Earlier this month, US President Donald Trump announced the creation of strategic Bitcoin (Cryptography: BTC) Reserve and US digital asset stockpile. The former holds Bitcoin – no surprises. The latter holds four more largest cryptocurrencies: Ethereum (Encryption: ETH)XRP (Cryptography: XRP)Solana (Cryptography: Sol)Cardano (Cryptography: ADA).
The fact that the US stocks up crypto is exciting news for crypto investors. But are there any good cryptocurrency investments for these? Let’s take a closer look at each one.
Bitcoin is the original cryptocurrency and is the most successful. At the time of writing, it has a market capitalization of $1.7 trillion, which is larger than all other cryptocurrencies combined. Over the past three years (as of March 19th), Bitcoin prices have risen 98%. S&P 27% of the 500 will return.
Bitcoin was intended as a decentralized digital currency, but transactions are too slow and expensive to act as a payment method. Processing times typically range from 10 minutes to 1 hour or more depending on network congestion, with fees of approximately $1 per transaction.
Despite this, Bitcoin is catching up as a valuable digital store, or “digital gold.” Supply concludes with 21 million Bitcoins, adding an additional element of rarity. If you’re looking for a way to hedge inflation, or if you’re looking for ways to add cryptocurrency to your portfolio, Bitcoin is worth considering.
Ethereum is the second largest cryptocurrency by market capitalization and has gained popularity with the introduction of smart contracts. Smart Contracts are programs built into cryptocurrency blockchain networks for recording transactions.
Developers can launch distributed apps (DAPPS) using smart contracts. This has a wide range of uses, including distributed finance (DEFI) services, such as the Crypto Lending platform, blockchain games, and launching new Crypto tokens.
Ethereum has a big lead in terms of market share as it first provided smart contracts. According to Defilama, Ethereum currently has most of the blockchain with a total value of $46 billion locked to defi applications.
On a negative note, Ethereum’s performance lags behind other smart contract blockchains. Compared to rival Solana’s $0.00025, the average trading fee was $0.19 as of March 19th. Ethereum has also lost 34% of its value over the past three years. It’s better to avoid Ethereum until it proves that it can reverse this downward trend.
XRP is the native cryptocurrency of Ripple, a blockchain designed as a cross-border payment solution. The World Interbank Financial Communications Association (SWIFT), the best system for international payments, can take 3-5 days to transfer international banks. The fees usually cost between $15 and $50, depending on the bank involved.
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With Ripple Blockchain, transactions are processed within 4-5 seconds at a rate of 0.00001 XRP. In addition to being used for minimal transaction fees, XRP is also a bridge currency used to promote international remittances.
In a real use case, XRP is one of the stronger crypto investments available today. Over the past three years, we’ve put all the other cryptocurrencies on this list top with a return of 187%. The biggest headwind since 2020 was a lawsuit from the Securities and Exchange Commission (SEC), but on March 19, RippleLabs CEO Brad Garlinghouse announced that the SEC had withdrawn the lawsuit.
Solana is a competitor for Ethereum because it provides developers with a platform to launch Dapps. The difference is Solana’s own historic proof system for verifying transactions, which makes it a much more efficient blockchain.
As mentioned above, the average trading fee for Solana is only $0.00025. Handles over 4,000 transactions (TPS) per second. In comparison, Ethereum handles around 17 TPSs because it doesn’t develop a fast way to validate transactions like Solana has.
Like all cryptocurrencies, Solana is a high-risk, unstable investment. However, it has grown by 39% over the past three years, and its speed and low cost should continue to attract developers to the Solana ecosystem.
Cardano is another Ethereum competitor that supports smart contracts and enables the development of Dapps. It helped popularize the proof system that people who own cryptocurrency can pledge tokens as part of the transaction verification process and earn rewards. The demonstration system has minimal energy requirements, and even Ethereum adopted it in 2022.
One unique thing about Cardano is the developer’s dedication to using peer review and evidence-based research. However, this does not always benefit from it. Cardano is notoriously slow to develop. For example, we did not introduce smart contracts until 2021.
Cardano prices have fallen 18% over the past three years. Like Ethereum, it’s best to see if Cardano can build forward momentum before committing your money.
Just because the US government stocks these five cryptocurrencies doesn’t mean you need to invest in all of them. Cryptocurrencies are dangerous and unproven asset classes. The two ciphers on this list, Ethereum and Cardano, have lost value in the past three years. Others are doing well, but they are still very unstable.
As far as Crypto Investments goes, Bitcoin is a relatively safe option. It is the most famous cryptocurrency and the largest cryptocurrency from the start. If you’re looking for a non-Bitcoin cryptocurrency, XRP and Solana are two outstanding projects. With Bitcoin, XRP, and solana, you can use a solid crypto portfolio that covers multiple use cases.
No matter which cipher you choose, be aware of the asset allocation. Due to risk, cryptocurrencies must not exceed 5% to 10% of their portfolio. Use the rest to invest in stocks, bonds and other stable assets.
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*Stock Advisor will return as of March 18, 2025
Lyle Daly has positions in Bitcoin, Cardano, Ethereum and Solana. Motley Fools have positions in Bitcoin, Cardano, Ethereum, Solana and XRP and recommend it. Motley Fools have a disclosure policy.
President Trump is planning a crypto sanctuary with these five coins. Should you invest in them? Originally published by The Motley Fool
