In this article, we will discuss 10 cryptocurrencies Redditors are buying for early retirement. If you want to skip reading about how cryptocurrencies are gaining popularity and are receiving global acknowledgment, you can go directly to 5 Cryptocurrencies Redditors Are Buying for Early Retirement.
The hype around cryptocurrencies is growing at an exponential rate. These digital tokens are revolutionizing the way the world works. What once was an unregulated practice, is now pushing governments and lawmakers to work on tax laws and rules to regulate the flow of this complex intangible entity. According to a report, the global cryptocurrency market was valued at $1.78 trillion in 2021. The market is expected to hit $32.42 trillion by 2027, at a compound annual growth rate of 58.4% over the period.
The Crypto Seesaw
Billionaire investors such as Steve Cohen, Warren Buffett, and George Soros, who were once against cryptocurrencies, are now slowly warming up to them.
The crypto market may be the most high-risk/high-reward market ever. Bitcoin, which reached its record high last November when the coin was trading at $68,000 per coin, plummeted to record lows after a market retreat in the U.S. stock market this January.
Financial companies like Visa Inc. (NYSE:V), PayPal Holdings, Inc. (NASDAQ:PYPL), Mastercard Incorporated (NYSE:MA), and JPMorgan Chase & Co. (NYSE:JPM) are expanding their portfolios by incorporating blockchain technology and bringing transparency to finance operations.
Photo by Ovidiu Gruescu on Unsplash
Our Methodology
To determine 10 cryptocurrencies Redditors are buying for early retirement, we scoured Reddit forums and jotted down the currencies that had positive opinions associated with them. We then looked up the networks each currency was built on top of, checked their consensus mechanisms, and looked at news around collaborations and projects the currency’s network is a part of.
We believe that a currency’s network fundamentals along with the problems it aims to solve can help determine if it will be relevant in the future and if it has the potential to appreciate in value. The currencies were ranked in order of increasing mentions on Reddit threads and discussions that were talking about cryptocurrencies for retirement.
10 Cryptocurrencies Redditors Are Buying for Early Retirement
10. Algorand
Algorand was founded by Silvio Micali, a professor at MIT, and employs the pure proof-of-stake system along with smart contracts. Algorand is a decentralized network designed to solve the blockchain trilemma of achieving speed, security, and decentralization simultaneously. The project is working on achieving interoperability across various blockchain networks.
Algorand’s blockchain network was designed in a similar fashion to that of Ethereum but can execute in smaller amounts of time. Algorand can currently process 1,300 transactions per second and expects to hit a target of 3,000 transactions per second in the near future. Algorand’s pure proof-of-stake consensus mechanism does not demand validators to stake coins to earn rewards, but rather, all stakeholders get a fixed 4-6% APR of their stake value if they hold their ALGO coins.
This February, The Algorand foundation announced that it is putting up $20 million in funding to further the development of its decentralized finance ecosystem. The Algorand foundation will be giving $10 million in grants to developers that will be working on the Ethereum Virtual Machine (EVM) compatibility, so applications compatible with Ethereum will also be compatible on Algo’s network.
Investors that are bullish on altcoins to diversify their portfolios, should also look into financial companies working in the area, such as Visa Inc. (NYSE:V), PayPal Holdings, Inc. (NASDAQ:PYPL), Mastercard Incorporated (NYSE:MA), and JPMorgan Chase & Co. (NYSE:JPM).
PayPal Holdings, Inc. (NASDAQ:PYPL) was spotted on 110 investment portfolios at the end of the fourth quarter of 2021. The total stakes of these funds amounted to $9.93 billion.
Harding Loevner mentioned PayPal Holdings, Inc. (NASDAQ:PYPL) in its fourth-quarter 2021 investor letter. Here’s what they had to say:
“Within IT, PayPal reported slower growth outside its core US market and lowered its earnings guidance for 2022 just enough to catch the wrath of the expensiveness vigilantes. Viewed by sector, IT and Health Care were the biggest detractors in the quarter. Within IT, PayPal reported slower growth outside its core US market and lowered its earnings guidance for 2022 just enough to catch the wrath of the expensiveness vigilantes.”
9. Cardano
Cardano is an open-source and decentralized public blockchain platform, founded by Ethereum co-founder Charles Hoskinson in 2015. The project achieves consensus using proof of stake and facilitates peer-to-peer transactions with ADA, its native cryptocurrency. Cardano is aimed at decentralizing Africa and other developing countries, a use-case that strengthens its likelihood of staying relevant in the future.
Last September, Cardano announced a partnership with DISH Network Corporation (NASDAQ:DISH) to help the telecom company integrate the Cardano blockchain into the business. Cardano’s founder, Mr. Hoskinson said that the network will allot 8 million digital identities to DISH Network Corporation (NASDAQ:DISH)’s customers.
By the end of the fourth quarter of 2021, DISH Network Corporation (NASDAQ:DISH) was present in 54 hedge fund portfolios. The total stakes of these funds in the company amounted to $3.04 billion. This is compared to 51 positions in the preceding quarter, with total stakes amounting to $2.43 billion.
ClearBridge Investments mentioned Dish Network Corporation (NASDAQ:DISH) in its second-quarter 2021 investor letter. Here’s what the firm had to say:
“Portfolio holdings in the communication services and financials sectors also made strong contributions. Dish Network continues to make progress on the buildout of its greenfield 5G network, with Las Vegas slated to become the first market launched later this year. The company gained credibility, and its stock reacted favorably, after it announced a partnership with Amazon to deploy a 5G cloud-native network using AWS’s cloud infrastructure. While the stock has been volatile in recent quarters, we continue to feel confident in Dish’s long-term prospects, which include competing as a fourth U.S. wireless carrier. Charter Communications has been executing well and benefiting from the growth in residential broadband, which has been accelerated by COVID-19 and should see further support from the Biden Administration’s infrastructure bill, which earmarks $65 billion for broadband buildout. In addition, we expect the company to continue to grow its wireless business, leveraging its mobile virtual network operator (MVNO) relationship with Verizon. The company continues to generate strong and growing free cash flow and deploys it toward consistent and material share buybacks.”
8. Chainlink
Chainlink is a decentralized network of nodes that provide data and information from off-blockchain sources to on-blockchain smart contracts via oracles. Oracles are computer programs that bridge the gap between smart contracts and off-blockchain datasets and allow for a secure two-way transfer of data. As of March 21, 2022, Chainlink boasts a market cap of $7.03 billion and is ranked as the top 23rd cryptocurrency by market cap.
Last September, Cardano announced that it has entered a strategic collaboration with Chainlink that is aimed at developing smart contracts for Cardano’s decentralized finance (DeFi) applications on the oracle-backed blockchain network.
Investors bullish on Chainlink should also consider investing in financial stocks such as Visa Inc. (NYSE:V), PayPal Holdings, Inc. (NASDAQ:PYPL), Mastercard Incorporated (NYSE:MA), and JPMorgan Chase & Co. (NYSE:JPM).
By the end of the fourth quarter of 2021, 144 hedge funds in the database of Insider Monkey were long in Mastercard Incorporated (NYSE:MA). These funds held stakes worth $17.24 billion in the company.
Here’s what Saturna Capital said about Mastercard Incorporated (NYSE:MA) in its fourth-quarter 2021 investor letter:
“Given the likelihood of rising inflation and interest rates ahead, we anticipate adjustments to the portfolio to reduce exposure to highly valued stocks dependent on low interest rates to support terminal year valuations, while seeking investments in companies more correlated with a return to economic normalcy. We sold our position in Mastercard. Although Mastercard Incorporated (NYSE:MA) does not charge or collect interest, its association with credit activities was problematic.”
7. Avalanche
Avalanche is a decentralized blockchain platform that offers smart contracts compatibility. Avalanche follows a proof-of-stake consensus mechanism but is unique in the sense that it uses subsampled voting to validate transactions. This approach towards consensus allows Avalanche to execute 4,500 transactions per second, and the time it takes to finalize a transaction is clocked at 3 seconds. AVAX is the native cryptocurrency of the network.
This March, the Avalanche foundation announced that it will be putting up $290 million in funding to further the development of the Avalanche Multiverse. In addition to funding projects catering to DeFi applications, the Multiverse program will be working on Web3 gaming and non-fungible tokens.
The hype around the utility of blockchain is growing, with one of the most involved companies in the technology being Meta Platforms, Inc. (NASDAQ:FB). Investors have been bullish on Meta Platforms, Inc. (NASDAQ:FB) for over a decade now. As of the fourth quarter of 2021, 224 hedge funds held positions worth $31.8 billion in Meta Platforms, Inc. (NASDAQ:FB).
Here’s what Weitz Investment Management had to say about Meta Platforms, Inc. (NASDAQ:FB) in its fourth-quarter 2021 investor letter:
“A couple of other platform companies deserve a mention as well. Meta Platforms and Alphabet have both been under regulatory scrutiny that has affected their valuations. The threats of punitive action are real, but we have tried to be imaginative about how onerous any fines, rule changes or forced divestitures might be, and we believe that the fiveyear outlook for each is well above average under almost any scenario. So, we include these two in the list of the under-appreciated.”
6. Polkadot
Polkadot is another blockchain network that aims to solve the problem of interoperability in blockchain networks, but in a different way than Algorand. Fundamentally, Polkadot is just another proof-of-stake blockchain network but is different in operation due to its design of the main relay chain, that connects several different parachains. All parachains work towards validating transactions and achieving consensus. People who want to actively participate in the network can build a dedicated chain to complete a task, and these chains can be grouped and then be coordinated by a control-chain, or the central relay chain. DOT is the network’s native currency.
The normalization of coins like DOT has been made possible and is backed up by reputable software companies such as Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) has a bullish view on cryptocurrencies and blockchain technology revolutionizing the world. Insider Monkey identified 262 hedge funds that held stakes in Microsoft Corporation (NASDAQ:MSFT) by the close of the fourth quarter of 2021. The total stakes of these funds were in excess of $75.66 billion. This is compared to 250 positions in the prior quarter with stakes amounting to $65.87 billion.
Saturna Capital mentioned Microsoft Corporation (NASDAQ:MSFT) in its fourth-quarter 2021 investor letter. Here’s what the firm had to say about the tech-giant:
“Only two companies remain from 2010’s top 10 list: Apple and Microsoft. Going back to 2000, only Microsoft remains. We expect that Microsoft will maintain its position as the dominant global provider of personal and business software, while growing its cloud business and potentially being a key provider of augmented and mixed hardware and software.
US Technology companies have been the equity market’s biggest winners in recent years. Because of the Amana Income Fund’s objective of current income, many of these zero- or low-dividend companies do not suit the Fund’s mandate. One that does — Microsoft, which returned 46.03% for 2021 — was the Fund’s second biggest contributor to returns during the year. While Technology no doubt underpins much of the current economy and its future potential, Tech stocks have also benefited from low inflation, globalization, and valuations that are near historic highs. With globalization backsliding and inflation worries escalating, we believe companies in other industries with strong financial positions, competitive advantages, strong management, attractive dividend yields, and reasonable valuations can offer investors diversification in the context of equity markets increasingly concentrated in a handful of very large Technology firms.”
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Disclosure: None. 10 Cryptocurrencies Redditors Are Buying for Early Retirement is originally published on Insider Monkey.
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