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2 cryptocurrencies to buy now that a bull market has arrived
Since the start of 2023, the crypto asset class as a whole has more than doubled. By almost all accounts, the brutal cryptocurrency winter that lasted much of 2022 is thawing by the day.
So, as cryptocurrencies appear to be gearing up for another bull market run, a lucrative opportunity presents itself. Known for its huge gains, just a little bit of cryptocurrency can give your portfolio a nice boost. If you’re looking to increase your exposure to cryptocurrencies, look no further than these two gems.
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The original cryptocurrency
As the first cryptocurrency, Bitcoin(CRYPTO:BTC)’s veteran status has pushed it to become synonymous with the asset class. This pick won’t get any points for originality, but no cryptocurrency portfolio is complete without Bitcoin.
As it stands, Bitcoin makes up more than half the value of the entire cryptocurrency market. Recently crossing the $1 trillion mark, Bitcoin is the most valuable cryptocurrency and it’s not even close. The nearest neighbor is Ethereum (CRYPTO: ETH), with a market capitalization of approximately $350 billion today.
This overwhelming dominance means that most other cryptocurrencies are correlated to the price of Bitcoin. So when Bitcoin does well, it usually drags the rest of the market along with it.
As the cryptocurrency market continues to gain momentum, there are few better options than Bitcoin. It is the cryptocurrency with the longest track record and is also the most decentralized and secure. Indeed, in many ways, Bitcoin is the ultimate cryptocurrency, making it most deserving of a place in wallets as another bull market looms.
The DeFi champion
Similar to Bitcoin, no cryptocurrency portfolio is complete without exposure to Ethereum. While Bitcoin may have kicked off the cryptocurrency rush, Ethereum has taken the baton and changed the rules of the game. When Ethereum launched in 2015, it was the first blockchain with smart contract functionality.
With these smart contracts, Ethereum became the first programmable blockchain where developers could create custom applications that transferred money when preset parameters were met. This functionality ultimately paved the way for the thriving digital economy known today as decentralized finance (DeFi).
As one of the most innovative and popular uses of blockchain technology, DeFi is a multifaceted economy filled with non-fungible tokens (NFTs), stablecoins, yield farming, and much more. And none of this would have been possible without Ethereum smart contracts.
Since the arrival of Ethereum, new smart contract blockchains have been launched. However, although other DeFi-friendly cryptocurrencies exist today, Ethereum still dominates. According to the latest calculations, Ethereum makes up nearly 60% of the $65 billion DeFi economy.
The story continues
Again, Ethereum won’t give me any points for originality, but it remains the simplest and most direct means of gaining exposure to the burgeoning DeFi sector of cryptocurrencies. As prospects for a bull market grow, Ethereum’s dominance over DeFi makes it an ideal option for investors.
Final thoughts to keep in mind
There are thousands of cryptocurrencies on the market today. And the fact of the matter is that a considerable number of them could outperform Bitcoin and Ethereum. This is natural during bull markets as smaller, more obscure cryptocurrencies tend to fly by on pure speculation. But the reality is that these cryptocurrencies carry much more risk, and many may not even make it to the next bull market if they fall as quickly as they rose.
While new cryptocurrencies may appear more glamorous or promise life-changing gains, these options carry exponentially greater risks. For investors looking for a proven and reliable strategy while also appreciating what a cryptocurrency bull market has to offer, Bitcoin and Ethereum should do the job.
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RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool has positions and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
2 cryptocurrencies to buy now that a bull market has arrived was originally published by The Motley Fool