Investing in Crypto is risky, but these 2 Cryptos have some serious staying power

The recent decline in the crypto market was shocking to say the least. In a 24-hour period, the crypto market saw $367 billion in value wiped out. During that time period, Bitcoin (BTC 0.50%) decreased by 15% and Ethereum (ETH 2.05%) decreased by 22%. It’s not just the steep drop in prices that worries crypto investors, but the speed and speed with which it occurred.

Despite their recent volatility, Bitcoin and Ethereum are the two cryptocurrencies I still feel comfortable adding to a cryptocurrency portfolio in 2024. Both cryptocurrencies have been around for more than a decade, showing serious staying power, and both have delivered investors unmatched returns. during that time period. Let’s take a closer look at what makes them special.

Bitcoin

Bitcoin continues to be the gold standard for crypto investors. In fact, Bitcoin is often referred to as “digital gold” for its unique properties that somewhat resemble those of physical gold. Most importantly, Bitcoin has a limited lifetime supply of 21 million coins. Currently, there are almost 20 million coins in circulation, so we are approaching a point where almost all of the Bitcoin that will ever be created has already been created. That gives Bitcoin enormous scarcity, and that’s why some crypto investors hoard Bitcoin the same way other investors hoard gold.

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Bitcoin, far more than any other crypto, is backed by a long-term buy-and-hold mentality. Rule no. 1 of Bitcoin is: Never sell your Bitcoin. Indeed, Bitcoin investors have popularized a number of terms (including “HODL” and “Diamond Hands”) to refer to the process of holding on to their Bitcoin regardless of what is happening around them in the crypto market.

It might be surprising to learn how many long-term Bitcoin holders there really are, considering how often we hear about short-term Bitcoin speculators. As of mid-June, nearly 14 million bitcoins were held by long-term investors, according to Glassnode data. This is really an underrated aspect of Bitcoin and something that gives the crypto enormous staying power. As institutional buyers now invest in Bitcoin, it should help reinforce the buy-and-hold mentality that has developed among smaller retail investors.

Ultimately, it is impossible to ignore Bitcoin’s long-term resilience. According to Ark Invest’s Cathie Wood, there have been at least five different dips when Bitcoin’s price has fallen by 77% or more. Guess what? The price of Bitcoin has bounced back every time. After Bitcoin’s price dropped in November 2021, for example, it rebounded quickly. In 2023, Bitcoin increased by more than 150%, and in 2024, the price of Bitcoin increased by 30%.

Ethereum

If Bitcoin is “digital gold”, then Ethereum is “digital silver”. Ethereum may not get as much attention as the world’s most popular cryptocurrency, but it is top of the line for many investors looking for safety in a volatile and uncertain crypto market.

A big reason for this has to do with Ethereum’s huge and expansive blockchain ecosystem. This ecosystem gives Ethereum unparalleled diversification. For equity investors, it may be helpful to think of Ethereum as a blockchain conglomerate that does a little bit of everything. That’s because Ethereum is a Tier 1 blockchain network that developers can build upon to create new products and services. These can range from new crypto tokens to new decentralized finance (DeFi) exchanges.

Given how diverse these blockchain offerings are and how large Ethereum’s worldwide developer network is, Ethereum can be a useful hedge against uncertainty in the crypto market. If one niche of the blockchain world is underperforming, there is probably another niche that is doing quite well. By comparison, a “metaverse currency” can disappear overnight if support for a particular trend or narrative evaporates.

It’s not just that Ethereum does a little bit of everything — it’s that it does everything extraordinarily well. There have been several contenders that have tried to replace Ethereum as the preeminent Tier 1 blockchain network, but none have succeeded. In DeFi, for example, Ethereum still holds a whopping 60% share of Total Value Locked (TVL), which is a key metric for measuring overall DeFi activity. For this kind of market dominance, many investors are willing to pay a premium.

Buy and hold for the long term

Together, Bitcoin and Ethereum now account for 70% of the total crypto market capitalization. This figure could continue to grow, given that Bitcoin and Ethereum are still the only cryptocurrencies with their own spot ETFs. Bitcoin and Ethereum are now more accessible than ever for retail and institutional investors. As such, money should continue to flow into both despite general market conditions.

Long term, I can’t think of two other cryptos I’d rather keep in my portfolio. Both are proven winners and both have solid long-term growth prospects. Yes, investing in crypto is risky, but Bitcoin and Ethereum have a track record to show that they can bounce back from adversity.