3 Cryptos to Buy and Hold During a Crypto Winter

The Federal Reserve’s intention to raise interest rates to tame inflation has caused investors to flee risky assets. And as a result, the cryptocurrency market has taken a beating over the past few months, going from a value of nearly $3 trillion to under $1 trillion as of this writing. If the digital asset market remains depressed for an extended period of time, what is known as a crypto winter, it gives long-term investors the opportunity to buy top tokens at discounted prices.

According to a team of Motley Fool contributors, Bitcoin (BTC 1.33%), Ethereum (ETH 3.75%)and Solana (SUN -3.58%) is three cryptocurrencies to buy and hold during a crypto winter.

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1. Bitcoin

RJ Fulton (Bitcoin): Not many cryptocurrencies can say they have made it through multiple crypto winters. For that reason alone, Bitcoin deserves to be part of any portfolio during extended crypto market downturns.

In addition to Bitcoin’s proven track record through crypto winters, how it performs when market conditions are more ideal is more important. Let’s look back at the last crypto winter. Most people agree that the previous crypto winter took place during 2018. Despite reaching an all-time high of just under $20,000 in December 2017, Bitcoin and many other cryptocurrencies recorded continuous lows for almost all of 2018. Finally, in late 2018, Bitcoin bottomed around $3,000.

It is at the bottom when there is most to be gained. Now, you shouldn’t try to time a market, but investors who consistently invested in Bitcoin throughout 2018 would have been extremely well positioned to make astounding returns when the bull market returned. Just for a little reference, if you had invested $1,000 in Bitcoin when the bottom occurred in December 2018, that same investment would have ended up being worth almost $20,000 assuming you held on until it reached a new all-time high in November 2021, just under of $70,000.

If you look back at other crypto winters like the one in 2014, a similar pattern emerges. After reaching a previous all-time high just shy of $1,000 in December 2013, Bitcoin went on a dry spell throughout 2014 and most of 2015. From this $1,000 mark, Bitcoin rallied all the way to just a few hundred dollars in 2015. If you had enough conviction to invest $1,000 at that low in 2015 and held until the next record high, which reached nearly $20,000 in December 2017, your investment would have turned into about $75,000.

Of course, hindsight is always 20/20, but the goal here is to show that Bitcoin is no stranger to crypto winters and consistently produces returns once downturns have passed. Conditions are about the same today as they were in previous crypto winters. Those who add Bitcoin to their portfolio when market sentiment is down have the most to gain when conditions improve. It should almost be considered a necessity for crypto investors to add more Bitcoin to their portfolio during crypto winters for this reason alone.

2. Ethereum

Neil Patel (Ethereum): I don’t get any style points for originality here, but that’s perfectly fine when you’re talking about an industry and asset class as nascent and volatile as cryptocurrencies. That said, I believe investors should take a look at Ethereum to weather a potential crypto winter.

Ethereum was launched to the public in 2015 and since then it has made a remarkable return of almost 48,000%, easily breaking S&P 500his performance at the same time. While Bitcoin was created to strictly be a global, peer-to-peer payment network, Ethereum took what a blockchain could do to the next level by introducing smart contracts. This is software that runs itself when two parties meet the necessary conditions of the contract. It’s an innovation that could pave the way for Ethereum to be the world’s decentralized computer, allowing two unknown individuals to engage and transact with each other in a way that wasn’t possible before.

Examples of some popular decentralized applications (dApps) running on Ethereum’s network include decentralized finance (DeFi) protocols and non-fungible token (NFT) marketplaces. As of July 27, the total value locked on Ethereum’s blockchain was $55.8 billion, the most of any cryptocurrency. Other dApps range from governance and identity to gaming and social. The platform’s deep developer network is a bullish signal for its ultimate success.

Throughout its history, Ethereum has operated a proof-of-work (PoW) consensus mechanism. This means that so-called miners have to use a lot of computing power to validate transactions on the blockchain. It is known to be slow, expensive and energy intensive. With upcoming merger, planned for September, Ethereum is set to move to a proof-of-stake model, which allows token holders to lock their holdings to earn the right to validate transactions. It’s meant to be faster and cheaper, and if implemented without any major hiccups, could be a massive catalyst for the price of Ether, Ethereum’s native token.

If a decade from now we live in a world where cryptocurrencies actually have valuable utility and are a bigger part of our everyday lives, then it’s hard to see Ethereum not being one of the best cryptos out there.

3. Solana

Michael Byrne (Solana): When you’re bundling up and looking to weather the elements and survive a crypto winter, it’s not the time to bet on the most speculative cryptos with flimsy use cases. In this environment, I want to increase my positions in some of the most stable projects across asset classes that have what it takes to survive the bear market and thrive when it’s over. I want to invest in cryptos that people actually use and have plenty of funds in the war chests. A good example is Solana: When a project with Solana’s tooling and user base is down nearly 80% year-to-date, there’s no reason to speculate further down the risk curve when you can buy this top crypto at a discount.

Solana now has over 1,800 validators, which shows that many people are participating in the Solana network – a good sign for the health of the Solana ecosystem. They transfer this sum to other popular blockchains such as Avalanche, Polka dotand Cosmos and trails only Ethereum in terms of proof-of-stake blockchains. According to crypto analytics firm Messari, average active unique fee payers (unique accounts that pay for one or more transactions per day) averaged around 320,000 during the second quarter of 2022.

That Solana Labs is developing its own mobile phone is a testament to the strength and depth of the development team that Solana has at its disposal. Few other cryptos have the resources to undertake a project of this scale. And because several of Solana’s managers, including co-founder Anatoly Yakovenko, come from Qualcomm, which makes chips for mobile phones, there is reason to believe that they are uniquely positioned to manage this. Solana Mobile says the phone, called Saga, will ship in early 2023.

With significant venture capital backing, Solana has plenty of capital to get through the winter and start new projects. In June, as much of the crypto market coalesced, Solana Ventures and the Solana Foundation launched a new $100 million fund to deploy capital into Web3 start-ups in South Korea, focusing on gaming, DeFi and non-fungible tokens.

Solana has the funding, the talented team behind it, and the sizable user base to not only survive, but thrive through a crypto winter.