In 2021, many cryptos delivered an outstanding performance that helped bolster the case for including them in mainstream investor portfolios. The crypto market started 2021 with a combined market capitalization (cap) of just $800 billion and ended the year at $2.25 trillion, almost tripling in total value.
However, 2022 has so far brought a bear market to the crypto space. Year-to-date (YTD), we have seen Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD), Cardano (CCC:ADA-USD), and Solana (CCC:SOL-USD) plunge over 20%, 30%, 20%, and 45%, respectively. It seems like cryptos have fallen prey to changes in market sentiment. This is particularly noticeable as moves by the Federal Reserve, in response to rising inflation, have had an outsized effect on the crypto market. Thus making the Fed, and inflation, leading market drivers.
Nevertheless, digital asset bulls are convinced that cryptos can once again outperform many equities. For instance, along with increasing institutional adoption, many expect Bitcoin to exceed $100,000 this year. They also seem almost certain about a strong altcoin rebound in the coming weeks as well.
Against this backdrop, here are seven of the best cryptos to buy for February:
Cryptos: AAVE (AAVE-USD)
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52-Week Range: $131.9 – $666.86
Aave is a decentralized finance (DeFi) platform that connects crypto borrowers and lenders directly without the hassle of going through an intermediary. As in traditional finance, the platform allows users to borrow various cryptocurrencies and lend digital assets in exchange for interest payments. There are currently more than 30 cryptocurrencies on the platform.
Stani Kulechov created the Aave project in 2017. The Aave Protocol was launched on the network in 2020, making it possible to use real funds on the platform.
Lenders are required to lock up their funds into a “liquidity pool” to lend cryptocurrencies. This pool utilizes a smart contract that helps to match lenders with borrowers without an intermediary. Borrowers can also use these liquidity pools for flash loans that take advantage of arbitrage opportunities across the crypto ecosystem.
AAVE-USD is the native coin that powers this platform. The altcoin is also a governance token, allowing users to vote on critical decisions that affect the daily operations of the platform.
In May 2021, AAVE-USD hit an all-time high of $666.86. Currently, it trades around $155, down about 40% YTD. Its market cap of $2 billion makes AAVE among the top 60 altcoins in the crypto market.
Chainlink (LINK-USD)
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52-Week Range: $13.42 – $52.88
Chainlink is a software platform that links blockchains with external data known as an “oracle.” Regular InvestorPlace.com readers would know that oracles allow a blockchain to receive data from off-chain systems and broadcast on-chain data to their non-blockchain associates. For instance, the oracle network can have a wide range of applications, such as the weather, election results, or stock market data.
The Chainlink protocol can operate on many various blockchains simultaneously. It offers incentives for participants to use Chainlink data in their smart contracts.
LINK-USD is the native cryptocurrency that powers the Chainlink platform. This ERC-20 token employs a proof-of-stake (PoS) consensus protocol. To receive LINK-USD token rewards, users are required to run their nodes, and provide data to smart contracts.
Chainlink has formed partnerships with Oracle (NYSE:ORCL) and Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud to facilitate verifiable transmission of on-chain and real-world data.
The altcoin reached an all-time high of $52.88 on May 10. Currently, it changes hands at $17.55, down 22% in the past year. YTD, the crypto is also down 15%. Its market cap of $8 billion makes Chainlink the 20th largest coin.
Cryptos: Decentraland (MANA-USD)
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52-Week Range: $0.145 – $5.9
Decentraland is a 3D virtual reality platform powered by the Ethereum blockchain. It’s widely regarded as a one of the first versions of the metaverse where users can create numerous buildings or businesses virtual casinos, art galleries, theme parks, concert halls, and charge others to visit them. The virtual world opened its doors to the public in February 2020.
This virtual space within Decentraland is called LAND, a non-fungible digital asset divided into 16m x 16m parcels. These parcels are purchased via MANA-USD, Decentraland’s native cryptocurrency token. Some parcels are also organized into Districts, themed communities that allow users to develop shared spaces.
MANA-USD is an ERC-20 token created via Ethereum smart contracts. In the Decentraland universe, players can buy or sell various in-game items such as avatar costumes using MANA-USD. Users need to burn an amount of MANA-USD each time they register and resell avatar names, sell LAND or wearables. Just as in real-life real estate, LAND prices depend primarily on location, with an average price of $3,000 up to $60,000.
MANA-USD hit an all-time high of $5.9 in late November. The meta coin currently hovers at $2.5 territory. Over the past year, MANA-USD is up 1500%. However, it has declined 20% YTD. Its market cap of $4.8 billion positions MANA-USD as the 31st largest crypto.
Monero (XMR-USD)
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52-Week Range: $132.61 – $517.62
Monero is a privacy-focused, censorship-resistant blockchain that enables anonymous transactions between its users. The platform is an open-source project maintained by a decentralized developer community. Monero uses the RandomX proof-of-work algorithm.
XMR-USD is the native cryptocurrency that powers the Monero network. Transactions in the digital currency are made anonymous and untraceable using “Ring Confidential Transactions.” This technology requires a multi-layered, anonymous group signature that allows for hidden origins, amounts, and destinations of transactions.
Monero also uses stealth addresses to further enhance user privacy. Stealth addresses are one-time, randomly generated addresses used by recipients to receive payments to conceal their unique addresses on the blockchain.
Aside from wallet addresses and transactions that limit traceability, privacy-focused features are supported by the XMR-USD token itself. Monero is a fungible token that makes it interchangeable and indistinguishable from other assets in the same class.
In May 2021, XMR price went on a bull run, hitting an all-time high of $517.62. Currently, Monero trades at $145, up 5% in the past year. However, it has declined 42% YTD. Its market cap of $2.6 billion makes Monero one of the largest 50 coins among digital assets.
Cryptos: Polygon (MATIC-USD)
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52-Week Range: $0.03626 – $2.92
Originally called the Matic Network, the Polygon Network allows developers to create blockchains that are compatible with the Ethereum blockchain, which is utilized to secure and settle transactions. The network aims to link different blockchain projects, which have distinct features and aren’t necessarily interoperable.
Polkadot (CCC:DOT-USD) and Cosmos (CCC:ATOM-USD) are two other blockchain projects that focus on solving a similar problem. Polygon aims to improve upon these projects by taking advantage of Ethereum’s mature ecosystem. In addition, popular DeFi projects such as SushiSwap (CCC:SUSHI-USD), Curve (CCC:CRV-USD), and Aave use Polygon to enhance scalability and increase network speed.
MATIC-USD is the native cryptocurrency that powers the platform. This altcoin was launched in 2019 via an initial exchange offering hosted on Binance’s Launchpad platform. Polygon uses the proof-of-stake consensus algorithm to secure the network and create new coins over time.
MATIC-USD’s price hit an all-time high of $2.92 in late December. Currently, the altcoin trades at $1.6, up 4,100% over the past year. Yet in 2022, the altcoin is down 37%. Polygon’s market cap of $12.1 billion makes Polygon the 14th largest coin.
Storj (STORJ-USD)
Source: storj.io
52-Week Range: $0.413 – $3.91
Storj is a decentralized cloud storage platform that utilizes blockchain technology to provide decentralized and encrypted cloud storage. Storj offers an alternative to centralized cloud storage platforms such as Amazon’s (NASDAQ:AMZN) Web Services or Google Cloud. The platform enables network participants to rent their hard drive space to others for storage.
The Storj platform operates on the Ethereum blockchain. When a customer uploads a file, that file is encrypted, split into smaller bits, and then distributed to multiple nodes within the Storj network. The file is afterward recompiled back together and retrieved upon request.
STORJ-USD is an ERC-20 token that powers the network. Users purchase cloud storage services using the STORJ-USD token, while network participants earn STORJ-USD as rewards for offering their unused hard drive space for storage.
In late March, STORJ-USD hit its all-time high of $3.91. Currently, it trades at $1.15, up more than 160% over the past year. But in January, the altcoin lost about 40%. Its market cap of $440 million currently positions Storj among the top 200 altcoins in the crypto market.
Cryptos: Waves (WAVES-USD)
Source: Shutterstock
52-Week Range: $6.41 – $41.33
Waves is an open-source blockchain platform for developing decentralized apps and blockchain processes that require high security. Users can rely on the platform to handle sensitive information related to finance, decentralized exchanges, blockchain-based games, and personal identification. The platform utilizes a modified proof-of-stake protocol referred to as Leased PoS.
WAVES-USD, native token that powers the network, offers a reward for every mined block. The platform employs a colored coins approach, allowing the development of new apps with their own customized coins, as iterations of the original version. In addition, waves allows for fixed-fee transactions without the need for hefty gas fees.
The network entered a partnership with Microsoft’s (NASDAQ:MSFT) Azure cloud-computing business and became the official partner of the well-known audit and consulting firm Deloitte.
WAVES-USD’s price hit an all-time high of $41.33 in May 2021. Currently, the altcoin changes hands for $9, up 39% in the past year. But this year, it already lost over 35%. Its market cap of $974 million positions Waves among the largest 90 cryptos.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.