies.
- Could lose its value if it cannot maintain its peg to real world asset.
Best new cryptocurrency to invest in
For this category, we looked at cryptocurrencies released within the past three years. The coin that stood out to us was Solana. Initially created as a crypto-computing platform, the Solana token was launched on March 16, 2020. It quickly established itself as the main competitor to Ethereum. The Solana network is extremely quick and has low transaction fees thanks to its proof-of-history mechanism. The efficiency of the Solana network is the main reason why SOL became popular. The coin’s price rose by almost 12,000% in 2021 and eventually gained a market capitalization of $66 billion.
But like other cryptocurrencies, Solana had a tough 2022. Its price dropped by 87.74% over a one-year time period. As of January 10, 2023, Solana’s price is $21.86 CAD, and its market cap is $8.082 billion. While Solana’s recent performance is unappealing for investors, there is hope that the coin will bounce back in 2023. According to DigitalCoinPrice, investors have a Bullish sentiment for Solana in January 2023. This means that Solana is expected to go up in price. By the end of the month, the price could reach $47.75. That’s why investors should buy Solana early before it jumps in price. Plus, Solana is still popular with investors due to its operating system.
One thing to be mindful of is its performance history. Since it is a new coin, Solana does not have an extensive history investors can research before buying. This makes it harder to predict future prices.
- Potential to rise in price, generate large gains.
- Solana blockchain is fast and has low transaction fees.
- Performance history is not extensive, which makes it harder to predict future prices.
Best affordable cryptocurrency to invest in
For anyone looking for a cheaper coin to buy, look no further than Cardano. Launched in 2017, Cardano’s all time high is $3.90 CAD, which was reached in September 2021. Since then, Cardano’s price as of January 10, 2023, is $0.43 CAD. Even though it has a low price, Cardano has the eighth largest market capitalization at $25.46 billion CAD. The reason for Cardano’s sudden rise can be attributed to its design. Cardonao’s creators wanted the coin to directly compete with the big cryptocurrencies like Bitcoin and Ethereum. To achieve this, Cardano’s blockchain was designed to be more efficient, adaptable, and capable than other blockchain networks. For example, transactions on the Cardano blockchain are quicker thanks to its proof-of-work mechanism. The fast transaction time is one of the main reasons why Cardano has become so popular.
While Cardano is in the middle of a downswing, there is hope that the price will push pass the $1.00 USD mark. In 2021, Cardano announced an update to its network. This update would increase functionality. As soon as the update was announced, the Cardano network saw increased interest and activity. Financial experts believe this could be the fuel that drives up Cardano’s price.
The main reason to buy Cardano is its affordable price. You can buy large amount for Cardano and still pay a reasonable price for it. Another reason to invest in Cardano is its potential upswing. Many crypto experts believe Cardano is primed to rise in price. Therefore, now would be a good time to buy the token at a low price and potentially earn large amounts of money in return. The downside to investing in Cardano is that it is still a small coin. It could struggle to compete with larger crypto assets. Secondly, Cardano’s success relies on the number of people who adopted the coin. If no one wants the buy the coin, investors will feel that Cardano is a worthless crypto currency. This would diminish the coin’s value.
- Affordable price.
- Primed to rise in price.
- May not be able to compete with larger coins.
- Dependent on lots of people investing in the coin.
For this article, we spent over eight hours researching various cryptocurrencies. We collected information from several cryptocurrency exchanges and crypto related websites. We tried to select coins that appealed to both beginner and experienced crypto investors. We also tried to find coins that had the potential to rise in price.
Frequently asked questions about cryptocurrency investing
Where can I buy cryptocurrency?
The main place to buy cryptocurrencies is on a crypto exchange. This is website where users can buy, sell, or convert cryptocurrency. Some popular examples include Binance, Kraken, and CoinSmart. Peer-to-peer (p2p) networks let you buy cryptocurrencies directly from another person. Paxful and Binance p2p are two examples of p2p networks. Lastly, cryptocurrency ATMs are another place you can buy cryptocurrency. They operated like regular ATMs, except you use insert money to purchase cryptocurrency. Bitcoin ATMs are the most common version in Canada. Hopefully more cryptocurrencies will have their own ATMs in the near future. To find a Bitcoin ATM in your area, click on this link.
What are crypto investing strategies?
Having a strategy in place for crypto investing is important. It will help you set goals/objectives, make better decisions, and enable you to earn more money. Here are some strategies you can follow.
There are two strategies you can use for long-term investing. The first is investing early in a cryptocurrency or crypto related project. If you get in on a new and exciting project in its early stages, you have a greater chance of earning more in the future. You can use resources like CoinGecko, ICObench, or Cryptowatch to find new cryptocurrencies to invest in. The second long-term strategy is holding, also known as HODL (hold on for dear life). This is an easy and effective strategy which is good for beginners. All you have to do is buy the token and hold onto them until they increase in value. One the price is right, you sell off the token. This strategy follows the age-old motto “buy low, sell high”.
Many crypto exchanges offer various investing products or services. For example, Binance has a section devoted to crypto investing, which is called Binance Earn. The section has investing services that you can use to earn interest on your crypto assets. I used the staking service to invest some Polkadot I was holding. I placed the Polkadot in a 30 day term where interest was paid out each day. At the end of the term, I cashed out the amount I invested plus the interest I accrued. There are also investments where you can cash out your crypto at any time. These services offered by crypto exchanges cater to short-term investing. In most cases, the max amount of time your investment will be locked in is 120 days, which equals three months. Plus, the ability to cash out at any time gives you added flexibility.
If you want to avoid volatility, then dollar cost averaging is a good strategy to follow. In this plan, you invest a set amount of money in crypto periodically. For example, investing $100 every month. Dollar cost averaging reduces the risk of short-term volatility. You invest in crypto when the market is both up and down, so you will not feel the loses as much. The opposite approach is lump sum investing. Instead of investing small amounts regularly, you spend all the money you have available all at once. Since lump sum investing and dollar cost averaging are polar opposites, each strategy will depend on your investment style, the type of crypto asset you want to buy, your financial situation, and the current market situation. Lump sum investing works best during boom periods. Dollar cost averaging should be used during down periods.
The last piece of crypto advise would be to diversify your portfolio. Try to spread your investments into multiple cryptocurrencies. Putting all of your money into one coin is risky; the coin’s value could tank, which means you would lose a large amount of money. Having investments in several cryptocurrencies reduces the chance you will lose money. For example, you have investments in Bitcoin, Tether, Avalanche, and Cardano. Bitcoin’s and Caradno’s value decreases, but Tether and Avalanche remain the same or increase in price. This example shows that owning multiple coins acts as a backup when one or more of your investments performs poorly.
Why are crypto prices going down?
Throughout May and into June, the cryptocurrency market was in a downward trend. The prices for several coins plummeted to some of the lowest points in recent memory. But what was the reason for the fall? The Los Angeles Times cited two main factors as the driving force behind the crypto market slump.
The first factor is governments’ response to inflation. During the early days of the Covid-19 pandemic The U.S. Federal Reserve cut interest rates, which means the cost of borrowing money was lowered. This was done to combat the world-wide economic slump. What resulted was inflation rising to its highest point in four decades. In 2022, prices for gas, food, and other essentials rose even higher. To combat inflation, governments in several countries raised interest rates and cut down on their money supply. This uneasy financial situation made investors anxious. As a result, many people sold off their crypto investment, causing prices across the board to fall.
The second factor cited was the collapse of TerraUSD and LUNA. Both were cryptocurrencies operation on the Terra blockchain. TerraUSD is a stablecoin pegged to the U.S. dollar, while Luna acted as a collateral coin. In early May, TerraUSD lost its beg to the dollar, causing its value to fall below the $1.00 mark. AsTerraUSD collapsed, LUNA investors sold of their holdings of the coin. That lead to LUNA losing 99% of its value. The coin was delisted by several exchanges and lead to the creation of a new version of LUNA called Terra. This massive collapse affected other cryptocurrencies. Nervous investors sold off some of their crypto holdings, which resulted in prices falling.
Another shakeup to the cryptocurrency market was the collapse of crypto exchange FXT and the arrest of its founder, Sam Bankman-Fried. On November2, 2022, CoinDesk published an article revealing that Bankman-Fried’s cryptocurrency trading firm Alameda Research held a substantial amount of FTT, the token for FXT. Bankman-Fried was later accused of using FTX customer funds to support Alameda’s activities. On November 7, 2022, Binance announced it intend on selling its FTT holdings. This announcement sparked a major sell off, causing the token’s price to plummet. The CoinDesk article also caused millions of users to close their FTX accounts. By November 11, 2022, FTX filed for Chapter 11 bankruptcy protection. FTX’s collapse had a large ripple effect. Tether dipped to $0.97, and Bitcoin fell to its lowest price in two years. Other crypto exchanges saw increased withdrawals. Other cryptocurrency companies filed for Chapter 11 as well, the crypto lender BlockFi being one example. As of January 2023, Bankman-Fried has been arrested on multiple fraud charges, and the crypto market is just starting to recover. But the ramifications of the FTX collapse should last for quite some time.
What are crypto price predictions for 2023?
2022 has been a hard year for cryptocurrencies, and the difficulties will likely continue heading into 2023. Some financial experts are claiming that the crypto market is heading into a “crypto winter”. This term means that crypto price will continue to fall and then stagnate for several years. This scenario occurred after the 2017 Cryptocurrency boom. In 2018, markets crashed, and it took about two years before many cryptocurrencies regained their value. To further complicate things, U.S. senator Cynthia Lummis is unveiling a new crypto bill which will define whether different cryptocurrencies are securities or commodities. The bill also defines which agencies will regulate them. What affect his bill will have on future prices is yet to be seen, but some people fear this will drive down the market even further. There are other factors impacting the crypto market. The war in Ukraine, supply chain issues in China, and the fallout from FTX’s collapse continue to harm prices.
While the crypto market did not start 2023 on the right foot, there is still hope for the future. According to CoinPriceForecast, several coins are expected to rebound in the new year. Mid-way through 2023, Bitcoin is forecasted to cost $29,512. The year end price could fall to $26,069, but that is around $2,000 more than what Bitcoin started 2023 at. Solana could jump to $39.29, Ethereum to $2,085, and Cardano to $0.47 by the end of 2023. Each of these coins is forecasted to gradually raise in price for the upcoming years.
Please remember that crypto price predictions are not set in stone. With such high volatility, the crypto market can boom or bust when you least expect it.
Sources used in this article
GO BankingRates: 8 Best Cryptocurrencies To Invest In for 2022
Investopedia: What you Must Know Before Investing In Crypto
Investopedia: 10 Most Important Cryptocurrencies Other Than Bitcoin
SwissBorg: The ultimate guide to crypto investing strategies
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