Why Now Is a Good Time To Buy Cryptos

Mark Hake

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Most people have heard about Bitcoin or cryptocurrencies and some may be wondering when they should consider investing in cryptos. It's actually a good time now to consider this, especially now that many cryptos are well off their highs. In addition, it is getting much easier than before to do so.

I write a lot of articles about stocks and cryptos. I have noticed that many popular cryptos are still doing quite well this year even after falling 50% or so off of their highs. To see this go to Coinmarketcap.com where the top cryptos are ranked by the size of their market capitalization.

Why Ethereum Is Good Value Now

For example, did you know that Ethereum (ETH-USD), the second-ranked cryptocurrency still has a market value of $257 billion? As of June 18, ETH-USD is still up 203% so far this year, even after falling slightly over 53% from its peak on May 10. This is substantially better than Bitcoin, which is up just 21.7% year-to-date, as of June 18. Moreover, Bitcoin has also dropped 45% from its peak in mid-May.

But there are some other reasons to buy Ethereum. Ethereum is the top smart contract blockchain now. It is used almost exclusively in the new "DeFi" development for decentralized contracts. The Wall Street Journal discussed this hugely popular movement recently and how it is helping to fuel the crypto boom.

I have written about other reasons Ethereum is popular. For example, its upcoming move to Proof-of-Stake validation will take the crypto away from mining and Proof-of-Work to process Ethereum transactions on its blockchain network. In addition, Ethereum is also going to implement a new protocol called EIP 1559 sometime in July. This will have the effect of slowly reducing its supply of Ether tokens over time. That kind of "deflationary" supply policy has worked well for Bitcoin in that it is limited to 21 million BTC tokens. Right now there are just 18.7 million outstanding, so a "squeeze" effect is helping push Bitcoin higher.

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Other Cryptos That Look Interesting

Other cryptos that look interesting are Solana (SOL-USD), VeChain (VET-USD), Polygon (MATIC-USD) and ChainLink (LINK-USD). For example, Solana crypto has made a name for itself by processing transaction in the growing Dapps (decentralized apps) market on a super-fast basis. It can provide price feed updates to market based apps on the blockchain every 400 milliseconds and can match or exceed the volume of transactions that Visa does per second. I wrote about this in a recent InvestorPlace article and its other features. Bottom line, even though SOL-USD is well off its highs it is still up about 20 times year-to-date. Its popularility is likely to push the crypto much higher the rest of the year.

Other cryptos focus on unique areas that will improve supply management (VeChain) and smart contracts (ChainLink and Polygon). Just like Ethereum, they are still up 100% to 200% year-to-date after falling 50% or so from their recent peaks. But their appeal is still growing, especially as smart contracts are taking off in this alternative crypto finance universe.

Bottom Line

The reason to buy these cryptos is mainly because they are well off of the peaks and represent good value. That is because the number of addresses and transactions involving these cryptos are continually growing. Millennials are using cryptos to earn interest, earn staking rewards, and process transactions using blockchain assets in growing numbers. This inevitably means that these cryptos will rebound over the next year.

Disclosure: Mark Hake owns stakes in a number of these cryptos, including Bitcoin, Ethereum and VeChain.

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Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks as well as cryptos, hedge funds, and private equity. He previously ran his own hedge fund, investment research firm, and acted as CFO for a fintech startup. He focuses on finding value, arbitrage, and hidden asset opportunities.

Phoenix, AZ
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