Get answers to your cryptocurrency investment questions. Learn about 2024 trends, promising coins, market risks, and whether investing in cryptocurrency is wise.
Despite a lively rally in December 2023 that saw the overall cryptocurrency market cap increase by more than 16%, reaching $1.66 trillion as of February 6, we are still in the shadow of the 2021 highs.
Meanwhile, 2024 started off with good news for Bitcoin (BTC), which finally got the nod with the SEC’s approval of a spot Bitcoin ETF, hinting at institutional acceptance that could bring new capital into the market.
Expectations of Bitcoin halving in April herald a supply shock and spark speculation that could redefine market dynamics.
Meanwhile, gas fees for Ethereum (ETH) are expected to be reduced through future updates. This is expected to reduce average transaction fees to less than $0.01, making Ethereum more competitive and attractive to users.
There are also predictions that cryptocurrencies will become the default currency of the internet as AI assistants adopt them for transactions, painting a picture of a sector on the verge of mainstream adoption.
But the question we face at this point is ‘Are cryptocurrencies still a good investment in 2024?’ Let’s explore.
Are cryptocurrencies worth investing in 2024?
As we explore the question of whether cryptocurrencies are still a good investment in 2024, let’s take a look at some of the key trends and factors that could impact the cryptocurrency market this year.
Bitcoin Halving and ETFs
The Bitcoin halving event scheduled for April 2024 will see mining rewards reduced from 6.25 BTC to 3.125 BTC per block. Historically, halving events have led to significant price increases. For example, after the halving in 2020, the price of Bitcoin reached an all-time high in 2021.
These factors, along with the approval of the US Spot Bitcoin ETF, could have a significant impact on the value of Bitcoin, and whether the outcome is bullish or bearish remains to be seen.
Stablecoins and digital payments
Stablecoins are expected to surpass Visa’s trading volume. These developments could increase the utility and value of stablecoins, making them an attractive component of the cryptocurrency investment landscape.
Meanwhile, the adoption of stablecoins for daily transactions could increase acceptance and become a cornerstone of the future of digital payments.
Ethereum, Layer 2 Network, and TVL
Ethereum’s continued development, especially with upgrades such as Proto-danksharding in EIP-4884, could improve scalability and reduce transaction fees, and Ethereum is expected to double its revenue to $5 billion in 2024.
Meanwhile, layer 2 solutions like Polygon (MATIC) and Arbitrum (ARB), which aim to solve Ethereum’s scalability issues, may also gain attention as Ethereum becomes mainstream.
Meanwhile, overall total value locked (TVL) data suggests the ecosystem is rebounding from less than $70 billion in March 2023 to nearly $106 billion as of February 6, according to CoinMarketCap.
Enterprise adoption and defi integration
Increasing corporate participation in the cryptocurrency space is a sign of mainstream acceptance of cryptocurrencies.
Moreover, moves to integrate know-your-customer (KYC) protocols within DeFi platforms could attract institutional liquidity, potentially making the DeFi sector more attractive to existing investors.
social innovation
The growth of SocialFi, the blending of DeFi and social media, and the integration of cryptocurrencies in gaming and virtual worlds could expand the potential of cryptocurrencies to penetrate a variety of sectors.
These innovations can expand the use cases for cryptocurrency assets and open new avenues for investment. Especially since friends.tech and similar platforms are gaining mainstream attention, demonstrating the launch and monetization potential of SocialFi applications.
What are the best cryptocurrencies to invest in right now?
Let’s take a look at which coins are trending and where they may be headed, keeping in mind the volatility and risks inherent in the cryptocurrency market, with a focus on recent growth and potential.
PENDLE
Pendle has seen significant gains, trading at around $3.20 as of February 6, and has grown 140% in the past 30 days thanks to its dominant position in the Defi space.
Pendle allows you to tokenize and trade yielding assets, giving users more flexibility in managing yield. This, combined with Binance Labs’ strategic investments and partnerships in 2023, proposes a new ecosystem.
The protocol’s multi-chain expansion and focus on both retail and institutional users could further increase the value of the ecosystem and the price of PENDLE. However, like any other asset, it faces market volatility and risk, especially in the short term..
Sui (SUI)
Sui (SUI) grew more than 80% last month and was trading at $1.54 as of February 6.
Sui is a blockchain platform designed for high throughput and low latency, supporting a variety of decentralized applications (dapps).
Its growing popularity can be attributed to its technical capabilities, including scalability and developer-friendly features.
Investors can be optimistic about Sui’s potential to capture a significant portion of the dapp market, which has been on the rise recently, although the usual caveats for new blockchain platforms apply, including adoption issues and competition.
Ethereum Name Service (ENS)
ENS has also seen significant growth of over 70% in the past month and was trading at $22.15 as of February 6.
The price of ENS has increased by more than 20% in the last 24 hours thanks to a partnership with GoDaddy, which makes it easier for users to connect their web2 domain names with .eth domains at no additional cost.
ENS functions as a decentralized, open, and scalable naming system on the Ethereum blockchain, translating human-readable Ethereum addresses into machine-readable alphanumeric codes.
This system mirrors the Internet’s DNS by making Ethereum addresses more user-friendly and accessible, similar to how DNS simplifies website accessibility for users.
Should you invest in cryptocurrency?
Although the coins mentioned above are showing promising trends based on innovative utility and growing ecosystems, investing in cryptocurrencies remains speculative.
Prices can fluctuate wildly, so you should be prepared for the possibility of losing your entire investment.
Diversification and thorough research are important, and considering professional financial advice before making any investment decisions is always a good strategy.
Disclosure: This article does not represent investment advice. The content and materials presented on this page are for educational purposes only.
Frequently Asked Questions
What is the best cryptocurrency to invest in in 2024?
Identifying the best cryptocurrency to invest in in 2024 requires considering several factors, including technology, market trends, and adoption rates. Considering recent developments, Pendle, SUI and ENS have demonstrated notable growth and potential due to their unique products and strategic partnerships. However, since the cryptocurrency market is highly volatile, investments must be approached cautiously.
Is cryptocurrency investment good or bad?
Investing in cryptocurrencies can yield significant returns, but also carries high risks due to market volatility, regulatory changes, and technological uncertainty. Before investing, it is important to conduct thorough research, understand the technology behind each project, and evaluate your risk tolerance. Always be prepared for the possibility of investment loss, and never invest more than you can afford to lose.
What is the best coin to buy now?
Determining the best coin to buy now will depend on a variety of factors, including market performance, technical utility, community support, and future potential. Major cryptocurrencies such as BTC and ETH are often considered safer bets due to their established presence and ongoing development. However, new projects with specific use cases or technological innovations can provide opportunities for growth. It is important to evaluate each coin’s fundamentals, market trends, and risk factors. Always remember that cryptocurrency investments can be volatile and unpredictable. So proceed with caution and consider diversification to minimize risk.