Investing in cryptocurrencies is ideal for those with a high-risk profile. While cryptocurrencies have created astonishing wealth in the past decade, it remains a highly volatile asset class due to the lack of regulation and the possibility of price manipulation.
Some investors see digital tokens as a disruptive force that can replace legacy financial institutions and payment platforms while for others it is a bubble waiting to burst. Since the start of 2020, the crypto market has grown by 500% to be valued at US$1.7 trillion and it’s still down almost 50% from all-time highs.
Given the global equity market is worth US$120 trillion, cryptocurrencies have enough room to drive investor wealth higher in the upcoming decade. However, with more than 17,000 cryptocurrencies in circulation, it’s quite difficult to identify long-term winners. But if you have a small amount of capital available and want to gain exposure to these digital assets, you could consider these three cryptocurrencies that I believe will lead the market in 2030.
Bitcoin (CRYPTO:BTC) was the first-ever cryptocurrency to be launched back in 2009. The BTC token has gained over 3,000% in the last five years and is up a staggering 36,000% since May 2013. As the total number of BTC tokens in circulation is limited to 21 million, several people view Bitcoin as a hedge against inflation.
Bitcoin is currently valued at a market cap of US$728 billion. Comparatively, the total value of gold owned is forecast at US$2.6 trillion. Leading investment bank Goldman Sachs believes, due to the widespread adoption of Bitcoin, a portion of the capital invested in gold will shift toward BTC and other tokens over time.
Several publicly listed companies already hold Bitcoin on their balance sheets and it’s also the most widely accepted digital asset by merchants globally. Around 40 million accounts hold Bitcoin and this figure has increased at an annual rate of 21% since 2022.
The second-largest cryptocurrency in the world, Ethereum (CRYPTO:ETH), is valued at a market cap of US$315.9 billion. Its blockchain was among the first to support self-executing programs also called smart contracts which increased the popularity of the Ethereum network.
Basically a programmable blockchain, Ethereum’s network has evolved to accommodate a wide array of dApps or decentralized applications and DeFi (decentralized finance) services.
Ethereum has already onboarded close to 2,900 dApps that attract thousands of users each day. Further, investors have plowed US$118 billion into DeFi products operating on Ethereum, which accounts for close to 60% of all DeFi-related investments.
Right now, Ethereum is wrestling with scalability issues and high transaction fees. However, the shift to Ethereum 2.0 is expected to increase the throughput for Ethereum from 14 transactions per second to 100,000 transactions per second.
Solana (CRYPTO:SOL) is one of the most popular cryptocurrencies in the world and its digital token surged by 10,000% in 2021. Now, it’s the eighth-largest cryptocurrency in the world, valued at a market cap of US$28 billion.
The number of developers that are part of the Solana ecosystem increased five-fold in the last year, allowing the blockchain network to expand its suite of applications. Unlike Ethereum, the Solana blockchain network is scalable and low cost, making it perfect for micro-transactions. Developers can also create and execute smart contracts on Solana, which should increase demand for the SOL token exponentially going forward.