Crypto Recovers Slowly: 2 Cryptos to Buy Now

After a fantastic January and February, the crypto market has retreated since the beginning of March. Even with the recent decline, the collective market cap for crypto is still up around 20% in 2023, and optimists are hopeful that the strong start to the year could signal an end to a brutal bear market that has gripped crypto since late 2021.

The exact timing of when this bear market will end is uncertain, but eventually this crypto winter will probably thaw just like in the past. In preparation for a potential crypto spring, there are two cryptocurrencies to buy today.

What these two may lack in originality, they make up for in their track record of innovation, history of weathering multiple bear markets, and the continued ability to disrupt the status quo. For these reasons, and many others, Bitcoin (BTC 7.50%) and Ethereum (ETH 6.73%) are recognized as the best assets in their class.

The original cryptocurrency

For Bitcoin, one of the main reasons it is the most valuable cryptocurrency is simply because it was the first, dating back to 2009. Although this lead has waned in importance in recent years as other cryptocurrencies have gained market share, Bitcoin has held onto the top because of its inherent characteristics, which make it an attractive long-term investment. Over the past five years, it has returned more than 140%, and over the decade, it has achieved a return of 44,300%.

For many, Bitcoin is seen as an asset that preserves wealth. Ingrained in Bitcoin’s code is a feature that ensures it will become increasingly scarce, because only 21 million bitcoins will ever enter circulation. In addition, the frequency of new coin creation decreases. Today, there are approximately 19.25 million coins in circulation, and the remaining 1.75 million will enter the supply gradually until 2140, when the last bitcoin is mined.

In addition to being completely decentralized and highly secure, Bitcoin does something that fiat currencies have failed to do – protect purchasing power. Unlike currencies such as the US dollar, British pound, Japanese yen and many others, Bitcoin’s supply rate is growing extremely slowly. The central banks that control fiat currencies are able to inflate the supply in hopes of achieving a variety of goals. Whether the central banks achieve these goals is a topic for another day, but what inevitably happens through this process is a reduction in purchasing power. Bitcoin aims to solve this by offering holders a way to increase their purchasing power over time as supply growth slows and demand increases.

A groundbreaking invention

Although Bitcoin is seen by many as a store of value, Ethereum derives its value from its seemingly infinite number of use cases. When Ethereum came into being in 2015, it completely changed the crypto economy. With the arrival of Ethereum, developers could now use computer code to cause specific actions to take place when certain criteria were met. Known as a smart contract, this code essentially turned Ethereum into programmable internet money that didn’t require any person or entity to monitor transactions.

This innovation laid the foundation for an entirely new and lucrative sector – decentralized finance (DeFi). With these fancy new smart contracts, developers can optimize existing traditional financial processes, such as lending, because there is no need for a bank. Terms – such as the loan’s value, interest rate and duration – are all written into the smart contract. Beyond finance, smart contracts have the potential to revolutionize industries such as real estate, supply chain management and healthcare. As a result of this long-term potential, Ethereum has provided investors with generous returns. Despite being newer than Bitcoin, Ethereum has actually outperformed the original cryptocurrency over the past five years and is up more than 180%.

All you need are these two

Although Bitcoin and Ethereum differ in the way they are used, both serve a unique purpose. As a result, they make up a majority of the value of the cryptocurrency asset class – roughly 60%, with Bitcoin at 41% and Ethereum at 19%.

Because Bitcoin and Ethereum are so big, when they go, so does the rest of the market. For this reason, they offer investors the easiest and most effective way to prepare for crypto’s recovery. Instead of trying to find an obscure, unproven cryptocurrency, keep it simple. Investing in Bitcoin and Ethereum has treated investors well in recent years and is likely to do so for years to come.