2 Crypto Assets to Buy for the Long Haul

When you are looking for cryptocurrencies that you can potentially hold for years to come, you should look for more than just past performance.

crypto, chart, stocks

Image source: Getty Images

When it comes to crypto assets, trading is almost as famous as long-term investing — probably even more so. The main reason is the volatility of the crypto assets, which makes trading more exhilarating, even practical. But that doesn’t negate the fact that the long-term investment approach cannot be applied to crypto assets.

However, you cannot assess the long-term crypto investments quite the same way you assess stocks. The speculative nature of cryptocurrencies and the fact there is little tangible behind those assets make them a little difficult to comprehend. But even that statement is not valid for all crypto assets. Mainstream cryptos like Ethereum (CRYPTO:ETH) have billions of mining assets tied to them and billions more in secondary markets like NFTs.

That’s an important perspective to have when you are choosing crypto investments for the long term.

The second-largest cryptocurrency

Ethereum is almost as well known as Bitcoin, and it’s one of the few cryptocurrencies that are being mined as vigorously, even by publicly traded miners. But it’s well known for much more than just a volatile investment asset. It garnered a significant segment of the smart contracts market early on, and this is one use of blockchain that might outlive the cryptocurrency hype.

Ethereum is also widely used to create Decentralized Finance (or DeFi) applications, which is tied to the true purpose of the cryptocurrencies — financial freedom and accessibility to everyone, without going through financial institutions (conventional banks). Ethereum also controls the bulk of the NFT market, which is blowing up right now, and the potential of similar derivative markets in the future is quite bright.

With all these uses, crypto is likely to stay relevant for decades to come. So, buy the dip and hold on to it.

An Ethereum alternative

Due to its versatility, Ethereum has triggered the creation of a lot of similar blockchain and their native cryptocurrencies, one of which is Cardano (CRYPTO:ADA). It’s giving Ethereum serious competition in many avenues, including smart contracts, where the blockchain aims to become even more accessible and user friendly than Ethereum.

It’s also being used to create DeFi apps, and there is a high probability that it may get ahead given enough time, beating Ethereum’s early bird advantage. It’s also different from Ethereum in two significant ways: it has a different consensus mechanism (proof of stake), and it has two different layers: one dedicated to intelligent contracts and one to transactions, so one doesn’t weigh down the other.

Cardano is currently trading at a 68% discount from its peak, and from its trajectory, it seems that the crypto might fall further for a while before recovering. Even if it just reaches the current peak, it would grow your capital by over 300% if you buy now. And if it goes beyond that point, your capital appreciation can be phenomenal, much higher than the relatively heavier Ethereum and much heavier Bitcoin.

Foolish takeaway

If you are unsure about crypto assets themselves, many crypto-oriented tech stocks can be healthy alternatives. Many of them offer relatively broader exposures, and even the direct crypto miners can offer more growth than the underlying cryptos can.

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 Ethereum.

More on Investing

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

money goes up and down in balance
Investing

Unveiled: 2 Must-Watch Stocks for Your TFSA Before 2025

Value-conscious TFSA investors should consider Bank of Nova Scotia (TSX:BNS) and another great dividend pick.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »

how to save money
Dividend Stocks

Got $1,000? The 3 Best Canadian Stocks to Buy Right Now

If you're looking for some cash flow from your $1,000 investment, these are the ideal investments to make.

Read more »

Data center servers IT workers
Tech Stocks

Better Buy: Shopify Stock or Constellation Software?

Let's dive into whether Shopify (TSX:SHOP) or Constellation Software (TSX:CSU) are the better options for growth investors in this current…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Investing

Fortis Rose 11% in 90 Days, and it’s Still a Good Stock to Buy Now

Here's why Fortis (TSX:FTS) is among the top dividend stocks I think long-term investors want to own in this current…

Read more »