3 cryptocurrencies that will survive this crypto winter

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This past year in crypto is one that will likely fall into infamy. From the collapse of the stablecoin Terra in May that sent shockwaves through the crypto economy to the more recent implosion of the popular crypto exchange FTX, the headlines in 2022 have been filled with bankruptcies, declines in shocking prices and scandals. Of course, the hope among token holders is that this crypto winter will soon thaw, but even if it lasts longer, these three Motley Fool contributors are optimistic that Bitcoin (BTC -0.29%), Ethereum (ETH – 1.44%) and Fantom(FTM -1.41%) will survive.

The Crypto Winter Veteran

Neil Patel (Bitcoin): When trying to identify cryptocurrencies that can weather the current market downturn and shine on the other side, investors should focus on longevity first. I won’t get any points for originality with this recommendation, but based on this perspective, Bitcoin – the most valuable cryptocurrency in the world – immediately comes to mind as a digital asset that will easily survive the current crypto winter.

Launched in January 2009, Bitcoin is the oldest and most developed cryptocurrency. It has already endured several crypto winters over the past 13 years or so, only to reach new heights afterward. And that gives me a lot of confidence that it will still be around once the current market recovers. Additionally, a plethora of financial instruments and infrastructure systems have already been built to support the Bitcoin ecosystem, and these developments are here to stay. As of this writing, Bitcoin’s market cap of $330 billion is more than double that of the next biggest crypto, Ethereum, a dominant lead that I suspect won’t change any time soon.

While other younger, more speculative cryptocurrencies that have skyrocketed rapidly only to fall even faster have certainly caught the eye of investors in recent years, Bitcoin’s “boring” status in the digital asset world has left it at that. gives some stability in an otherwise wild world. and unproven asset class. And I strongly believe that this characteristic has value, especially today when investors have lost confidence in the whole sector.

Since Bitcoin’s price hit an all-time high of just under $69,000 in November 2021, it has fallen 75%. After a drop of this magnitude, allocating a small percentage (no more than 5%) of a well-diversified portfolio to Bitcoin could be a smart move for investors who have a long-term mindset and believe in its potential.

The king of the smart contract

RJ Fulton (Ethereum): Although Bitcoin laid the foundation for the wave of cryptocurrencies that followed, the arrival of Ethereum in 2014 arguably changed crypto just as much as Bitcoin – and perhaps more. Bitcoin and Ethereum differ in one main way: smart contracts. The Ethereum blockchain is programmable, allowing developers to build code that is executed when certain conditions are met. These smart contracts are the backbone of decentralized applications that have the potential to revolutionize finance, insurance, real estate, gaming, business, and even the internet itself.

While new smart contract-enabled blockchains such as Cardano, Solana, and Avalanche have emerged as potential competitors to Ethereum, they have not been able to usurp Ethereum’s blockchain leadership position. original smart contracts.

When comparing the Ethereum ecosystem to those of its competitors, it becomes very clear that the blockchain is above the competition. Consider the Total Locked Value (TVL) metric, which measures the value locked in smart contracts on a given blockchain. Ethereum’s TVL is $24.3 billion, which is 58% of the value among all other smart contract-enabled blockchains. The blockchain with the second highest TVL is Binance Coin, with a paltry $5.5 billion.

Most of Ethereum’s value is tied to smart contracts which are used for a wide range of use cases which include a new sector known as decentralized finance (DeFi) which includes applications supporting elements such as yield farming, arbitrage, lending and staking.

Ethereum is surely enjoying its first-mover advantage, but the blockchain continues to grow and innovate. With recent developments like The Merge and its future goals of supporting more apps, investors can be sure that Ethereum has what it takes to weather this crypto winter.

The newcomer

Michael Byrne (Fantom): While Bitcoin and Ethereum are top-notch cryptos with the largest market caps and most users, and therefore likely to survive in the long term, let me highlight one smaller crypto that might surprise people and join them on the upside of this crypto winter: Fantom (FTM -1.41%). Fantom runs on a layer 1 blockchain which enables smart contracts, just like Ethereum. And like many altcoins, it’s down around 90% year-to-date, though it’s up 16% from its 52-week low.

Fantom has a strong community behind it, with nearly 24 million unique wallet addresses. While activity on its blockchain has been down since its peak, people are still using it to the tune of over 500,000 transactions a day, so Fantom isn’t going away anytime soon. Andre Cronje, who was one of the main architects of Fantom (and who sent shockwaves through the crypto community when he left the Fantom Foundation earlier this year, only to make a surprise return), points out that it is the oldest non-forked crypto other than Ethereum that has a significant aggregate value locked. Cronje also noted that unlike other cryptos, Fantom refused to pay for partnerships or exchange listings. As a crypto investor, I appreciate the long-term perspective of the Fantom Foundation.

Unlike many companies behind other cryptocurrencies, the Fantom Foundation would have plenty of capital to weather the crypto winter and beyond. In a recent post, Cronje wrote that Fantom holds 450,000,000 FTM tokens, $100 million in stablecoins, $100 million in other crypto assets, and $50 million in non-crypto assets. He writes that the company’s operating expenses are around $7 million a year, giving Fantom a 30-year run at its current burn rate without touching its FTM holdings.

Cronje takes a long-term perspective, writing that “We’ve been operating for four years, we plan to continue operating for another 30 years or more.” He says Fantom makes around $10 million a year from transaction fees and other sources of income, which means the company is cash flow positive, which certainly stands out in the current environment. This gives it a cushion that should allow it to last until the next crypto bull market. It could also theoretically use some of its capital to attract new products to its ecosystem and to entice more developers to build on its blockchain at a time when funding may dry up in other cryptocurrencies.

Bitcoin and Ethereum will survive the crypto winter and thrive in the future, but if you’re a risk-tolerant crypto investor looking for a name a little out of left field and higher on the risk spectrum, Fantom would be a good bet to be one of the survivors of the crypto winter due to its long-term outlook, strong community and user base, solid performance, and large war chest.

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