3 Top Cryptocurrencies to Buy in May

Cryptocurrencies such as Ethereum, Tron, and Tezos might outperform the broader market in the long term.

| More on:
crypto, chart, stocks

Image source: Getty Images

If you are looking to buy cryptocurrencies that can stand the test of time, investing in Ethereum (CRYPTO:ETH), Tron (CRYPTO:TRX), and Tezos (CRYPTO:XTZ) makes perfect sense. Let’s see why these three digital assets are well poised to deliver outsized gains to long-term investors.

Ethereum

Valued at a market cap of US$339 billion, Ethereum is the second-largest cryptocurrency in the world. Ethereum enjoys a first-mover advantage, as it was the first blockchain network to support decentralized applications, or dApps, which are self-executing smart contracts.

The Ethereum network leads the dApp category that includes DeFi (decentralized finance), as the blockchain accounts for 54% of the market with US$117 billion in TVL, or total value locked.

Ethereum also hosts OpenSea, which is the largest marketplace for non-fungible tokens with a 24-hour trading volume of US$75 million. Further, Ethereum developers are working on a network upgrade, where the blockchain will now validate transactions using a proof-of-stake mechanism.

Here, validators will verify transactions by staking their coins instead of solving complex puzzles. The shift towards a PoS mechanism will allow Ethereum to increase its scale and reduce costs related to transactions by a wide margin.

Tezos

Valued at US$2.5 billion by market cap, Tezos has more than doubled investor wealth since the start of 2020. Similar to Ethereum, the Tezos network also supports the execution of smart contracts. The people who own the XTZ token can vote on protocol upgrades, making it inclusive in nature.

Tezos is well poised to benefit from the widespread adoption of its blockchain network. In Q4 of 2020, Tezos disclosed that Societe Generale plans to use its network to create a digital currency in partnership with a central bank.

Further, cryptocurrency exchanges, including Coinbase and Binance support the staking of Tezos where users can earn a passive-income stream based on the amount of XTZ tokens they hold.

Last week, Tezos announced its blockchain network can now execute 1,000 transactions per second. Comparatively, Ethereum’s network can execute around 30 transactions per second.

Due to its smaller size, the risks associated with investing in Tezos is higher. However, it may become the preferred network of choice for those looking to develop financial products on a blockchain.

Tron

The final cryptocurrency on my list is Tron, which is valued at US$6.3 billion, by market cap. In the last three years, the TRX token has more than tripled in market value. The Tron ecosystem has close to 90 million on-chain users and has executed over three billion transactions to date. In Q4 of 2021, the Tron blockchain was completely decentralized and restructured into the Tron DAO (decentralized autonomous organization).

Last year, Tron launched the USDD on its blockchain, which is a stablecoin pegged to the U.S. dollar. The USDD protocol will keep USDD stable at 1:1 against the USD on the back of a robust algorithm framework.

Additionally, Tron’s blockchain has the capacity to execute 2,000 transactions per second, as it aims to create a decentralized environment for content creators.

Investors should understand that investing in cryptocurrencies carries significant risks, and they should invest as much as they can afford to lose in this disruptive asset class.

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool owns and recommends Ethereum and Tezos. The Motley Fool recommends Coinbase Global, Inc.

More on Investing

Canada national flag waving in wind on clear day
Tech Stocks

Trump Trade: Canadian Stocks to Watch

With Trump returning to the presidency, there are some sectors that could boom in Canada, and others to watch. But…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Investing

Is Canadian National Railway Worth Buying for its 2.2% Dividend Yield?

Let's dive into whether Canadian National Railway (TSX:CNR) is a top buy for long-term investors at this point in the…

Read more »

nuclear power plant
Energy Stocks

Is Cameco Stock Still a Buy?

Cameco stock recently reported earnings that showed the Westinghouse investment is creating some major costs. But that could change.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

Start line on the highway
Investing

2 No-Brainer Growth Stocks to Buy Now With $5,000 and Hold Long Term

Market conditions today are ideal for growth investing, and two rising stocks are no-brainer buys in November.

Read more »