2 top cryptocurrencies to buy and hold forever

Bitcoin and Ethereum have a recipe for lasting success.

| More on:
Business man at desk looking out window with his arms behind his head at a view of the city and stock trends overlay.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

For long-haul investors, trust is everything. Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) offer exactly that. Let's explore the reasons why these "blue chip" cryptocurrencies can keep ahead of the competition with their strong brands and active development teams.  

1. Ethereum 

Ethereum was the first public blockchain to enable decentralized applications (dApps), which are programs that use self-executing smart contracts to provide services on the blockchain. The platform's first-mover advantage and respected development team can help it create long-term value for investors. 

With a market cap of $320 billion, Ethereum is the second-largest cryptocurrency behind Bitcoin. And it attracts the vast majority of dApp development with roughly 3,000 of the 4,000 total projects -- a big driver of user demand. But Ethereum isn't without challenges.

According to data from Coinbase, Ethereum's transaction capacity of 15 per second is far below rivals like Solana, which can handle 50,000 per second. And this means the platform struggles to handle its massive volume. But Ethereum's developers plan to solve this problem through an upgrade called the Consensus Layer, which will change its proof-of-work (PoW) verification system to a proof-of-stake (PoS) system. 

In Ethereum's current PoW system, miners solve computational problems to verify transactions, which is expensive because it consumes real-world resources. PoS will allow miners to verify transactions using tokens they already own to hopefully speed up the process. It is unclear when Ethereum's changes will go live, but the developers have a track record of successfully upgrading the network. 

2. Bitcoin 

Launched in 2009 by anonymous developer Satoshi Nakamoto, Bitcoin is the cryptocurrency that started it all. The hugely popular digital asset can maintain its dominant position through its widespread mainstream acceptance and decentralized investment community. 

With a market cap of $790 billion, Bitcoin accounts for a whopping 43% of the entire cryptocurrency market. This scale gives it some advantages. According to fintech company Fundera, over 15,000 businesses worldwide accept Bitcoin as payment (the report doesn't provide data for other cryptos). The asset also has significant institutional adoption. For example, the derivatives marketplace CME Group offers Bitcoin futures, which helps add liquidity to the Bitcoin market while boosting its reputation compared to newer cryptocurrencies that may lack institutional support. 

Bitcoin's ownership is also less centralized than newer rivals. According to data from coinmarketcap.com, its top 100 stakeholders control only 14% of the coins in circulation, compared to meme coins such as Dogecoin and Shiba Inu, where the top holders control 65% and 81% of available coins, respectively (data for Ethereum ownership is not available). Bitcoin's decentralized ownership structure makes it harder for large holders to tank the price by unloading their positions, which is great news for investors who value stability. 

The first-mover advantage 

Bitcoin and Ethereum both enjoy first-mover advantages in their respective niches, giving them a lasting advantage in the cryptocurrency market. As the oldest public cryptocurrency, Bitcoin likely boasts the best brand recognition. But Ethereum is also a top choice because of its expanded functionality and active development team. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Should you invest $1,000 in Bitcoin right now?

Before you buy Bitcoin shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Bitcoin wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 5 December 2024

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

US economy and sharemarket with piggy bank
International Stock News

What on earth is going on with the US stock market?

Let's dive in and see.

Read more »

A graphic illustration with the words NASDAQ atop a US city and currency
International Stock News

Why Big Tech became a huge wreck across the Nasdaq last night

Jerome Powell and his compadres shocked the market with an unexpected outlook.

Read more »

a man sits at a bar leaning sadly on his basketball wearing a US flag sticker on his cheekbone near a half drunk beer and looking despondent as though his basketball team has just lost a game.
International Stock News

The Dow Jones is on its longest losing streak in 46 years. What's going on?

The Dow is on a losing streak in the middle of a boom.

Read more »

A person leans over to whisper a secret to a colleague during a meeting.
International Stock News

Despite recent news, analysts still say Nvidia stock is a buy. Here's why

Last month, Nvidia was the most valuable company in the world.

Read more »

A young girl looks up and balances a pencil on her nose, while thinking about a decision she has to make.
International Stock News

After gaining 2,100%, is Nvidia stock done?

Nvidia has taken off as one of the key players in chips and services for artificial intelligence.

Read more »

A young couple in the back of a convertible car each raise a single arm in the air whilst enjoying a drive along the road.
International Stock News

Why Tesla stock just jumped again

Wedbush's Dan Ives thinks the stock will keep moving higher thanks to Tesla's self-driving technology.

Read more »

An older couple hold hands as they bounce happily high in the air.
International Stock News

Why the Alphabet share price just leapt higher

Investors seem to hope the Trump administration will be friendly to Alphabet and its big-tech peers.

Read more »

A panel of four judges hold up cards all showing the perfect score of ten out of ten
International Stock News

Top Wall Street analyst calls Tesla stock a top pick. Is it a buy now?

Tesla shares have been on fire lately, rising more than 70% since the November 5 election.

Read more »