It has been a bear market for most of 2022 for stocks and cryptocurrencies, which have moved with a significantly stronger correlation this year than in previous years. The Nasdaq Composite has declined by around 21.5% so far this year, despite a rally in July. As the Federal Reserve battles rising inflation with dramatic interest rate increases and quantitative regulation — shrinking the enormous balance sheet it accumulated during the epidemic and inadvertently draining liquidity from the economy — most cryptos are in even more deteriorating condition.
Although I’m not sure if the bear market is at its worst or if steep falls will end soon, I am confident that at some time a bull market will begin, which will usher in new market highs. Here are two cryptocurrencies you should buy without hesitation before the market correction is over.
1. Bitcoin
There are currently more than 5,000 different cryptocurrencies, but I honestly don’t see a reason to move away from the traditional ones. With a market worth of more than $410 billion, Bitcoin (CRYPTO: BTC) is the world’s largest cryptocurrency and the creator of blockchain technology. Last year, Bitcoin’s market cap reached far over $1 trillion at one point. The success of the business actually depends on Bitcoin’s performance because almost other cryptocurrencies and most equities associated to them move in at least some way that is correlated to Bitcoin’s price.
I particularly appreciate Bitcoin since there is solid proof that it is being adopted by the world and will continue to be adopted. Large Wall Street banks now provide services to aid clients in purchasing and storing Bitcoin. Earlier this year, Goldman Sachs made its first loan ever backed by bitcoin. In the United States, there are currently over 32,000 Bitcoin ATMs.
Although the technical prowess of the Bitcoin blockchain network is less than that of many other more recent blockchain networks, the network’s miners rarely allow updates, thus in some ways it is by design. Despite not increasing during the present period of price pressure, Bitcoin may ultimately prove to be a hedge against inflation. A total of 21 million tokens are available in the cryptocurrency, and the last one is anticipated to be created around the year 2140. I believe that Bitcoin will ultimately endure for a very long time and that its price will eventually rise significantly above where it is currently trading.
2. Ethereum
In keeping with sticking to the tried-and-true, I think Ethereum (CRYPTO: ETH), the second-largest cryptocurrency in the world with a market cap of around $200 billion, is another obvious choice to buy before the bull market starts.
The use of Ethereum and its smart-contract technology has become very pervasive. Numerous non-fungible tokens are also made using this approach (NFTs). Thousands of developers have flocked to the Ethereum network to create various decentralized applications using smart-contract technology. On top of the Ethereum network, a huge number of ERC-20 coins have also been developed. Shiba Inu, Tether, and Chainlink are a few of the most well-known ones.
The conclusion of the network upgrades, which have been continuing for several years, will be the next significant milestone for the Ethereum network. With such modifications, it will switch from a proof-of-work (PoW) mining system to a proof-of-stake (PoS) mining system, where miners utilize a lot of processing power (and electricity) to solve cryptographic puzzles in order to mine new tokens. As part of the new protocol, miners will stake their current Ethereum tokens to participate in what is essentially a lottery for the chance to add new blocks and mine tokens. PoS utilizes energy significantly more effectively than PoW.
As a result of the modifications, the network should be able to handle many more transactions per second, which should reduce congestion and “gas fees” (also known as transaction costs) and enable the network to grow more effectively. Investors are extremely enthused about the possible price effects of the renovations, which are anticipated to be finished soon.