Investments in cryptocurrencies and other digital assets are not a fad. They are an investment and very profitable when done right. Cryptocurrencies have intrinsic value and have become a value of exchange. In many countries, they are already being treated as ways to get better inflated adjusted returns over traditional assets.
There is no asset that in the last ten years has generated higher returns than Bitcoin or Ethereum, to name just two of them.
Digital money and the rest of the digital assets are a type of decentralized asset, that is, independent. Cryptocurrencies and other digital assets are based on data generated through the currently widely used blockchain technology.
In just a few years, cryptocurrencies have become a new asset class in high demand due to their high profitability. For this reason, they are increasingly accepted in the world as a means of payment, as stores of value and as investment instruments.
These intangible assets have had incredible growth globally, given their rapid acceptance. Unlike other assets, they are created, stored and traded in a digital format. Digital assets generated through the blockchain encompass cryptocurrencies and cryptocurrency tokens. Cryptos include stable coins that trade at par with the dollar or any other fiat currency. There are other digital assets, such as NFTs or non-fungible tokens, which are also traded on the market. An NFT can be an image, a video, or any other unique digital file.
To better understand its profitability, let’s look at the returns of the top cryptocurrencies.
During the last decade Undoubtedly the digital currency with the highest growth and profitability has been Bitcoin. From its launch in 2009 to the close of 2021, its price grew exponentially from 0.01 cents to $67,000.
In the last decade, the largest cryptocurrency in the world in market capitalization grew by 20 million per cent. It had an average annual jump of 230%. During some intermediate years, such as in 2013, it reached annual highs of 5,507% and lows of -73%, as occurred in 2018. At the beginning of last year, it became the world’s highest-performing asset, reaching 900% per year. Cryptocurrency managed to outshine any other investment asset (stocks, metals, commodities or currencies) and outperform them by a huge margin. The second asset was the NASDAQ 100 index (USA), with an annualized return of 20%. During the last five years In addition to BTC, there are other cryptocurrencies such as Ethereum and security tokens such as altcoins that follow in profitability.
During 2018 and 2019, Ethereum had negative annual returns (with -82.7% and -8.0%). But the second most popular cryptocurrency in the world has risen rapidly due to its new version of Ethereum 2.0. The potential value of Ether and the Ethereum open-source blockchain has driven its purchase, and consequently, its yields have grown enormously. The return of Ether in 2020 was 464.1% and 404.2% in 2021.
The parallel processing approach used by Polkadot makes blockchains work as “parachains” within the network and makes them more scalable. That is why it is considered another attractive investment option. DOT’s profitability in the last two years was 291.27%.
In February 2020, the value of an ADA was 0.05 cents, and in December 2021, its token was trading at $1.36. Apart from Cardano (ADA), which achieved a profit of 588% in the last year
The list of cryptocurrencies with the highest gains in 2021 is headed by Polygon (MATIC). It went from being worth just 2 cents on the dollar at the beginning of the year to $2 in May 2021.
It’s an altcoin that emerged from a meme, which quickly became a crypto coin that was appreciated and desired by crypto investors. In 2021 its price continued to grow to the point of achieving an extraordinary growth of 1,450%. Suddenly it did crash along with the rest of the market.
The blockchain promises to generate faster smart contracts and is very scalable and secure, according to its promoters. Its AVAX token last year made a 2,754% gain.
Just like CRO is tied to a crypto exchange, only BNB is bigger and more liquid. This Crypto returned 2021 returns of 1,294%.
The faith of its followers in this meme token positioned it among the most profitable during 2021. Elon Musk has been one of its promoters by announcing that Tesla would accept Dogecoin. Its return last year was 2,819%.
It’s the Crypto with the best earnings during 2021; like Ethereum, its blockchain uses PoS, but it introduced an innovation in its network called proof of history (PoH). Their SOL token last year saw a whopping 9,160% gain.
This stablecoin is linked to various tangible assets. Their project has the purpose of facilitating the adoption of various cryptocurrencies. It is supported by several Asian e-commerce companies. LUNA’s returns during 2021 totalled 9,530%.
The native token of the Crypto.com blockchain and exchange (CRO) has been favoured by a successful marketing and joint business plan with Visa Inc. and the sports sector. Its profit in 2021 was 780%.
Investments in cryptocurrencies are becoming more and more popular. The trade volumes in many countries exceed the volumes of the stock exchanges. The younger generation is far more comfortable investing in this paradigm-changing asset class.
Investors looking to truly build generational wealth have an opportunity to filter and invest in some of the most advanced blockchains and tokens that have the potential for gains that far outstrip the market. Such paradigm-shifting asset classes don’t show up often, but when they do, they are the way to create financial freedom and generational wealth.