A chilly wind blew down Wall Street after U.S. Treasury Secretary Janet Yellen took issue with cryptocurrencies, saying that crypto is frequently misused and that it is becoming a “growing problem.”
“Cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism,” Yellen said. Such a harsh rebuke from a senior government official can partly explain why many crypto names pulled back from their recent highs and have been trending lower following a rip-roaring start to the year.
Yet many crypto bulls took Yellen to task over her public criticisms. Cathie Wood of ARK Invest dismissed Yellen’s comments, saying the Treasury secretary “doesn’t understand the crypto space.”
Regardless of Yellen’s views, cryptocurrencies are becoming increasingly mainstream and remain extremely popular with investors. Here are four cryptos to buy, no matter what Yellen says.
- Bitcoin (CCC:BTC-USD)
- Ethereum (CCC:ETH-USD)
- Litecoin (CCC:LTC-USD)
- Bitcoin Cash (CCC:BCH-USD)
Cryptos to Buy: Bitcoin (BTC-USD)
The most established, expensive and widely used cryptocurrency continues to be the original. Founded in 2009, Bitcoin was worth $1 in 2011 and $3,300 in 2018. By March of last year, Bitcoin was valued at $5,000 apiece. Twelve months later and Bitcoin’s value reached an all-time high of just over $58,000. That’s an increase of more than 1,000% in one year.
While the cryptocurrency has retreated from its highs in recent weeks, it’s still over $50,000.
Much of Bitcoin’s surge can be attributed to mainstream acceptance. Yellen and other skeptics aside, Bitcoin continues to evolve and be used by a growing number of businesses. Credit card company Mastercard (NYSE:MA) and Bank of New York Mellon (NYSE:BK) recently said they are embracing Bitcoin and will make it easier for customers to use the cryptocurrency for transactions.
Bitcoin can also be held in the digital wallets of major fintech companies such as PayPal (NASDAQ:PYPL) and Square (NYSE:SQ).
But Bitcoin’s tipping point into mainstream acceptance seemed to come after Tesla (NASDAQ:TLSA) Chief Executive Elon Musk revealed that the electric carmaker holds $1.5 billion of Bitcoin. Investors took Musk’s holding of Bitcoin as a major vote of confidence in the cryptocurrency.
Crypto enthusiasts like to refer to Bitcoin as “digital gold” and Ethereum as “digital oil.” Popularly known as “Ether,” the Ethereum cryptocurrency is another form of digital payment that has gained a large following since it was first created in 2015.
Two of its biggest proponents are Cameron and Tyler Winklevoss, the identical twins who famously claim to have co-created Facebook (NASDAQ:FB) while students at Harvard College, and who successfully sued Facebook Chief Executive Mark Zuckerberg for $65 million in damages.
The Winklevoss twins used the money they received in the Facebook settlement to invest in and open their own cryptocurrency exchange called “Gemini” (the Zodiac sign for twins). They have been big proponents of Ether as a viable asset, saying that the cryptocurrency is undervalued. Currently it sells for about $1,800 each.
While Ether has a ways to go to catch up to Bitcoin in terms of its value, the cryptocurrency is also making strides this year. After two Bitcoin-focused exchange traded funds launched in neighboring Canada in February, it was announced that multiple ETFs that track the price of Ether are also under regulatory review and could launch later this year.
Cryptos to Buy: Litecoin (LTC-USD)
For investors with a healthy appetite for risk, there is cryptocurrency Litecoin. Currently valued at around $200 each, Litecoin is actually one of the oldest cryptocurrencies.
Created in 2011, Litecoin is very similar in its structure and functionality to Bitcoin. Partly owing to the similarities, Litecoin has largely remained in the shadow of Bitcoin. However, the cryptocurrency seems to now be attracting growing interest from investors.
Litecoin’s price has gained more than 320% since last September when a bull run began in the cryptocurrency. More than 2,000 companies around the world now accept Litecoin as a legitimate form of payment and Litecoin’s market capitalization is nearing $14 billion.
Litecoin was given a further vote of confidence in February when it was revealed that Grayscale, the world’s biggest cryptocurrency asset manager, bought just under 7,000 Litecoin, bringing its total holding of the cryptocurrency to $250 million. Clearly things are looking up for this lesser-known crypto.
Bitcoin Cash (BCH-USD)
Bitcoin Cash remains a largely speculative investment at this point, albeit one with upside potential. The best way to think of Bitcoin Cash is as a more fluid form of Bitcoin. Some people call it a spin-off of the original Bitcoin.
Bitcoin Cash was created to remedy a problem with the digital size of the original Bitcoin. Bitcoin’s 1 MB size was quite large 10 years ago and, as a result, it led to transaction delays. Bitcoin Cash was created to increase the block size and enable a greater number of Bitcoin transactions. By facilitating faster transactions, Bitcoin Cash helped the original Bitcoin scale and grow.
Today, Bitcoin Cash trades on exchanges such as the aforementioned Gemini as its own standalone cryptocurrency. Bitcoin Cash is currently valued at around $540 each. While popular among many crypto purists, Bitcoin Cash is not as accepted or widely used as the original Bitcoin. Many people within the crypto community argue that Bitcoin Cash should be viewed more as an underlying investment tool than as a proper currency the way that Bitcoin is seen.
Regardless, Bitcoin Cash is gaining acceptance as a cryptocurrency that offers lower transaction costs and speedier transaction processing times. Fans of Bitcoin Cash also claim that it is easier to mine than traditional Bitcoin.
On the date of publication, Joel Baglole held long positions in SQ and FB.
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