2 Crypto Assets for 2x Growth Potential

For crypto, the 10x and 20x growth phases are likely to become scarce, and more realistic ones like 2x growth will become the norm.

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cryptocurrency, crypto, blockchain

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For almost all investment assets, risk and growth should be in healthy proportion to one another. If you are willing to take more than the usual risk, you should also be rewarded with more than the usual return potential.

That’s why the risk associated with crypto tokens is justified, and that’s why two-times growth in less than a year, which would seem remarkable in more conventional assets, looks rather weak in association with crypto assets.

However, what many investors need to understand is that the days when crypto was considered a “niche” investment and most cryptocurrencies were trading for rock-bottom prices are over. Even at their worst, few cryptocurrencies (if any) have fallen to their 2020 levels. So it might be a smart idea to start adjusting the growth expectations to more realistic levels (like two-times growth) and take advantage of crypto’s rapid growth potential.

A “DeFi” crypto

Terra (CRYPTO:LUNA) is technically the name of the blockchain that is able to host multiple stable coins (cryptos whose price is pegged to a different asset), and LUNA is its native token. This crypto is closer to Ethereum than Bitcoin, thanks to its decentralized finance (DeFi) applications. The concept behind it is that everyone with an internet connection can send, receive, and even borrow funds.

Like most other cryptos, LUNA reached its peak in late-2021, and it has been going down ever since. Its price grew to over US$100 when it peaked and at its worst fell more than 50% from the peak. It has started to recover from that point, and even if that’s the turning point and you buy now, you may be able to double your capital in this cryptocurrency.

However, if it’s just a temporary reprieve and the crypto is set to fall down more, you may be able to achieve more pronounced growth by buying the full dip.

A secondary scaling solution

Where Terra is a blockchain comparable to Ethereum, Polygon (CRYPTO:MATIC) is a “sidechain” on Ethereum. MATIC is the native cryptocurrency of Polygon. Thanks to its popularity and its smart contract, Ethereum is used for a wide variety of things. But too much activity taking place and assets and money changing hands over Ethereum has made transaction “verifications” quite expensive on Ethereum, and it changes over time.

One solution to this problem is Polygon, which is a sidechain – a blockchain network layered over an original, larger blockchain network. That’s what Polygon is to Ethereum, but much faster and cheaper than the underlying one.

Despite this correlation, Polygon’s value doesn’t exactly mimic Ethereum’s, but it will grow if the underlying crypto grows. At its current price, it wouldn’t have much difficulty growing your capital by two times if it reached its previous peak.

Foolish takeaway

Whether you are investing in crypto assets directly or tech stocks tied directly to cryptocurrencies, now would be a good time. Most cryptos are currently discounted, and tech stocks are discounted in general. The twin factor, especially if the slump stretches for a few more weeks, will make many otherwise expensive/overpriced assets very attractive investments.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin and Terra.

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