In this article, we discuss the 10 cryptocurrencies Redditors are buying for 2022 and beyond.
The crypto industry had an eventful 2021, topping $3 trillion in market capitalization for a brief period and witnessing the adoption of Bitcoin as legal tender in El Salvador, marking a key milestone in the mainstreaming of blockchain technology. The year also saw the rise of “meme coins” and calls for tighter regulations on the crypto industry. The two most powerful economies in the world dealt with the industry in contrasting styles. China effectively banned the use of crypto in late summer while US officials categorically dismissed pleas to follow suit.
Looking ahead into 2022, it is likely that regulatory scrutiny on the crypto world will increase this year. The passage of the Biden Infrastructure Plan includes provisions related to taxing crypto transactions, effectively increasing IRS authority on the matter. In October last year, the first crypto ETF began trading as well. In 2022, more could follow suit, increasing investor exposure to the new technology. Hedge funds have been slowly increasing their crypto exposure as well to keep with the times.
Even though direct investments in crypto are likely to increase in 2022, investors who are still skeptical of blockchain can invest in conventional businesses with exposure to crypto to ride the fintech wave. Some of the top stocks to consider in this regard include NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), among others discussed in detail below.
Our Methodology
These were picked from a careful assessment of comments published on different Reddit forums over the past twenty-four hours. The details of each cryptocurrency are mentioned alongside a discussion around top companies working in the sector to provide readers with some context for their investment decisions.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
High Risk, High Reward Cryptocurrencies to Buy According to Reddit
10. Helium
Helium is a cryptocurrency that is used to power a network of internet-enabled devices that act as hotspots for a decentralized wireless infrastructure. Helium is earned when hotspots provide wireless coverage and transfer data over the network. The Helium network is different from other blockchain-based wireless solutions since it uses a proof-of-coverage consensus to validate hotspots. The Helium currency stands to benefit from the shift towards the third generation of internet services dubbed Web 3.0 with an emphasis on decentralization.
The wider acceptance of currencies like Helium has been made possible by companies like Visa Inc. (NYSE:V), a payments firm headquartered in California. Visa Inc. (NYSE:V) recently launched a cryptocurrency advisory service for clients and merchant accounts.
Crypto initiatives from firms like Visa Inc. (NYSE:V) are important because they increase public confidence in the new technology. Even hedge funds have been bullish on Visa Inc. (NYSE:V) as the payments firm mainstreams blockchain. At the end of the third quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $26 billion in Visa Inc. (NYSE:V).
Just like NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V) is one of the stocks on the radar of institutional investors.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”
9. Flux
Flux is a cryptocurrency that is useful for those who want to operate in a decentralized world. The Flux network makes this possible by offering support for applications and projects, such as cloud infrastructure, on a decentralized operating system that can be used to build a new version of the internet. The Flux network provides Blockchain-as-a-Service solutions as well, comparable to the Software-as-a-Service solutions. Redditors have been buying the Flux coin and betting that decentralized applications will revolutionize the internet in the coming years.
Jack Dorsey, the chief of Square, Inc. (NYSE:SQ), a digital payments firm, has backed coins like Flux to succeed and embodies the Redditor spirit towards blockchain. Square, Inc. (NYSE:SQ) has been one of the largest cheerleaders of the new technology. Even though Square, Inc. (NYSE:SQ) stock has been volatile over the past few months due to aggressive bets on crypto, hedge funds still seem largely positive on the overall financial health of the firm.
In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Square, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown
from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.
We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”
8. Filecoin
Filecoin is the cryptocurrency used by the Filecoin network, a cooperative digital storage and data retrieval method. The network offers users the ability to store many forms of data, including audio, video, images, and text. In the long-term, the network aims to store sensitive information, like ownership and financial records, as well. Redditors have been backing the coin to succeed as an alternative to centralized cloud storage. One of the most innovative storage solutions offered by the network includes the ability to let users rent unused hard drive space.
Companies like PayPal Holdings, Inc. (NASDAQ😛YPL), a California-based financial technology platform, have slowly integrated crypto like Filecoin onto the digital payments ecosystem. Hedge funds are one of the biggest backers of PayPal Holdings, Inc. (NASDAQ😛YPL), an indirect indication of the future power of crypto. At the end of September, 123 hedge funds in the database of Insider Monkey were long PayPal Holdings, Inc. (NASDAQ😛YPL) with stakes worth $12.8 billion.
In its Q4 2020 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ😛YPL) was one of them. Here is what the fund said:
“For the full year 2020, one of the top performers was PayPal, which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”
7. Polkadot
Polkadot is one of the most popular cryptocurrencies on the market. One of the key differences between Polkadot and other coins, and one of the main reasons why Redditors prefer this coin over countless others, is the low fees and higher speeds that the Polkadot network offers when compared to other cryptocurrencies. Apart from Ethereum, the second most popular coin, Polkadot is perhaps the best of the rest when it comes to scalability. As such, it is expected to jump in value over the next few months as the use of crypto increases.
The position of Polkadot in the cryptoverse is not unlike the position of Microsoft Corporation (NASDAQ:MSFT), the software firm based in Washington, in the technology universe. Microsoft Corporation (NASDAQ:MSFT) has backed the crypto revolution over the past decade and looks set to benefit from the increased adoption of digital coins. Microsoft Corporation (NASDAQ:MSFT) has important backers, including Fisher Asset Management that holds 24.8 million shares worth more than $6.7 billion in the company.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
6. Livepeer
Internet streaming has exploded in popularity over the past few years, gaining hundreds of millions of paid subscribers. Livepeer, a cryptocurrency used by the Livepeer network, stands to benefit as users shift towards decentralized services. Livepeer runs a decentralized video streaming network. One of the advantages of using the Livepeer network, compared to traditional streaming services, is that it offers cost-effective and secure services. Livepeer aims to handle the streaming demand on the third generation of internet services.
The second generation of internet services, defined by the “social” craze, saw Meta Platforms, Inc. (NASDAQ:FB), the technology company that owns some of the largest social media platforms in the world, become perhaps the most powerful firm on the planet. Meta Platforms, Inc. (NASDAQ:FB) has invested heavily in crypto as it transitions to the metaverse. Hedge funds are bullish on Meta Platforms, Inc. (NASDAQ:FB) and 248 funds held stakes in the company at the end of the third quarter of 2021. The combined worth of these stakes was over $38 billion.
Alongside NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB) is one of the stocks that elite investors are buying.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
5. Solana
Solana is a cryptocurrency that is often described as a rival to Ethereum. This is because the Solana network, which uses the Solana coin, has fast transaction speeds and offers lower associated costs when compared to other popular coins. The Solana network is supporting a diverse range of projects spanning DeFi, NFTs, Web3 and others as it increases in importance for blockchain enthusiasts. Redditors have also been piling into the coin as investments in NFTs and DeFi applications increase.
Solana offers speeds of 50,000 transactions per second, a unique offering that has propelled the network to become the sixth-largest in the cryptoverse in terms of market capitalization. The network uses a proof of stake and proof of history consensus mechanism to achieve greater speeds, another differentiating characteristic when compared to other coins.
4. Binance Coin
Binance Coin is another alternative investment to Bitcoin and Ethereum that Redditors love. The coin is the native currency of the Binance cryptocurrency exchange, one of the largest crypto exchanges in the world in terms of volume of transactions. It is the third largest coin by market capitalization even though the transaction fees of the Binance exchange are some of the lowest in the world. Although the coin was initially based in China, it has since moved out of the Asian country as Beijing tightens control over crypto firms.
In 2021, the Binance Coin gained 1,300%, outperforming Bitcoin and Ethereum, which increased in value by 408% and 65% during the period. One of the reasons the coin gained in popularity was the increase in investments in altcoins because of a market crash that saw the prices of Bitcoin and Ethereum drop dramatically. The strong association of Binance with GameFi and the metaverse also helped it outperform other coins.
3. Ripple
Ripple is the cryptocurrency used by the Ripple network, a blockchain used by hundreds of banks around the world already. The Ripple network offers secure, fast, and cheap cross-border payment options. The coin was first released in 2012 and has now become one of the most popular across the world with a market capitalization of over $40 billion. One of the primary uses of the Ripple network is to facilitate rapid conversion between different currencies. As the gig economy takes off, the Ripple coin could increase in value dramatically.
Compared to traditional banks, which take days or weeks to handle large transactions, the Ripple network manages big payments within seconds. It also charges a low fee of 0.00001 Ripple for a standard transaction. The currency has thus become a favorite among Redditors who have been buying it for 2022.
2. Ethereum
Ethereum is the second-largest coin by market capitalization. Even though the coin is presently cheaper to Bitcoin, analysts expect it to outperform Bitcoin in the long run. This is because it offers faster speeds compared to Bitcoin and the mining methods for it are less damaging to the environment as well since they consume less power. Developers of the currency are working to increase the transaction speeds on the network. The aim is to increase speeds from 15 transactions per second to tens of thousands transactions per second.
These changes could come into force by 2022, which is one reason why Redditors are investing in the Ethereum network. The consensus mechanism for the network is also in the process of transition from proof-of-work to proof-of-stake. The Ethereum coin was developed by Vitalik Buterin, a Russian-Canadian computer programmer.
1. Bitcoin
Bitcoin is the most popular and expensive cryptocurrency on the market. Despite concerns around energy-intensive mining methods, the coin performed better than most other established coins on the market. Bitcoin was launched in 2008 and has over the years become the brand name most associated with the crypto world. As such, Redditors are buying the coin ahead for 2022 and beyond to benefit from the increased interest in crypto in general. It was developed by Satoshi Nakamoto.
Bitcoin uses a peer-to-peer technology to facilitate instant payments. Bitcoin is not backed by governments or central banks but is being exchanged for other currencies, a fact that speaks volumes about the future potential of the coin. Some investors have even said that the coin is a better hedge against inflation than gold.
InsiderMonkey
