Cryptocurrency is a type of investment that still receives a mixed-bag reaction. From confusion by those who don’t understand it, to eye-rolls by those who consider it to be futile in its purpose.
However, despite its rocky relationship with the investment world and the public in general, it’s still here. In fact, it’s thriving and more profitable than ever before.
The market size for cryptocurrency is expected to reach $1087.7 million by 2026. Considering the investment type has only been around for a short time - the first, Bitcoin was created in 2009 - it’s come a long way.
Is it worth investing in though as an investor? Well, depending on what you know about crypto, you could stand to lose a lot of money or you could gain a fortune if you’re lucky. There are advantages to investing in cryptocurrencies and like all investments, it has its drawbacks.
With that in mind, why invest in cryptocurrency, and if so, which ones stand to be the most profitable to invest in for 2023? In this guide, you’ll get a better understanding of what cryptocurrency is and how it may benefit the average investor this year and beyond.
The rising popularity of cryptocurrencies
It’s pretty evident from its conception in 2009, that it hasn’t had the warmest of welcomes when it comes to its popularity on the market. Created by Satoshi Nakamoto, responsible for the first Bitcoin, it provided a new type of currency that is completely digital.
Over the years, there have been many individuals and organizations who’ve created new cryptocurrencies and as a result, there are currently 21,844 total cryptocurrencies in existence. Although not all of these are active, it goes to show how much development and change has happened over the past 13 years.
Why invest in cryptocurrency
Why invest? Depending on your investment ventures so far, you may be a traditionalist when it comes to investment types. Whether that’s the stock exchange or the real estate market, venturing into unknown territory shouldn’t be too much of a difficult jump for investors to make.
After all, there are plenty of investment types aside from cryptocurrencies that carry risk and high volatility. Here are a few reasons why you should consider investing in cryptocurrency for 2023.
It’s a long-term investment opportunity
Some investment opportunities are short-term and others are long-term. Cryptocurrency is one of those long-term investments that while not guaranteed to make money, could make a sizeable amount of profit.
Not every investor prefers a long-term investment but if they choose the right crypto, even a small amount like $1,000 could go up exponentially in value.
Diversifies your portfolio
If you’re an investor already, then you’ll be well aware of the importance of diversifying your portfolio. The more you spread your money, the better. It helps to mitigate risk so that if one of the investments loses money, you’re likely to have another handful that is making it back.
With cryptocurrency, as a long-term investment, it can exist alongside other long-term or short-term opportunities currently in place.
Easy to purchase
One of the benefits of investing in cryptocurrency is that it’s very easy to purchase. When it comes to accessibility, it’s not something you need thousands of dollars for. In fact, you are able to purchase crypto with just a few dollars in your bank.
As well as being accessible financially, there are also multiple ways in which you buy cryptocurrency. Whether you buy BTC with PayPal or via wire transfer, this diversity in payment options is appealing to more investors in general.
One of the biggest benefits of investing in crypto is its accessibility. For many investors, they’re drawn to its availability in the market. Including speedy transaction processes and around-the-clock trading, there are no restrictions compared to other investments.
5 most profitable cryptocurrencies to invest in 2023
The perks of cryptocurrency are worthwhile for investors in all financial positions and experiences. Which are the most profitable as of 2023?
The profitability of cryptocurrencies varies from year to year. Some cryptocurrencies may peak and dive in a short space and time, while others may gradually
1. Bitcoin (BTC)
It makes sense that the OG of cryptocurrencies, Bitcoin (BTC) still remains one of the most profitable cryptocurrencies for 2023.
It has a great track record when it comes to its performance over the years. According to CoinMarketCap, the market price stands at around $16,728.71 per coin.
As a result of its growth and continued success, any investment made now will have a similar growth pattern. Of course, no investment is ever guaranteed but based on its performance history, it’s one to pick for those taking a dip into this type of currency.
2. Ethereum (ETH)
Ethereum is another cryptocurrency that has a lot of popularity and many will know of it even if they don’t invest in crypto yet.
A lot of development has been made within this digital currency and it’s considered to be one of the best for having investment in.
Possibly one of the main reasons that Ethereum has risen over the years is the DeFi (Decentralized Finance) system. DeFi removes third parties from financial transactions. Unlike traditional currencies, investors are able to take advantage of a currency that isn’t controlled by centralized institutions.
It’s also exciting to see a cryptocurrency that is evolving not just in its infrastructure but the regulations that incorporate it.
3. Dogecoin (DOGE)
Dogecoin has been kicking around since 2013 and has continued to perform fairly well on the market. With a current market price of $0.0779, it’s known for being one of Elon Musk’s favorite cryptocurrencies.
With many prospective cryptocurrencies taking investors' interest in 2023, DOGE is one that will definitely thrive in the new year.
Despite this though, it has experienced a number of crashes. With that being said, it’s considered a slightly higher-risk crypto to invest in. It may be worth waiting for a crash before investing.
4. Binance USD (BUSD)
As a 1:1 USD-backed cryptocurrency, it’s deemed one of the safest due to its backing by a traditional, stable currency.
It’s a currency that is used in many different ways and as a platform, Binance in general offers lower fees which makes it more attractive for investors. The platform currently has around $76 billion in trades, so it’s certainly a popular one.
Binance USD has become one of the hottest cryptocurrencies and is worth spending some money on to diversify your crypto portfolio.
5. Algorand (ALGO)
Alogrand is one of the first - if not the first - green solutions when it comes to cryptocurrency. Its mission is to create the number one carbon-neutral blockchain network.
Within this carbon-conscious society we now live in, it seems Algorand may have come at the right time. To be invested in a carbon-friendly cryptocurrency is worthwhile and it should be one that an investor chooses to bolster up their portfolio.
Tips to make the most out of cryptocurrency investments
Now with the knowledge of the most profitable cryptocurrencies, how do you make the most out of your investments?
Put a strategy in place
As with any investment, you should do research and garner advice from the experts but at the end of the day, your decision matters. Put a strategy in place that sets parameters for the decisions you make.
Be critical in your approach when purchasing cryptocurrency and take a look at each platform carefully before investing.
Diversify but don’t spread it too thin
Your investment portfolio is important to diversify. However, diversifying your portfolio should be something you proceed with caution. While investing in just one single cryptocurrency isn’t the wisest decision for growing your portfolio, investing in too many may sabotage your efforts.
Try to spread out your money accordingly to how much you have to invest, being careful not to spread it too thin. Do your research and start off with a few investments at a time.
Manage the risk
Managing the risk is important with any investment which is why it’s worth exploring the range of low to high-risk cryptocurrencies on offer. Ideally, having a number of investments across the board is going to help mitigate those risks that come with crypto.
Be in it for the long-term
If you’re open to long-term investments then cryptocurrency is definitely for you. As an investor, it’s good to have a diverse range of short-term and long-term investments. This too helps with the mitigation of risk. Be ready to invest your money into these digital currencies in the long run.
Take a leap and invest in digital currency for 2023
Digital currency like cryptocurrency is something that should be invested in for 2023. Whether you have no knowledge of cryptocurrency or you’ve been considering it for a while, take a leap and invest.
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