The crypto market has crashed several times over the past few years. A prolonged sell-off between January 2018 and December 2018 caused the market to drop almost 90%. Then, after hitting a new high of $2.5 trillion in May 2021, the market fell more than 50% in July. It then recovered and peaked at around $3 trillion in November 2021, before being halved again.
Today, the crypto market is worth $2 trillion, which means it’s still down 33% from its peak. But if you can handle the kind of volatility I just described, now looks like a good time to buy. Every past downturn has eventually ended with the market soaring to new highs, and there’s no reason to believe this time is any different.
With that in mind, here are two cryptocurrencies that could make you rich over the next decade.
Bitcoin: a price target of 1 million dollars
Bitcoin ( BTC 2.41% ) was the first cryptocurrency to gain widespread adoption, and although it debuted over a decade ago, it remains the most popular. Except for a few blips – like Dogecoin in January 2021 – Bitcoin has always been ranked as the most mentioned cryptocurrency on Twitter. More importantly, with a market cap of $775 billion, it accounts for nearly 40% of the total crypto market value.
What is behind this popularity? Bitcoin was the early mover in the cryptocurrency space. In fact, this advantage has literally made bitcoin synonymous with cryptocurrency in general, and the explosion in the crypto market has served as a powerful tailwind. Bitcoin has been adapted by fintechs such as Block and PayPalin addition to companies like You’re here and MicroStrategy put cryptocurrency on their balance sheets. Moreover, bullish comments from asset managers like Ark Invest CEO Cathie Wood have also contributed to its popularity. Wood recently reiterated his belief that Bitcoin could hit $1 million by 2030, a 23x gain for investors over the next eight years.
Additionally, the collective hash rate of all miners on the Bitcoin network is an order of magnitude higher than any other blockchain, which means Bitcoin is much more secure. Even better, Bitcoin is a finite asset. Its source code limits it to 21 million pieces, and this rarity has made it valuable. Why? Any student of economics can tell you that the price of an asset depends on supply and demand. So, when the demand for a finite asset increases, its price also increases.
Going forward, investors have reason to believe Bitcoin’s popularity will persist. More and more institutional asset managers – a cohort with over $100 trillion in assets at their disposal – are buying cryptocurrency, and Bitcoin is the most popular digital asset among institutional investors. This momentum is expected to keep the price of Bitcoin on the rise for the next decade.
Chainlink: a connection between blockchains and real-world systems
Smart contracts are self-executing computer programs, and they form the core of decentralized applications (dApps) and decentralized financial services (DeFi). However, the actual usefulness of smart contracts is limited because they exist on a blockchain, a decentralized network that cannot communicate with external systems. Chain link ( LINK 3.05% ) solves this problem, allowing real-world data to be brought onto any blockchain without compromising its decentralized nature.
Specifically, Chainlink is a decentralized network of oracles powered by the LINK token. Oracle Node Operators – the people who run the hardware and software – must stake LINK tokens to participate. When a smart contract requests data from the platform, node operators bid for the job and the Chainlink protocol selects the appropriate number of oracles. Once the data is collected, the protocol reconciles the information to ensure an accurate result, and node operators are paid in LINK.
Here’s an example: Consider a DeFi marketplace selling tokenized real-world assets, such as real estate or collectibles. The price of these assets is subject to change over time, so it cannot be coded into the smart contract. Instead, multiple Chainlink oracles would obtain price information at the time of the proposed sale – likely from multiple different appraisers – and this data would be aggregated and reconciled by the Chainlink protocol to ensure accuracy, then added to the smart contract.
Of particular note, LINK is a finite asset, capped at 1 billion tokens. In other words, as more and more smart contracts are architected that require real-world data, the demand for Chainlink oracles is expected to increase. In turn, this should create demand for the LINK token, sending its price higher. Of course, Chainlink is not the only oracle network in the blockchain industry, but it is by far the most popular. That’s why this cryptocurrency looks like a smart buy.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging 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 wealthier.