Bull market or not, these 2 cryptocurrencies are worth the detour

Illustration of bull and bear

Written by Chris MacDonald at The Motley Fool Canada

It’s been a tough year for cryptocurrency investors, of course. And despite a rather impressive rebound in recent weeks, the overall market remains around 60% below its peak reached at the end of last year.

With calls for another bull market driving positive sentiment in this sector, many investors are now looking to return. After all, given the drop we’ve seen, most tokens are much more attractively valued than they have been in some time.

That said, with the macro backdrop continuing to provide headwinds, investors could remain on the fence. Here’s why I think investors might want to consider Polygon (CRYPTO:MATIC) and Solana (CRYPTO:SOL) right now, whether we are in a bull market or not.

Top cryptocurrencies to buy: Polygon

The Polygon blockchain scaling solution is among the tokens targeted by many investors. That’s because a lot of the positive sentiment around Polygon is tied to the highly anticipated Ethereum merger scheduled for next month.

Given how intertwined these two projects are, it’s clear that investors want to add exposure (direct or indirect) to the Ethereum ecosystem. As a result, despite a significant decline from its high, Polygon has seen strong momentum since its June lows. From its lows this year, MATIC is up almost 200%.

These are decent gains.

However, looking to the future, investors have a lot to love about Ethereum’s move to proof-of-stake and what that may mean for scaling solutions like Polygon. The more people use Ethereum, the more Polygon will benefit. And while Ethereum’s efficiency is likely to increase, Polygon and its lower-cost options will likely continue to be needed by average consumers.

Solana

Solana has certainly been one of the most volatile large-cap tokens over the past year. After hitting incredible heights last year, Solana has since plummeted dramatically from her peak. Currently, this token is trading at a discount of nearly 85% from its peak. This also reflects the recent strong price performance with this token.

A competitor to Ethereum, Solana has garnered interest due to this network’s unique consensus mechanism. By using what is called proof of history, Solana was able to deliver high throughput at extremely low costs. For those in the non-fungible token or decentralized finance space, this turned out to be a great innovation.

However, network outages and slowdowns have caused concern among many investors. Indeed, when speed and cost improvements come at the expense of stability, some eyebrows will be raised. That said, in the long run, those looking for an Ethereum-like option with strong upside growth may want to consider Solana. On the contrary, such a position in combination with an Ethereum stake could be considered as a kind of hedging.

The post Bull Market or Not, These 2 Cryptocurrencies Are Worth a Look appeared first on The Motley Fool Canada.

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Dumb contributor Chris MacDonald has positions in Ethereum and Solana. The Motley Fool recommends Ethereum, Polygon, and Solana.

2022

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