Advertisem*nt
Ask a Crypto Expert
By Jeremy Koven on September 14, 2022
Estimated reading time: 4 minutes
Sponsored By
CoinSmart
By Jeremy Koven on September 14, 2022
Estimated reading time: 4 minutes
Investors can choose from thousands of crypto coins, but only a fraction will endure. We look at the factors that could give cryptocurrencies staying power.
Advertisem*nt
![Which cryptos will survive in the long term? - MoneySense (2) Which cryptos will survive in the long term? - MoneySense (2)](https://i0.wp.com/www.moneysense.ca/wp-content/uploads/2022/07/CoinSmart-which-cryptos-will-survive-900x550.jpg)
Photo by Quantitatives from Unsplash
I want to invest in crypto, but I’m worried about its long-term prospects since it’s not widely used as currency. When do you think we’ll be using crypto like cash, and which cryptocurrencies are mostly likely to survive?
—Denise
Advertisem*nt
Advertisem*nt
Which crypto should I buy today for the long term?
Denise, thanks for your question. You’ve brought up a lot of interesting things—let’s tackle them one by one.
You’re right, so far, people don’t like using cryptocurrencies as currency because nobody wants to be the next “pizza guy.” (You may have heard about him—he bought two pizzas for 10,000 bitcoin (BTC) back in 2010. That amount would be worth over $270 million today.) As such, the primary utility of crypto like bitcoin is as a store of value. Usually, for payments, people tend to use stablecoins like USD coin (USDC) and tether (USDT), which are pegged 1:1 to fiat money.
Having said that, bitcoin has become legal tender in two countries, El Salvador and the Central African Republic (CAR). In these places, you can pretty much use BTC as cash. A few other countries—Cuba, Panama, Paraguay and Ukraine—have also made moves towards adopting crypto as legal tender, to avoid hyperinflation and the crippling effects of dollarization (the use of a foreign currency alongside domestic currency).
Plus, companies are increasingly accepting BTC and other cryptocurrencies as payment. Recently, Shopify—one of the world’s largest e-commerce platforms—enabled its merchants to accept crypto payments. According to a December 2021 Deloitte survey, nearly 75% of U.S. retailers were planning to accept crypto payments within the next 24 months.
Buying NFTs with crypto
Now, let’s look at Ethereum, Solana and other smart-contract platforms. These platforms host non-fungible token (NFT) projects and marketplaces. The only way to buy the NFTs is with the platforms’ native coins: ETH, SOL, etc. In this situation, you are using crypto as cash to buy cool digital artworks and more.
So, to answer your question: Crypto’s use as cash isn’t widespread. It is primarily used as a value store or wealth-building asset. However, the number of scenarios where you can use them as cash is steadily increasing.
Which cryptocurrencies will survive?
This question is a bit trickier to answer.
Tried-and-tested “blue-chip” cryptos like BTC and ETH are the most likely to survive in the long run. At this point, it’s hard to say anything certain about the rest. Terra had a very vibrant ecosystem and a wonderful community, but it failed spectacularly in a matter of days. So, all I can say is: When you look at a crypto project, look at its utility and tokenomics. Here’s what I mean:
Advertisem*nt
Advertisem*nt
- Utility: How much activity is happening on the blockchain?
- Tokenomics: Is the blockchain’s native token useful? How many roles is the token fulfilling within the ecosystem? The more roles it fulfills, the more robust it is. For example, on the Ethereum platform, ETH is a payment token, it’s used to pay gas fees (transaction fees), it can be staked, it can be used to buy NFTs, and you need it to access decentralized finance (DeFi) apps, it’s a store of value, etc.
New crypto projects pop up every day. Most of them aren’t going to survive, and those that do may experience extreme volatility. Make sure you understand a project and its risks before investing your hard-earned money. Always DYOR—Do Your Own Research.
![Which cryptos will survive in the long term? - MoneySense (3) Which cryptos will survive in the long term? - MoneySense (3)](https://i0.wp.com/www.moneysense.ca/wp-content/uploads/2022/06/CoinSmart-Jeremy-Koven-768x768.jpeg)
Jeremy Koven is the Chief Operating Officer and a co-founder of CoinSmart, a Canadian cryptocurrency trading platform.Sign up for an account* with the codemoney30and receive CAD$30in bitcoin when you deposit a minimum of CAD$100.
Watch: Altcoins vs. Bitcoin
Have a question? Ask a crypto expertSEND EMAIL
Read more about crypto:
- Watch: 10 cryptocurrencies you need to know about
- How long should you hold a cryptocurrency investment?
- DeFi vs. NFTs: Which should you invest in?
- Trading tools that can raise your crypto game
This article is sponsored.
This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers.
What does the * mean?
Affiliate (monetized) links can sometimes result in a payment to MoneySense (owned by Ratehub Inc.), which helps our website stay free to our users. If a link has an asterisk (*) or is labelled as “Featured,” it is an affiliate link. If a link is labelled as “Sponsored,” it is a paid placement, which may or may not have an affiliate link. Our editorial content will never be influenced by these links. We are committed to looking at all available products in the market. Where a product ranks in our article, and whether or not it’s included in the first place, is never driven by compensation. For more details, read our MoneySense Monetization policy.
Comments
Advertisem*nt
Related Articles
Ask a Planner
Should you claim your common-law partner on your taxes?
Changing your status to common-law has an impact on your tax return and government benefits. Here’s how to know...
Should you claim your common-law partner on your taxes?
Investing
Making sense of the markets this week: March 24, 2024
Inflation falls, Fedex jumps 13%, earnings soften for Power Corp and Couche-Tard, and S&P 500 gets two new members.
Making sense of the markets this week: March 24, 2024
Retired Money
How to cope with the RRSP-to-RRIF deadline in your early 70s
You don’t want to miss the conversion deadline at the end of the year you turn 71—you’ll be on...
How to cope with the RRSP-to-RRIF deadline in your early 70s
Retirement
Planning for retirement with little or no savings to draw on
Presented By
National Bank of Canada
Planning for retirement with little or no savings to draw on
Ask a Planner
“Where do we pay income tax if we retire abroad?”
Presented By
National Bank of Canada
“Where do we pay income tax if we retire abroad?”
Ask a Planner
What new bare trust tax filing rules mean for Canadians
Many more Canadians will have to file a trust tax return this year than in the past. What is...
What new bare trust tax filing rules mean for Canadians
Investing
Making sense of the markets this week: March 17, 2024
Oracle shares up 13%, Reddit’s unique IPO, Canadians are gloomier than most on world economic prospects, and Japan’s stock...
Making sense of the markets this week: March 17, 2024
My MoneySense
Taking risks and trusting your gut: Julie Barlow’s self-employment tips
The long-time freelancer and co-author of Going Solo shares advice for Canadians who want to start a business or...
Taking risks and trusting your gut: Julie Barlow’s self-employment tips
News
Making sense of the Bank of Canada interest rate decision on March 6, 2024
Fifth time’s the charm for the Bank of Canada? Yet another rate hold spells relief for some, stagnancy for...
Making sense of the Bank of Canada interest rate decision on March 6, 2024
Retirement
RRIF and LIF withdrawal rates: Everything you need to know
Most registered retirement savings plans are eventually converted to registered retirement income funds. Here’s what to know about RRIF...
RRIF and LIF withdrawal rates: Everything you need to know