Bitcoin’s 366% growth over the last 12 months is astonishing when stacked against stocks like Tesla (up 202% over one year) or Apple (up 37%).
All of the above are offered as standalone cryptocurrencies by crypto platform Revix (which also offers investors an opportunity to acquire cryptos as part of a ‘bundled’ investment, such as the Top 10 Bundle – which spreads your investment equally across the top 10 cryptos as measured by market cap).
This article looks at the case for investing in these cryptocurrencies as standalone investments.
First of all, it should be pointed out that the above chart shows some truly remarkable 12-month returns, but these are historical returns and there is no guarantee that this rate of gain will continue.
But a strong case can be made for including these in a diversified crypto portfolio, according to Brett Hope Robertson, investment analyst at Revix.
“What we are witnessing is something that only rarely occurs in the field of investments – the emergence of an entirely new asset class. Much like the emergence of the internet, blockchain technologies are adapting [to] the way we interact in our daily lives and we are still some way away from mass adoption,” he says.
“These adoption cycles can be extremely fast – before you know it, the technology is part of your everyday life. With this rapid adoption comes the opportunity to gain from the winners in this race, but there is also a risk that 95% of these will lose. Therefore, an educated and diversified approach is always advised when investing in new technologies.”
Here is a brief explanation of the six altcoins, their role and the technology behind them:
6th – Uniswap (+1 041%)
Uniswap is the world’s largest decentralised exchange and its UNI token provides exposure to the emerging world of decentralised finance (DeFi).
Uniswap’s digital exchange is designed to make it easy to exchange Ethereum (ERC-20) tokens. Think of it as the decentralised version of the New York Stock Exchange. The difference is that Uniswap has no one central operator or administrator, making it fully decentralised.
Unlike most exchanges, which are designed to take fees, Uniswap is designed to function as a public good – a tool for the community to trade tokens without intermediaries. Also, unlike most exchanges, which match buyers and sellers to determine prices and execute trades, Uniswap uses a simple math equation and pools of tokens and ETH to do the same job.
UNI is the token powering Uniswap – anyone holding the cryptocurrency can participate in the protocol’s governance.
5th – Ethereum (+1 060%)
Ethereum is a decentralised open-source blockchain system that features its own cryptocurrency, Ether (ETH). ETH works as a platform for numerous other cryptocurrencies, as well as for the execution of decentralised smart contracts that allow users to transfer, lend, borrow and earn interest on their cryptos – all without any human intervention (which is why they are called ‘smart contracts’).
Ethereum’s goal is to become a global platform for decentralised applications, allowing users from all over the world to write and run software that is resistant to censorship, downtime and fraud.
“ETH is ideal for crypto beginners and veterans alike as it’s one of the largest, most tested and reputable cryptocurrencies around,” says Hope Robertson.
4th – Polkadot (+1 200%)
Polkadot (DOT) is a blockchain designed to join the dots with all other blockchain networks. It’s commonly referred to as a multi-chain blockchain network because it can join different networks together.
Polkadot essentially provides the infrastructure that other blockchains can use to interact with one another securely. Polkadot has been designed with one purpose in mind: to unite an entire network of blockchains – from Bitcoin to Ethereum and everything in between.
This enables developers to customise the specific features they want, giving them flexibility to opt into those parts of the Polkadot network that suit their project and stay away from those that don’t.
“As things stand, developers have to choose which blockchain to build their applications on. Each chain is unique and has its own strengths and weaknesses that developers have to weigh up when deciding where to develop. Therefore many blockchains make different trade-offs to support specific features and use cases, and as blockchain specialisation increases, the need to transact between them will only increase over time,” says Hope Robertson.
3rd – Binance Coin (+1 860%)
Binance Coin (BNB) is the native cryptocurrency of the Binance network.
Binance is one of the largest cryptocurrency exchanges globally and has its own blockchain, the Binance Smart Chain.
BNB was created as a utility token for the Binance exchange. BNB’s original use case was to offer Binance users discounted trading fees when paying in BNB. Since then though, BNB has become a whole lot more useful, allowing holders access to Binance features including trading, investing, earning interest, lending, borrowing and much more.
The Binance Smart Chain offers similar features to Ethereum, Cardano and Solana in that it seeks to enable an ecosystem of DApps (decentralised apps) to operate on top of its network.
2nd – Cardano (+2 038%)
Cardano (ADA) is a third-generation blockchain which offers smart contract functionality and uses ADA as its native cryptocurrency. Cardano offers similar features to Ethereum with the advantages of handling a greater number of transactions per second, operating at a lower cost and with greater energy efficiency.
ADA holders use their coins to vote on improvements or amendments to the Cardano blockchain, thus engaging in its development.
1st – Solana (+13 878%)
Solana (SOL) is a blockchain network that seeks to develop an ecosystem of cryptocurrency-powered products and services. It’s been labelled an ‘Ethereum-killer’ by some because it set out to rival Ethereum, but with faster transaction settlement times, lower fees and a programming capability that focuses on flexibility.
Solana can currently handle over 50 000 transactions per second, more than Ethereum and Bitcoin combined, and at a fraction of the cost.
Developers can also write and launch customisable applications known as DApps in multiple programming languages on the Solana blockchain.
Solana’s native cryptocurrency, SOL, is used to pay for executing custom programmes and sending transactions.
There is a possibility that ETH and SOL (as well as Cardano and Polkadot) will exist alongside each other in this evolving universe of DeFi, which is competing with banks, insurers and other traditional players in the finance space.
“A good case can be made for owning some of these cryptos as standalones, since they all feature in the top 10 cryptocurrencies as measured by market cap,” says Hope Robertson. “As always, care must be taken to diversify one’s portfolio to avoid over-concentration to just a few cryptocurrencies.”