What goes up can go down – and it usually does. This is what we see with cryptocurrency prices at the moment. After generating massive returns through much of 2021, the latter part of the year and the beginning of 2022 were downright ugly.
It is definitely possible that the cryptocurrency will fall further. However, a pullback may also provide a significant buying opportunity. Here are two no-brainer buys in the current cryptocurrency meltdown.
Ethereum (CRYPTO: ETH) It rose more than 400% last year. Now, though, it’s down more than 30% from its peak set in November. There are several reasons to believe that this decline will only be temporary.
For one thing, Ethereum has seen a bigger sell-off in the past and has recovered well. For example, the digital token fell by nearly 60% in the middle of 2021. But within four months, it was all back and moving higher than before.
Ethereum is also likely to gain wider adoption. The second phase of the Ethereum 2.0 upgrade is scheduled for this year. This will integrate the already existing chain of beacons with the Ethereum mainnet. As a result, Ethereum will switch entirely to the Proof of Stake (PoS) protocol.
The third and final phase of the upgrade is planned for 2023. When completed, the Ethereum blockchain will be much faster, more scalable, less power consuming, and significantly lower transaction costs.
Just Bitcoin (CRYPTO: BTC) It has more market capitalization than Ethereum at the moment. With the Ethereum 2.0 upgrade, look for Ethereum to bridge the gap with Bitcoin a bit.
Avalanche (CRYPTO: AVAX) It was ranked as one of the superstars of the crypto world in 2021. The price of its native token rose more than 4,500% sometime before ending the year up about 3,380%.
Like Ethereum, though, the avalanche is now more than 30% off its peak. The broader cryptocurrency crash has dragged the soaring coin in its wake. Don’t think the good times are completely over due to an avalanche.
Its blockchain remains the fastest transaction processing smart contract platform. Bitcoin takes about 60 minutes to add an irreversible transaction to the blockchain. Ethereum takes approximately six minutes. The avalanche occurs in less than two seconds.
And while Ethereum needs a major upgrade to improve its processing capabilities and lower transaction costs, Avalanche is already very fast and has low transaction fees. It can handle more than 4,500 transactions per second. The avalanche fee is also significantly lower than that of Ethereum, despite a spike at the end of last year.
The bottom line is that avalanche has competitive advantages that attract developers. To date, there are 160 projects in the avalanche ecosystem, including blockchain wallets, stablecoins, and non-fungible tokens (NFTs).
Another high-profile project will be added to that list soon. International accounting and consulting firm Deloitte has chosen blockchain from Avalanche to develop its disaster recovery system.
No one can know for sure how long the current crypto collapse will last. Sooner or later, a recovery will come. Avalanche and Ethereum should be the biggest winners when the bounce starts.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.