Investors are becoming more bullish on cryptocurrency. In June 2021 a survey showed that 10% of U.S. adults were willing to invest in crypto assets, according to eMarketer. But that figure has more than doubled since then, reaching 24% in December 2021. Interestingly, the same report suggests that U.S. investors are less interested in traditional stocks, as the percentage of U.S. adults willing to invest in equity markets fell from 90% to 76% over the same period.
Of course, that’s great news for crypto investors, because rising demand should translate into higher prices. Moreover, in light of the latest volatility — the crypto market currently sits more than a third below its all-time high — now looks like a great time to add a few cryptocurrencies to your portfolio.
Here are two ideas to get you started.
1. Internet Computer
The Internet Computer (CRYPTO:ICP) is a programmable blockchain comprised of numerous servers running across a network of independent data centers. Swiss non-profit group DFINITY is the organization behind the project; its goal is to rebuild the internet as a decentralized platform. Why? A significant portion of the internet is currently controlled by a handful of tech giants — think Amazon, Alphabet, and Microsoft. That means those companies have access to and control over a tremendous amount of user data, and they have censorship power over content hosted on their infrastructure.
By comparison, the Internet Computer allows developers to deploy smart contracts on a decentralized network of servers, and those smart contracts can power a range of technologies, including cloud services, enterprise software, social platforms, and websites. And because those products exist beyond the control of any single corporate entity, user data remains private and content can never be censored.
Of particular note, the Internet Computer is fast. A recent test clocked the network at 11,500 transactions per second (TPS), and those transactions were finalized in less than two seconds. Of course, blockchains like Solana may offer higher throughput (i.e. 50,000 TPS), but the Internet Computer allows users to store data at a fraction of what it would cost on Solana, and transaction fees on the network are significantly cheaper than most other blockchains.
In short, the Internet Computer is a highly scalable platform with a decentralized architecture. That value proposition is sure to catch the eye of developers, but similar to traditional cloud infrastructure services, those developers must pay to use the platform. Specifically, they pay for computer resources consumed by their products with the ICP token. In other words, as the Internet Computer becomes more popular, demand for the ICP token should rise, sending its price higher.
Charlie Lee, the former director of engineering at Coinbase, the biggest crypto exchange, created Litecoin (CRYPTO:LTC) in 2011. At the time, it was meant to supplement the Bitcoin economy — in fact, Lee actually minted Litecoin from Bitcoin’s source code, though he made a few changes. Most importantly, Litecoin is four times more abundant, as its supply is limited to 84 million tokens, whereas Bitcoin’s supply is capped at 21 million tokens.
Just as Bitcoin has earned a reputation as digital gold, Litecoin is often styled as digital silver, and that analogy makes it easy to understand the investment thesis. Basic economics tell us that an asset’s price will rise when demand outpaces supply. And investors have good reason to believe demand for Litecoin will rise in the coming years.
A recent study from Fidelity suggests that institutional investors are increasingly bullish on cryptocurrency. In fact, 71% of those big money managers plan to invest in digital assets in the future, up from 59% last year. Of course, Bitcoin and Ethereum rank as the most widely held cryptocurrencies among this cohort, but Litecoin ranks No. 3. That may come as a surprise to many crypto enthusiasts, because Litecoin is often overlooked in favor of more trendy blockchain projects.
In the future, as institutional investors continue to diversify into digital assets, Litecoin’s popularity should translate into demand, driving its price higher. That’s why this cryptocurrency looks like a smart buy.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. 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.