Which are the best digital currencies for investment? Introduction of futuristic digital currencies

What are the best future digital currencies for investment? Finding promising digital currencies for investment requires considering several factors. In this article, according to fundamental analysis and personal perspective, we introduce some digital currencies that can perform well in the next bull cycle. Of course, introducing them does not mean investment advice and the main purpose of this article is only to share information.

A look at the future of the digital currency market

Although the digital currency market is more nascent than other financial markets, these currencies have become integral parts of the entire financial markets. It is almost impossible to think about investing in different financial markets and not think of investing in digital currencies.

The fever of digital currencies has spread to our own country, Iran, and this field has seen significant growth in Iran in recent years. The comprehensive report of digital currencies in Iran, which was compiled by Aruzdigital Group, was a confirmation of this.

Read more: 1402 digital currency report was published; Download the comprehensive report of Iran’s digital currencies

However, the digital currency market has always seen fluctuations and up and down cycles. After the significant growth of the digital currency market in 2021, this market entered a downward trend from the beginning of 2022. But despite the unfavorable conditions in early 2023, the market situation is expected to improve in 2024.

There are less than 200 days left until the bitcoin halving event. This event will happen on May 4, 2024 and will reduce the supply rate of Bitcoin. We know that the acceptance rate of Bitcoin is increasing over time and the demand for it is high; Therefore, according to the law of supply and demand, a decrease in the supply of Bitcoin and an increase in demand for it will lead to an increase in the value of Bitcoin.

On the other hand, the news related to the launch of Bitcoin Exchange Traded Funds (ETF) has pushed the market sentiment to a positive direction. These days, the possibility of the US Securities and Exchange Commission (SEC) approving the launch of spot bitcoin ETFs has intensified, which can attract more investors to this field.

Read more: All about Bitcoin ETFs in plain language

In addition to these, attention should also be paid to the macroeconomic situation. The inflation rate in the United States had reached above 8% in 2022. But this rate has decreased significantly in 2023. However, the Federal Reserve still believes that the inflation rate should decrease.

An increase in interest rates can have a negative impact on the digital currency market. On the other hand, the intensification of geo-political tensions can negatively affect prices and the global supply chain.

However, the general trend of the US economy is expected to improve in 2024; Therefore, the year 2024 can be considered as a good opportunity for investment. Of course, choosing the right future digital currencies for investment is very important. In the following, we introduce some promising digital currencies that have more competitive power than others.

Introduction of futuristic digital currencies

A list of promising digital currencies that have high growth potential in the next bullish cycle and are suitable options for investment are:

• Bitcoin
• Ethereum
• China Link
• Solana
• Cardano
• Polkadat
• Polygan

Before proceeding further, it is better to share with you some important points about investing in digital currencies.

Take capital management seriously! Be sure to have a portfolio of different digital currencies and don’t invest all your money in one digital currency. Many investors who suffered heavy losses had either invested all their capital in one cryptocurrency or had a portfolio of worthless cryptocurrencies.

Enter this market with capital that will not disrupt your life if you lose it! The digital currency market is still immature and has many risks. Our goal is not to scare you! What we want to say is:

Do not be greedy! If the price of a digital currency goes up a lot, don’t expect it to go up again after your investment. A safe investment with lower profit is better than gambling on some digital currencies, such as memecoins or shetcoins. Financial success depends on your persistence in this market, not getting rich overnight!

Allocate most of your capital to Bitcoin. Since its emergence in 2009, Bitcoin has proven its long-term growth potential. Although many altcoins with new technologies emerged after Bitcoin, Bitcoin is still recognized as the most valuable digital currency and has held its position well.

Compliance with these points is a prerequisite for successful investment in the digital currency market. Now let’s introduce some digital currencies that have good growth potential in the future:

Bitcoin (BTC)

Bitcoin is undoubtedly the first futuristic digital currency that will be introduced in this article. The market value of Bitcoin at the time of writing is about $666 billion. Although this seems small compared to the $13 trillion market for gold and $45 trillion in US stocks, Bitcoin’s market cap has grown rapidly over the past 5 years from just $10 billion.

As long as the adoption rate of Bitcoin increases, the market value of this digital currency has considerable room for growth. The share of Bitcoin compared to other global financial assets is still low and around 0.5%.

If this amount reaches 1-10% in the coming years, its market value can increase to several trillion dollars. Therefore, many investors have started allocating part of their investment portfolio to Bitcoin.

On the other hand, the launch of spot bitcoin ETFs in the future can multiply the acceptance rate of this digital currency. If this rate continues from small and institutional investors worldwide, we will see a significant growth for this digital currency due to the rarity and growing network effect of Bitcoin.

In the end, it is necessary to mention again the important event of Bitcoin halving and halving of the mining reward. A decrease in the supply of Bitcoin can have a positive effect on its price. History has shown that after each halving, the value of Bitcoin has grown significantly, and the entire digital currency market has grown as a result; Therefore, Bitcoin is introduced as the first digital currency that has a good future.

Ethereum (ETH)

Ethereum is one of the most popular digital currencies that has a very high market value compared to other altcoins. The market value of this project at the time of writing this article is about 215 billion dollars. Ethereum is a first layer platform that supports smart contracts. Over the last few years, many positive changes have been made to the Ethereum protocol, which have made it more attractive.

For example, the EIP-1559 plan would cause a portion of ether transaction fees to be burned. This will help reduce the supply of this digital currency. Also, Ethereum’s consensus mechanism has changed from Proof of Work (PoW) to Proof of Stake (PoS). This update has significantly reduced the energy consumption of the Ethereum network.

Read more: Proof of work and proof of stake, concepts and differences

Reputable companies such as VanEck and Valkyrie have announced that they want to launch Ethereum futures ETFs. This is seen as a positive sign for more adoption of Ethereum in traditional markets; Therefore, it seems that Ethereum has a bright future ahead of it, and the second place of the most promising digital currencies in this article is awarded to Ether.

China Link (LINK)

Chainlink is one of the most promising digital currency projects in the future. This network connects smart contracts to real-world data in a decentralized manner. ChinaLink provides critical infrastructure for the growing Decentralized Finance, or DeFi, sector.

This project has grown significantly since its launch in 2017; So that the price of its “LINK” token went from $0.11 to more than $52 in 2021. Chainlink’s pioneering has given it a good competitive advantage as a powerful oracle. Currently, China Link cooperates with more than 1000 projects and has been able to establish its position as a leading Oracle network.

Due to the tendency of more companies to the field of DeFi and the blockchain industry, the need for new and reliable data has increased, which indicates the long-term potential of Chain Link. In addition, the founder of ChainLink has proposed a program to connect private banks with blockchain networks to transfer assets through the CCIP protocol.

Considering the central role of Chainlink in DeFi and its developments, it can be said that Chainlink is one of the most promising digital currency projects for the future.

Solana (SOL)

Solana is one of the fastest blockchain networks in the world, which has a bright future with the ability to process thousands of transactions per second. Of course, this network has faced many challenges in recent years. For example, technical problems led to a temporary shutdown of the network, and one of its main sponsors, the FTX exchange, went bankrupt.

But Solana is still active and growing despite these problems. Solana Foundation, the developer of the Solana platform, has several plans to improve the platform and has made significant investments in the Solana ecosystem.

Solana has a more diverse ecosystem than its competitors. Solana’s growing ecosystem and strategic partnerships make this platform attractive for long-term investment. Solana also has a significant share of the NFTs market. Due to the high potential of Solana, this platform is placed in the category of futuristic digital currencies.

Cardano (ADA)

Cardano is considered as an innovative proof-of-stake blockchain network. The main goal of this project is to create a secure, stable and scalable platform for decentralized applications and the field of DeFi.

According to recent statistics, the total locked value (TVL) of the Cardano network has increased by about 10% in the second quarter of 2023, and the number of daily transactions has also increased by 50% compared to before.

This growth is largely due to the launch of Djed stablecoin in January 2023. Jed is the first decentralized stablecoin on the Cardano network, which in a short period of time managed to become one of the largest DeFi protocols in the Cardano ecosystem in terms of total value locked.

In addition to the DeFi field, Cardano is moving towards greater scalability by providing second layer solutions such as the Hydra protocol. Hydra can increase the processing capacity of the Cardano network’s stake pools to thousands of transactions per second by providing simultaneous transaction processing. Assuming an increase in the number of staking pools in the Cardano network, we can expect the network’s throughput to reach millions of transactions per second in the future.

Cardano’s research-oriented approach has led to a slow but stable development process. Also, the absence of large stablecoins such as USDT and USDC in the Cardano ecosystem adds to its decentralization; Therefore, Cardano is expected to have a bright future ahead.

Polkadat (DOT)

Polkadat is another promising digital currency project introduced in this article. Along with the growing adoption rate of digital currencies, Polkadata is trying to solve two important challenges of interoperability and scalability.

The main innovation of Polkadat is its multi-chain architecture, which allows easy transfer of information and transactions between different chains. Polkadata has brought new levels of scalability to blockchain technology by introducing parallel chains (parachains).

This platform is going to introduce the Parathreads feature in the future, during which blockchains can benefit from the security of the Polkadat network without the need for a dedicated slot.

Projects such as Ethereum, Solana and Cardano, each using different technologies, are trying to create a suitable platform for decentralized applications. This competition has made Polkadat have a unique competitive advantage by focusing on providing new solutions to improve interoperability and scalability.

Polygon (MATIC)

Polygon is an innovative second layer solution to increase the speed and scalability of the Ethereum network. This platform reduces the load on the Ethereum mainnet by providing faster and safer transactions.

The future of Poligan and its digital currency “MATIC” looks promising. By supporting cross-chain interoperability, Polygon provides a seamless and convenient user experience.

The Paligan development team is constantly working on improving this project and looking for innovations to enhance its capabilities. The focus on innovation, along with a clear roadmap, has created a high potential for Polygan’s widespread adoption.

The Paligan team also cares about feedback from its user community and strives to meet their needs. This collaborative approach strengthens users’ sense of ownership. Also, Paligan seeks to establish cooperation with other projects to provide innovative solutions through synergy.

Recently, Google Cloud has also become one of the validators of Polygan network. This reflects Polygon’s growing adoption among major technology companies. It looks like Paligan is on its way to becoming one of the key players in the digital currency space.

Frequently asked questions