Guide to the Best Cryptocurrencies for 2024

As of 2023, there were over 9,000 cryptocurrencies. However, only 20% of the existing cryptocurrencies comprise over 90% of the crypto market. 

There are approximately 560 million crypto users globally, a 112X increase from about 5 million users in 2016. 

Well, as people get into crypto investment it is important to be informed on the best cryptocurrencies to buy.

Let’s start by discussing what you need to know before you start investing in cryptocurrencies.

5 Rules of Investing in Crypto

Avoiding the 100x Lottery Mentality

Is 100X possible in crypto? This would mean getting a 10,000% return on your investment. Experts say it is possible but it would take years of learning and creating a specific strategy for trading.

Crypto investors lose millions of dollars in over-hyped cryptocurrencies promising 100X returns on listing. It’s advisable to avoid the 100X lottery mentality.

If you buy cryptocurrencies based on the trending news, you are likely to lose your money in seconds. The crypto market is quite volatile; with prices moving up and down in seconds.

This introduces the concept of smart money and dumb money. Smart money refers to the institutional investors that control the market and help create hype for some cryptocurrencies. 

Dumb money refers to the investors that don’t have the patience to learn how to create wealth with the crypto market; entering the market to make fast and massive profits. 

To become a successful crypto investor, you need to seek information about every project you are interested in. This involves going beyond news articles; digging deep into the fundamentals of the project and its growth potential.

100X returns would probably need you to become a full-time crypto trader and researcher!

Balancing New Projects and Established Ones

One of the most straightforward ways of getting started with crypto investment is by buying established cryptocurrencies such as Bitcoin and Ethereum. They may ensure long-term success, and stability and have an established market patterns that can be studied.

Established cryptocurrencies also tend to endure unfavorable market conditions longer than smaller crypto coins which might drop to zero resulting in a 100% loss. However, it is advisable to carefully examine your investment choice depending on the period you intend to hold an asset.

Balancing established crypto assets with newer crypto projects can also increase overall success. Investors need to monitor new and emerging coins that could become the next big cryptocurrencies. 

Often, new coins give astronomical returns when you buy at the right time. Some coins increase by over 10,000% within a few hours of listing on the exchange. Assets like LUNA coin grew by over 6,000% within a year of its launch.

Although new projects have rapid growth, it is challenging to identify coins that will have long-term growth. One useful tip is to look at the utility of the crypto. Often coins in DeFi and payment coins tend to grow in the long run.

Tokenomics Matter

Crypto investors must understand tokenomics for various reasons. First, tokenomics informs on a crypto token's value proposition, utility, and demand; which helps determine the token's long-term value.

In some cases, the crypto tokens are purely a fundraising instrument benefiting a few early insiders. 

Also, tokenomics determines the abundance or scarcity of a particular token, influencing its adoption rate and price movement.

When evaluating a project’s tokenomics, here are a few areas to focus on:

• Token supply: maximum supply, for instance, will impact scarcity which influences demand for the coin.

• Token Distribution: The token issuance process should be properly structured, laying a sustainable foundation for the crypto project. You should check whether the project offers vesting, staking, and reward systems that benefit investors and users.

• Token utility: this refers to the purpose the token serves. The function and value of the coin should be clear.

• Token security; the project should have conducted and passed all security audits.

  
  

Real-World Assets (RWA)

An exciting shift is taking place in the crypto investment space where real-world assets are tokenized bridging the gap between traditional finance and decentralized finance.

Tokenizing assets such as real estate, and bonds increases accessibility, liquidity, and transparency of these assets.

Generally, RAW projects offer long-term value and more stable growth compared to other cryptocurrencies. Examples of the top RWA projects include Ondo and Centrifuge.

Liquidity Considerations

Liquidity plays a vital role in determining the ease of buying and selling assets. Therefore, liquidity in cryptocurrency reduces investment risk by aiding the development of an exit strategy.

Liquid markets are preferable for crypto traders and investors. This is because high liquidity indicates increased participation of buyers and sellers. This reduces volatility and allows traders to get more information on the market; which makes analyses and more accurate predictions possible.

Liquidity can be determined by looking at:

• Bid-Ask spread

• Trading volume

• Market size

Crypto Picks: Coins We Believe In

Bitcoin (BTC)

As the first cryptocurrency and the largest crypto by market cap, Bitcoin (BTC) takes the first position as a good cryptocurrency to buy. 

Over the years, Bitcoin has established itself becoming a legitimate inflation hedge and a store of value. The recent approval of Bitcoin ETF further cements its position and growing endorsement by major Fintechs.

BTC remains a significant gateway into the larger crypto space. It is therefore a must-have asset for a strong portfolio.

Ethereum (ETH)

Ethereum is the second largest crypto by market cap and the first altcoin developed in 2015. Being the leading smart contracts blockchain, ethereum is the home to numerous decentralized applications (dApps).

The smart contracts functionality expanded DeFi giving room for the rise and growth of NFTs, crypto gaming, metaverse, and other Web3 innovations.

Currently, ethereum processes more transactions than the Bitcoin blockchain. It is, therefore, a great crypto coin to invest in alongside BTC.

Uniswap (UNI)

Uniswap, the pioneer of decentralized trading, ranks high on the list of cryptocurrencies to buy. It’s currently the decentralized exchange (DEX) with the highest trading volume; processing over 50% of daily transactions in DEXs.

Uniswap is expected to remain a pivotal infrastructure in P2P trading for crypto assets; making Uniswap (UNI) a good crypto to invest in.

Chainlink (LINK)

Chainlink is a decentralized oracle network connecting blockchains to real-world data needed for the functionality of smart contracts.

Therefore, Chainlink plays a significant role in the DeFi space and beyond the crypto space. With such a value proposition, the project offers growth potential; making it one of the top cryptocurrencies to buy. 

Lido (LDO)

Lido DAO's main strength that makes it attractive to crypto investors and users is its capacity to offer services to several proof-of-stake (PoS) blockchain networks such as ethereum, Solana, Terra, and Polygon.

It is currently the leading liquid staking platform; attracting numerous users. As such, it is a good crypto for long-term investment.

Optimism (OPT), Arbitrum (ARB), Polygon (POL)

These are the leading scaling solutions designed for ethereum. As the ethereum ecosystem expands, the coins; OPT, ARB, and POL, have the potential to grow with it. The coins can be a good consideration for crypto portfolio diversification.

Ondo and Centrifuge (RWA)

These are RWA projects enabling tokenization; bridging the gap between the crypto space and traditional finance. 

Centrifuge enables the tokenization of real-world assets in NFTs, which can be collateralized for crypto loans. Its native token CFG offers about 4% to 10% APR. CFG has performed well with crypto experts giving bullish predictions on it; including a possible over 300% price increase in 2025.

Ondo Finance functions similarly to an asset management platform in traditional finance; users invest USDC on various real-world ETF funds. In the [past 200 days, as of the time of writing, ONDO price increased by over 140%. Experts continue to expect a long-term increase in value.

Aave (AAVE)

Aave is a decentralized lending platform offering its users the opportunity to lend crypto; generating income. Also, users can participate in staking to earn passive income.  With its value proposition and clear token utility, AAVE would be a good coin to buy and hold as an investment.

A contender with potential growth in the same sector is Morpho; with a similar concept of crypto lending.

Pendle (PENDLE)

Pendle is a DeFi project enabling users to tokenize and trade future yields. The users have more flexibility and control over their earnings. 

As a platform that enables users to make money with crypto investment, it has massive potential to grow.

The Graph (GRT)

The Graph is a DeFi protocol that collects data within certain blockchains allowing developers easy access and efficient use of the data in dApps and smart contracts. With such functionality, the project should experience long-term growth. Part of DePin narrative : Decentralized Physical Infrastructure

Cryptos We Are Cautious About or Find Too Risky

"Dead" Blockchains

When looking for cryptocurrencies to buy, you must conduct thorough research to avoid crypto assets associated with dead blockchains or projects that are stagnant.

Examples include projects such as Litecoin (LTC), Polkadot (DOT), Cardano (ADA), and Avalanche (AVAX) which are yet to deliver significant project updates and show little to no growth.

Meme Coins

Meme coins are prone to pump-and-dump rallies; making them the easiest way to lose your money fast in the crypto space.

They are highly speculative, often lack real utility, and are driven by hype instead of fundamentals. Examples of memecoins include Dogecoin (DOGE), Bonk (BONK), and Pepe (PEPE).

Sophie: Effortless Positioning in Strong Projects

When looking for top cryptocurrencies to buy, BTC and ETH remain the best choices for long-term investment.

Ultimately, the optimal crypto investment strategy depends on your individual market research and access to relevant infrastructure and sources.

A good place to start your crypto investment journey is Sophie; a crypto index platform that makes it easy to invest in solid projects. Sophie integrates BTC, ETH, UNI, LINK, and ARB, giving investors access to high-quality projects that are vetted and supported by a knowledgeable crypto community.