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Cryptocurrency miners are under pressure today. Three of the largest crypto miners, Marathon Digital Holdings ( MARA -15.14% ), Riot Blockchain ( RIOT -13.13% ), and Hive Blockchain ( HIVE -9.33% ) are all down more than 8% as of 2 p.m. ET.

Today's marked decline in the crypto mining sector appears to be a direct result of strong regulatory headwinds. Up to now, most of these have come out of China and India. However, it appears U.S. regulators are increasingly looking at crypto mining, from an environmental and sustainability perspective.

Putting investors on edge today are reports that Sen. Elizabeth Warren sent a letter to Greenidge Generation Holdings CEO Jeff Kirt asking for information on the climate change impact of crypto mining.

Image source: Getty Images.

So what

Crypto mining is extremely energy intensive. Many of the major cryptocurrency blockchain networks require what's known as a proof-of-work consensus mechanism to validate blocks on the blockchain and secure the network. These require heavy computing power to solve difficult mathematical problems. Some of the largest crypto networks, including those of Bitcoin, Ethereum, and Litecoin, use proof-of-work protocols.

Just how much energy is used to mine crypto? 

Well, Bitcoin mining alone accounts for more than 0.5% of the world's electricity usage, much larger than many small countries. Given the fact that crypto mining requires large amounts of electricity, crypto miners have come under pressure, in countries like China specifically, for using the cheapest electricity possible (usually derived from coal-powered plants). The U.S. appears to be coming to a similar conclusion on the topic, questioning the viability of crypto mining from an environmental standpoint.

Now what

Many alt coins and "newer" blockchain networks are being built with proof-of-stake consensus mechanisms. These allow for blocks to be verified via token holders staking their tokens to become validators and secure the blockchain. Essentially, this cuts down on the energy usage needed to run networks, providing a more sustainable alternative to the existing validation models. Notably, Ethereum is making a move toward proof of stake with its Ethereum 2.0 update.

However, in its current state, the crypto mining sector is one that's a power-guzzler. This is one of the key reasons why the crypto sector has caught the attention of regulators once again.

This current U.S. administration has already shown an affinity toward regulating the crypto sector, from a taxation standpoint, to support infrastructure spending. That said, additional regulations related to reducing the environmental impact of crypto mining could be the next step for this largely unregulated sector. Accordingly, investors in crypto miners are on watch today.

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PolkadotMarket Cap$0Today's Change(-3.15%) -$0.93Current Price$28.54What happened

Early Saturday morning, crypto markets plunged, with mega-cap cryptocurrencies Bitcoin and Ethereum losing altitude quickly, crashing by double-digit percentages in less than an hour.

This led to a market-based sell-off, which included top web3 and DeFi cryptocurrency, Polkadot ( DOT -3.15% ). As of 11pm ET, Polkadot had lost 9.8% of its value, over the past 24 hours.

Image source: Getty Images.

So what 

Polkadot's decline on Saturday generally fell in line with the broader market move. That said, Polkadot did recover approximately 17% from its lows at the time of writing, indicating strong investor support for this web3 cryptocurrency.

Polkadot got its start as a flagship project by the Web3 Foundation, with a focus on becoming a revolutionary blockchain technology aimed at interoperability, scalability, and improved security. For those banking on the future of a fully decentralized internet with the potential for a fully integrated suite of decentralized finance applications built atop this infrastructure, Polkadot remains a top cryptocurrency right now.

Now what

Despite today's impressive decline, Polkadot remains the ninth-largest cryptocurrency by market capitalization, for a reason. Investors looking for blockchain projects with truly innovative potential to drive what could be the future of the internet have reason to like how Polkadot is positioned right now.

Accordingly, this dip could be one long-term investors may want to consider buying with Polkadot. Of course, the crypto world is one that's historically been extremely volatile. That's not likely to change any time soon. However, the risk-reward upside with Polkadot does look attractive right now.

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In what was a generally positive day for cryptocurrencies overall, Polkadot ( DOT 1.79% ) fell 1.2% over the last 24 hours as of this writing. In the last five days, the crypto is down 5.5% as the coronavirus omicron variant has markets in risk-off mode (at least temporarily).

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So what

Polkadot was designed to tackle some pretty big problems with web 3.0, the next phase of web evolution (like further decentralization and more high-quality use cases for the internet, which as of late are tied to the buzzword "metaverse"). Polkadot uses a "heterogeneous multichain framework," basically meaning it was designed to connect different blockchain technologies and make them interoperable.

Given there are thousands of different cryptos out there, this is an impressive value proposition for Polkadot. It can also process transactions very quickly, which is going to give it a potential edge over Ethereum ( ETH 2.13% ), at least before Ethereum 2.0 is fully rolled out next summer.

Back in October, the final phase of Polkadot's multiphase launch known as "parachains" were released, adding support for specialized blockchains and use cases to be built atop the Polkadot platform. Paired with Meta Platform's ( FB -0.07% ) clear signal that it will be betting big on the metaverse, Polkadot went on a tear in October through early November. Though now down some 50% from its peak, the crypto is still up an incredible 560% in the last year.

Now what

It's still early days for Polkadot, the broader cryptocurrency space, and web 3.0 in general. All assets with big potential like Polkadot represent potentially big payoffs if they pan out, but ample risk comes with that potential. This crypto has big ambitions, but there's competition, most notably the second-largest digital currency around Ethereum.

Nevertheless, interest in Polkadot is still on the rise. Even as the value has declined in the last month, the number of Polkadot stakers (those using their ownership to validate transactions on the blockchain and earn rewards) has continued to climb. Currently, about 53% of available tokens are being staked. Polkadot's ideal staking rate is 50%, and anything above that reduces the rewards (currently estimated at a nearly 14% annualized return before commissions and other costs) paid to owners who are staking.

Even so, bear in mind this young crypto will offer a very wild ride. Invest accordingly, if you choose to do so at all.

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As things stand now, it'll be another solid year for the stock market. Through the end of November, the broad-based S&P 500 had gained 22% for the year, which doubles up its average annual total return of the previous 40 years.

But it's been an even more impressive year for Bitcoin (CRYPTO:BTC), the world's largest cryptocurrency. As of early evening Nov. 30, Bitcoin had gained 97% on a year-to-date basis. Though this actually lags its average annual return over the past decade, I highly doubt its long-term investors are putting up much of a fuss.

Image source: Getty Images.

Bitcoin's impressive 2021 has come on the back on the back of a number of catalysts. In no particular order, we've witnessed:

Increased real-world utility, with El Salvador accepting it as legal tender and Tesla Motors briefly taking it as payment for its electric vehicles.The long-awaited Taproot upgrade take effect, which now allows for smart-contract-based transactions on Bitcoin's blockchain and further beefs-up security.Investors piling into Bitcoin as an inflationary hedge. With a limit of 21 million tokens, the perception of scarcity has hodlers viewing it as a store of value with U.S. inflation hitting a three-decade high.The listing of the first-ever Bitcoin exchange-traded fund (ETF), which is providing additional legitimacy that the world's biggest digital currency is here to stay.

Yet, for as impressive as Bitcoin's gains have been in 2021, the leading digital token's year-to-date performance has seriously lagged a number of other popular coins. The following five cryptocurrencies all absolutely ran circles around Bitcoin through the first 11 months of 2021.

Shiba Inu-themed coins have rocketed higher in 2021. Image source: Getty Images.

Shiba Inu: 65,684,832% year-to-date gain

Let's not beat around the bush: Shiba Inu's (CRYPTO:SHIB) absurd year-to-date gain of more than 65,600,000% may go down as the single biggest life-altering increase we'll ever see in one years' time.

It's had a number of factors play a role in its liftoff to the moon, such as a growing number of crypto exchanges listing SHIB for trading, the launch of decentralized exchange ShibaSwap in July, and landing movie theater chain AMC Entertainment as its first major merchant. But the biggest catalysts of all have undoubtedly been the fear of missing out (FOMO) and the immense social media buzz created by the SHIBArmy.

While there's no denying that pocket change has made early Shiba Inu investors rich in 2021, there's also plenty of reason to believe this bubble will burst in the months and years that lie ahead. Shiba Inu doesn't offer any competitive advantages over other payment coins, and it's not been well-received by businesses, with fewer than 375 merchants accepting it for payment worldwide, per Cryptwerk.

What's more, history has shown that moonshot gains in the crypto space are pretty much always met with reversions of 90% or greater in a short time frame.

Image source: Getty Images.

The Sandbox: 18,599% year-to-date gain

Another digital currency that came out of nowhere to leave Bitcoin in the dust (or perhaps I should say in the sand?) is The Sandbox (CRYPTO:SAND). SAND tokens have catapulted from under $0.04, as of Jan. 1, to close to $7, as of Nov. 30, resulting in a year-to-date gain of almost 18,600%.

These big gains are the result of some of the buzziest keywords of 2021: "metaverse" and "non-fungible token," or NFT. The metaverse describes an evolution of the internet that allows users to interact in a 3-D environment. Meanwhile, NFTs provide irrefutable proof of ownership for digital assets, which are stored on blockchain.

The Sandbox is a virtual world built on the Ethereum blockchain that allows developers to monetize their creations. The key here is that, unlike traditional game development, developers would retain ownership of their assets as NFTs. These NFTs could be monetized in The Sandbox's marketplace, or potentially incorporated within the created game.

A nearly 18,600% gain shows how much excitement there is surrounding the metaverse and NFTs. However, it's uncertain if SAND, the primary token of the platform, has a viable future at this point.

Image source: Getty Images.

Solana: 12,965% year-to-date gain

Solana (CRYPTO:SOL), which has skyrocketed almost 13,000% in 2021 to become the fifth-largest digital currency by market value, has also run circles around Bitcoin.

The tangible excitement surrounding Solana has everything to do with the speed and scalability of its blockchain network. For example, prior to the Taproot upgrade, Bitcoin was only capable of processing about 7 transactions per second (TPS). Comparatively, Solana has the capacity to handle 50,000 TPS. That's higher than leading payment processing companies.

It should be noted that, not only is Solana fast, it's considerably cheaper than Bitcoin. The typical Solana transaction costs about $0.00025. In short, a user wouldn't tally $1 in fees until they hit approximately 4,000 transactions on the Solana blockchain.

But it's the scalability of Solana that's most exciting. Solana's competitive edge is its proof-of-history (PoH) protocol. With PoH, a record is established of the time that's elapsed between events. Since validators don't have to talk to each other to determine this time frame, it dramatically speeds up the network and should allow for rapid scaling.

Image source: Getty Images.

Dogecoin: 4,321% year-to-date gain

Shiba Inu wasn't the only dog-inspired meme coin that fetched its hodlers a huge return in 2021. Even though Dogecoin (CRYPTO:DOGE) has pulled back considerably from its May high, DOGE tokens are still up by more than 4,300% this year.

Whereas Solana offers clear-cut differentiation and competitive advantages, Dogecoin's move has been inspired mostly by social media hype and intangible factors. For example, Tesla CEO Elon Musk, who does own Dogecoin tokens and refers to himself as the "Dogefather," has been known to post Shiba Inu-themed tweets that whipsaw dog-themed cryptocurrencies. With the exception of Musk tweeting that he'd be working with Dogecoin's developers to improve the network, nothing the world's richest person has tweeted about DOGE should have any bearing on its utility or network efficiency.

Speaking of which, Dogecoin might be even more of a dud than Shiba Inu in the utility department. Although close to 2,000 merchants accept DOGE for payment, according to Cryptwerk, it's taken eight years just to reach this figure. For context, there are more than 32 million businesses in the U.S. and over 500 million entrepreneurs worldwide.

Aside from menial utility, Dogecoin's transaction fees are higher than most other popular digital currencies, and the average number of transactions on its blockchain recently hit a three-year low in September. The hype surrounding DOGE appears to be dying down.

Image source: Getty Images.

Cardano: 788% year-to-date gain

A fifth and final popular cryptocurrency that ran circles around Bitcoin in 2021 is Cardano (CRYPTO:ADA). Despite a nearly 50% retracement from its early September high, Cardano has gained close to 800% this year and become the sixth-largest crypto by market value ($52.1 billion).

Similar to Solana, speed and transparent innovation are the driving forces behind a substantially higher price for the ADA token on Cardano's blockchain.

Last year, the Shelley upgrade increased the number of nodes network participants could run, which subsequently lifted daily average transactions on the network from around 2,000 to more than 100,000. The buzz in 2021 was the much-anticipated Goguen upgrade. Goguen introduced smart contracts to Cardano's blockchain, which allows for the development of financial and nonfinancial decentralized applications.

The next blockbuster upgrade will be Hydra, albeit there's no set timetable for its implementation. Hydra will continue using the main blockchain for ledger settlements, but intends to process transactions at off-chain staking pools, known as Hydra nodes, to increase speed and rapidly scale the network.

Cardano and Solana appear to have staying power after their monstrous gains this year. Meanwhile, the jury on Shiba Inu, Dogecoin, and The Sandbox is still out.

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PolygonMarket Cap$0Today's Change(-19.64%) -$0.45Current Price$1.82What happened

Cryptocurrency Polygon ( MATIC -19.64% ) charged sharply higher Friday, jumping as much as 14.9%. As of 5:36 p.m. ET, the token has gained 10.6% over the preceding 24 hours. This marked a sharp contrast to many high-profile cryptocurrencies, many of which were in the red.

Several pieces of positive news, pointing to greater expansion and utility, helped fuel the cryptocurrency's rise.

So what

21Shares, an issuer of crypto exchange-traded products (ETPs), announced that it would list the first product tied to the performance of Polygon on Euronext exchanges in both Paris and Amsterdam. The ETP will track Polygon's MATIC token. 

Image source: Getty Images.

This comes just weeks after 21Shares launched Europe's first Polygon ETP, which debuted on the SIX Swiss Exchange. 

Furthermore, Aurox, a cryptocurrency trading platform focused on decentralized finance (DeFi), plans to introduce a lending platform on Polygon. Aurox Lend, which will be deeply integrated on the Polygon chain, will facilitate more efficient token transactions while providing much greater liquidity, solving several issues associated with DeFi lending and margin trading. Aurox also expects to offer a higher interest rate on Ethereum ( ETH -6.85% ) deposits. 

Now what

Polygon's layer 2 blockchain project runs on top of Ethereum blockchain. It is a scaling platform that was developed to help reduce bottlenecks on the Ethereum network, which has long suffered from congestion and high fees. Polygon alleviates these issues by speeding up transactions and making it more efficient.

This combination of high speed and low transaction costs has attracted a growing number of developers to the platform. As a result, more than 3,000 apps now reside on Polygon, according to data supplied by blockchain development platform Alchemy. 

Polygon's adoption shows no sign of slowing. Back in July, it introduced a $100 million fund aimed at supporting projects that pair non-fungible token (NFT) and gaming projects with blockchain technology.

The combination of a growing developer base and wider worldwide access to ETPs tracking the MATIC token's performance will no doubt help boost Polygon's already impressive beachhead in the space. 

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BitcoinMarket Cap$0Today's Change(0.57%) $283.00Current Price$49,532.00

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What happened?

The cryptocurrency market had a rude awakening on Saturday as major cryptocurrencies fell over 20% briefly. As of 1:20 p.m. ET, every cryptocurrency with a market cap over $10 billion is down over the last 24 hours, apart from so-called stablecoins that track the U.S. dollar and other fiat currencies. 

Bitcoin ( BTC 0.57% ) was the most notable move, falling as much as 25% from trading at 7:00 p.m. ET on Friday night to a low of $42,749 near 11:00 p.m. ET on as much as $2 billion in volume per hour. The value of bitcoin has stabilized around $48,280 as I'm writing, but that's still down 12% over the last 24 hours.

Ethereum ( ETH 2.55% ) followed a similar trajectory. Hitting $3,575 late on Friday, Ethereum has now fallen 7.5% over the last 24 hours. Solana ( SOL -2.10% ) is down 7.1% over the same timeframe while Cardano ( ADA -2.07% ) dropped 11.6% lower.

Image source: Getty Images.

What's going on? 

There are a few potential reasons for the rapid move, but when prices move this quickly at off-hours, the biggest driver is most likely nothing more than panic. According to Justin d'Anethan of crypto exchange EQONEX, as reported by Reuters, large holders have been moving cryptocurrencies from wallets to exchanges where they can more easily be sold. If big holders are selling and retail investors are highly leveraged in their cryptocurrency holdings a collapse in values can happen quickly. 

Adding to the uncertainty is planned testimony before the U.S. House Financial Services Committee by executives from eight major firms, including Coinbase Global ( COIN -6.70% ), on December 8. Congress is trying to determine how to regulate the crypto market and these executives are trying to guide that regulation without completely crushing their business models. 

Broad selling of cryptocurrencies started about a month ago at the same time as growth stocks started to decline en masse. The potential for inflation, slowing job growth, and a flee to safety have all hurt both growth stocks and cryptocurrencies, which seem to be very correlated on the market. You can see below that the march lower has been steady and this chart doesn't even include the drop in the last few hours. 

Bitcoin Price data by YCharts

What's next? 

Volatility is normal in the cryptocurrency market but the last week has been extreme. Big investors appear to be cashing in gains from the last two years, and the increase in volatility appears concerning in relation to the short-term price action for cryptocurrencies. 

At the same time, investment in crypto infrastructure companies and utilities has only increased over the last few months and years, so there are long-term positives for the industry. But it could take years for those businesses to mature. 

I'm worried that new investors who haven't been through a market crash before have added too much leverage and aren't prepared for large drops in volatile assets like cryptocurrencies. That shock can cause panic and a downward spiral of selling. For at least a few hours early this weekend, that spiral took hold of the market. Given the recent trends, I worry that a long-term downward spiral might just be getting started. 

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Coinbase ( COIN -6.70% ) has a number of competitive advantages, including first-mover status as a cryptocurrency exchange and huge profit margins.

In this segment of "The 5" on Motley Fool Live, recorded on Nov. 23, Fool contributors Taylor Carmichael and Jason Hall discuss why Coinbase is one of Taylor's favorite stocks, and why it has the potential to be a ten-bagger from here.

Jason Hall: Taylor, this is one, I like this. I'm beginning to like the company more and more but I still have a tough time wrapping my head around the big valuation.

Taylor Carmichael: Coinbase. It's interesting. I've had a couple of picks and shovels plays in the crypto space. Silvergate Capital ( SI -15.47% ) is a bank that banks a lot of them. I've been playing this game that's on the blockchain. Both of these have the valuations, my profits really have skyrocketed. I started buying crypto a week or two ago. I dipped my toe in and I mainly went to Coinbase. Coinbase for those who don't know, it's the brokerage for the crypto industry. You can get like Bitcoin ( BTC -11.51% ) and Ether ( ETH -5.65% ). You can get those on Square ( SQ -5.64% ). We can't get Ether there, just Bitcoin but they're on Square, on Robinhood ( HOOD -10.95% ), on PayPal ( PYPL -1.72% ). They have like two or three coins. Coinbase has 120 coins. It's the biggest of the altcoins. If you're really interested at all in crypto, Coinbase is really the place to start. I think it's got a great kind of consumer. It's just a powerful brand. They're very friendly for newbies. They're teaching, they spend a lot of money and effort teaching people about crypto, which is really important, I think. This is a brand new thing. I bought a basket of crypto and I'm not spending a lot of money here, it's all under one percent but I bought a few $100 here or $50 here. I just bought a basket, and crypto is getting a commission on every purchase.

Hall: Coinbase.

Carmichael: Coinbase, yes. At the end of it, I was like man, Coinbase got a lot of money for me, and the next day, I bought shares at Coinbase. Coinbase has some of the most amazing financials of any company. They've got 50 percent profit margins. They've quadrupled their revenues. Let me see, six billion in revenues and they're quadrupling it. That's just phenomenal. Of course, it all depends on how you come down on crypto. If you think crypto is a legitimate opportunity, I've come to the conclusion that this is going to be the future of technology, the blockchain, and a bet on crypto is really a bet on the blockchain. The more I look into it, the more I think this is like the internet 2.0. When the blockchain comes, it's going to destabilize a lot of my existing stocks. I'm dipping my toes into the crypto waters and Coinbase is another picks and shovel play. It's a stock, but they have a really strong brand, they have a really strong business. I think if the other brokerages, like Schwab ( SCHW -2.06% ) is allegedly going to start trading crypto, I don't think they're going to offer 120 coins. I think they're going to just start with one or two because there's a whole learning curve that you have to do. Coinbase has been doing this for over a decade. They have a huge head start and they are just a powerful name. I would suggest, Fools, take a look at it, particularly if you own some Bitcoin or if you're looking at crypto, I would definitely research Coinbase as a stock. Whether it can get 10 times. It's a very large-cap. It's a $78 billion company. I think it's possible. Typically though, it's easier if you're under 10 billion to do that 10 bagger. Smaller companies have it better, but I think Airbnb can do it and they are a very large company. Depending on how big crypto is, yes, I think they can do it, given 10 years maybe.

Jason Hall: We'll see. It's an interesting company, hugely profitable, no doubt about that.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Invest Smarter with The Motley FoolJoin Over 1 Million Premium Members Receiving…New Stock Picks Each MonthDetailed Analysis of CompaniesModel PortfoliosLive Streaming During Market HoursAnd Much MoreGet Started NowMotley Fool Investing Philosophy#1 Buy 25+ Companies #2 Hold Stocks for 5+ Years #3 Add New Savings Regularly #4 Hold Through Market Volatility #5 Let Winners Run #6 Target Long-Term Returns

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MentionedCoinbase Global, Inc.COIN$265.65(-6.70%)$-19.06The Charles Schwab CorporationSCHW$78.47(-2.06%)$-1.65PayPal Holdings, Inc.PYPL$183.93(-1.72%)$-3.22Square, Inc.SQ$181.31(-5.64%)$-10.84Silvergate Capital 73.86EthereumETH$3,978.67(-5.65%)$-238.26Robinhood Markets, Inc.HOOD$21.55(-10.95%)$-2.65

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Related ArticlesCoinbase Stock Tumbles as Cathie Wood Sells Some SharesGot $500? Consider These 2 Cathie Wood Bargain StocksMy Top Platforms to Trade CryptoJust How Much Money Is Flowing Into the Crypto World, Really?Time to Buy COIN Stock Following Disappointing Coinbase Earnings?Motley Fool Returns

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Shiba Inu has quickly become one of the most popular cryptocurrencies, reaching the top 10 in value earlier this year.

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Although its technology is much different from Dogecoin, many of the same investors have bought both, because Shiba Inu is the same type of dog breed on Dogecoin’s logo. And they are largely attributed as two of the most successful meme coins.

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Lately, though, after the exceptional rally that Shiba Inu saw in October, it has been on a consistent downtrend. In fact, over the last month, Shiba Inu lost half of its value. That was until earlier this week when it saw a significant 20% gain in price in just two short days.

This jump happened as a result of Shiba Inu being listed on a new exchange, which tends to have that short-term effect on cryptocurrencies. So, this is a reminder that even coins on a significant downtrend can rally at any time. You can never predict what will happen in the short run. However, the quick selloff after that rally also shows that Shiba Inu still has significant downward momentum.

If you compare a Dogecoin chart from May to a Shiba Inu chart in October, the two are almost completely identical. This doesn’t necessarily mean Shiba Inu will continue to follow the same pattern as Dogecoin, but it’s certainly not a bullish signal.

Avoid Shiba Inu and focus on high-quality cryptocurrencies

As was proven this week, even when a highly speculative cryptocurrency like Shiba Inu is on a significant downtrend, there is still the potential for news to make it temporarily rally.

However, although there may still be periodic run-ups in the price of the token, you can’t just buy it hoping for more positive news to come out. That’s not an investing strategy.

Not to worry, though. There are several cryptocurrencies that offer far better long-term potential. There are even crypto stocks you can buy in your TFSA that offer more opportunities for growth.

So, rather than Shiba Inu, here are two high-quality cryptocurrencies with much more long-term potential.

Two of the top cryptocurrencies to buy today

If you’re looking to buy a high-quality cryptocurrency that you can commit to for the long run, it’s crucial that they have a use case.

Not only does this make the investment less speculative, but the more uses a coin or token has, the more investors are going to be holding it to use it, and therefore, over time, as the demand increases, they should only continue to increase in price.

So, rather than Shiba Inu, I’d consider two high-potential cryptocurrencies like UNI and AVAX.

UNI is the governance token of Uniswap, one of the most popular decentralized exchanges on Ethereum’s network. Many are bullish on Ethereum, as it’s already the most actively used blockchain.

So, owning Uniswap’s governance token, which you can then stake and earn a yield on, is a much better option than Shiba Inu. Already UNI is in the top 20 most valuable cryptocurrencies and has a market cap north of US$13 billion.

AVAX is the native cryptocurrency of a high-quality blockchain, Avalanche. Avalanche is a blockchain that’s seeking to dethrone Ethereum as the most actively used network. However, it’s also compatible with Ethereum, so it can grow as part of the Ethereum ecosystem.

At this point, though, Avalanche’s network has better technology than Ethereum’s, which is why it could be an excellent long-term investment. And AVAX is already the 12th most valuable cryptocurrency with a market cap of more than US$42 billion.

So, rather than speculate on Shiba Inu, which looks to be on a significant downtrend, I’d strongly consider investing in high-potential cryptocurrencies or even crypto stocks that offer tremendous opportunities for growth.

The post Is This Confirmation That the Shiba Inu Saga Is Over? appeared first on The Motley Fool Canada.

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Ever since the significant mainstream adoption of cryptocurrencies began last year, the most actively used blockchain Ethereum and its native currency Ether have continued to gain a ton of popularity.

Most investors who know little about cryptocurrencies at least know that Bitcoin was created as a form of digital payment. All it can be used for is as a payment network.

However, Ethereum is a game changer since it has the ability to run smart contracts. And once you start to realize all the possibilities that are created by smart contracts and the blockchain industry, you start to see why the industry has so much potential, and why investors are so bullish on Ether.

There are several common reasons why Ether is an excellent investment. But here are three shocking facts that show Ether might have even more potential than we all think.

As I’ve mentioned several times before, the rise in Ether is almost certainly not a bubble, because investors aren’t buying it to speculate on the price. They are buying it to use, such as for decentralized finance (DeFi) purposes.

And as more users are drawn to the space, more Ether continues to get locked up in smart contracts on Ethereum’s network. Currently, roughly 25% of Ether’s entire supply is locked up in smart contracts, with roughly 75% of that being in DeFi.

That’s a significant portion, which not only validates the potential DeFi has but also locks these coins up and effectively takes them out of the circulating supply. That’s not all, though.

In addition to much of the supply of Ether continuing to be locked up in smart contract platforms, the supply of Ether on exchanges continues to decline.

At the beginning of the year, roughly 17% of Ether’s supply was available on exchanges. Today that number sits at right around 12% and continues to decline.

This is another sign that the available supply of Ether is falling fast. So, as new capital comes into the industry and the Ethereum ecosystem, especially throughout 2022, Ether has the potential to skyrocket.

In addition to the supply of Ether available for investors to buy consistently decreasing, Ethereum is also in the process of upgrading its blockchain in a major way.

Because the blockchain network was launched so long ago, there are some significant drawbacks that need to be addressed, such as scalability. However, this is already in the works and should be launched sometime in 2022.

On top of these upgrades, Ether is now also being burned. So, each day, as more Ether is burned, naturally, it increases the scarcity. All this means a ton of potential for both Ether and Ethereum.

More than 50% of Ether’s supply is currently locked up, and that number continues to increase. So, there is less supply available for new investors at a time when more investors are continually being attracted to the space.

There are other chains you can use, but at the end of the day, Ethereum has the most projects and decentralized apps, the best opportunities to make money in DeFi, and has some of the highest potential tokens deployed on its network.

So, for investors who want exposure today, you’ll want to buy a high-quality ETF, such as the CI Galaxy Ethereum ETF or a top crypto stock that will offer exposure to the growing use of DeFi.

The blockchain industry is one of the highest potential investment opportunities of our lifetime, so it’s crucial you find the highest-quality stocks to commit to for the long haul and buy them soon while they’re still cheap.

The post Ethereum: 3 Shocking Reasons Ether Has Even More Potential Than You Might Think appeared first on The Motley Fool Canada.

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2021

On Friday, Norwegian Block Exchange (NBX) announced it would become the first cryptocurrency platform among the Nordic countries (Norway, Sweden, Denmark and Finland) to list its shares on the pan-European Euronext stock exchange. NBX was created in 2018 by Bjørn Kjos, who also founded Norwegian Air Shuttle and Bank Norwegian.

NBX has eight cryptocurrencies listed and about 20 trading pairs available. The exchange is approved and supervised by the Financial Supervisory Authority of Norway. NBX claims it is the only platform in the Nordic countries that insures clients' crypto via the $150 million Ledger Vault insurance pool that pays out should a covered event occur.

Last December, NBX raised $6.6 million via an equity and sale. It would not be raising any further capital in anticipation of the Euronext listing. In the past year, the firm's market capitalization surged 142% on over-the-counter exchanges to $56.52 million. It has over 25,000 customers and processed $101.18 million during the first nine months of the year.

CEO Stig Kjos-Mathisen gave the following statement in regards to the development:

'We are currently well-funded to be able to deliver on our ambitions for the development of technology and products as well as customer acquisition in the near term. However, as a listed company, we will be relevant for a much broader investor base and be well equipped to utilize the equity market when more capital is required later.

Related: Bitcoin Capital AG launches two crypto ETPs on SIX Swiss Exchange

Cryptocurrency adoption in the Nordics has been slow even as regulators have taken a softer stance on digital asset oversight. Norway's financial administrative body sees crypto activities in the country as largely unregulated and only supervises companies for money laundering. In Finland, fewer than 10 companies are registered as operating in the digital currency space. In Sweden, the first Polkadot exchange-traded product was recently launched on the country's Nordic Growth Market exchange. As for Denmark, the country's largest bank urges caution on crypto adoption but does not support intervention.

If you are looking to invest in Metaverse (ETP) stock, there are a few ways to do so. You can buy shares on an open exchange, invest in a cryptocurrency fund, or purchase tokens through an Initial Coin Offering (ICO). However, if you want to take a more hands-on approach, you can also invest in Metaverse stock through an LLC.

An LLC is a type of company that offers its shareholders limited liability protection. This means that, as a shareholder, you are not personally liable for any debts or liabilities incurred by the company. In addition, an LLC can provide tax benefits to its shareholders.

To set up an LLC and invest in Metaverse stock, you will need to file Articles of Organization with your state's Secretary of State. This document will outline the basic information about your company, such as its name, purpose, and members. You can also hire a reliable LLC formation service for this purpose.

Once your LLC is registered, you will need to open a brokerage account and buy shares of Metaverse on an exchange. Alternatively, you can invest in a cryptocurrency fund or ICO.

What is Metaverse?

For those who don't know, Metaverse is a public blockchain that aims to provide digital financial services all across the globe. The project bills itself as the first-ever Internet of Value, which means that users can send and receive currency via peer-to-peer transactions without involving cryptocurrency exchanges or other intermediaries.

To maintain these capabilities, Metaverse uses digital identity technology known as "Avatars." This tool enables users to use their unique Avatar ID for identification purposes on the blockchain instead of using messy long cryptographic pseudonyms.

Metaverse was founded in 2016 by Eric Gu with support from several members of ViewFin China. The latter company is responsible for creating Metaverse's smart contract platform. Since its ICO, Metaverse has grown into one of the world's top 100 cryptocurrencies.

Uses of Metaverse1. User Identity Authentication

Smart Token is a dynamic data structure that contains information about the user's wallet. The key to Metaverse Smart Token lies in its ability to authenticate users. 

When logging into an application, part of the profile information can be read from the smart contract instead of asking for it on each login, greatly reducing the inconvenience of repeated entering information.

Furthermore, a piece of information can be set as a condition for withdrawal. For example, restricting access to funds that have passed KYC authentication, preventing thefts from user accounts.

2. Token-based Applications

Metaverse Smart Token has built-in support for token issuance and management, making it easier for developers to create tokens based on the Metaverse blockchain.

Developers who are not familiar with complex underlying technologies can easily issue tokens according to their needs. Each token is also represented by an avatar address, which allows it to be traced and identified among all other smart assets on the chain.

3. Digital Asset Registration and Exchange between Users

One of the core features of the Metaverse Smart Token is the ability to exchange digital assets between users.

For example, if Chelsea from biomadam has a piece of land on island A and Bob has another on island B, they can tokenize their land through Smart Token and trade it.

The counterparties can determine whether they want to be identified for security reasons or not, which is also a customizable parameter. Additionally, all data and transactions on Metaverse can be traced, which ensures the authenticity of the traded asset.

4. Social Networking and Fundraising

Metaverse allows users to create social networks with token incentives. Users will sign into their address using Metaverse Smart Token and publish content on user feeds or receive token rewards for daily activities that are considered valuable by the community.

Enterprises can also raise funds through token issuance, which is more efficient than crowdfunding on Ethereum's ERC-20 platform as it requires less gas.

5. Tokenization of Physical Assets

Digital certificates of physical assets can be created by oracles to track information about real-world products along with the chain of custody.

The ownership of physical assets can be transferred through the issuance and redemption of Metaverse Smart Token, which serves as an atomic swap protocol. In this way, a digital certificate can be created on the blockchain to represent any tangible or intangible asset in the real world.

6. Shopping Experience in Metaverse

Metaverse allows users to pay for goods and services with digital assets. For example, a user can pay for a product on an online store by sending the corresponding tokens to the store's avatar address. 

This not only provides a more convenient way of shopping but also eliminates the need for third-party payment processing services that often charge high fees.

Customers can experience heavy & expensive products like water softeners, wedding dresses, auto mobile, furniture etc. before they are purchased and shipped, allowing them to check the product's quality more accurately.

How to Invest in Metaverse Stock

There are numbers of ways to invest in Metaverse stock. You can buy shares on an open exchange, invest in a cryptocurrency fund, or purchase tokens through an Initial Coin Offering (ICO), among other options.

1. Buy shares on an open exchange

If you want to buy shares on an open exchange, you can search for a Metaverse stockbroker or look for a platform that offers Metaverse trading. It's important to do your research before choosing a broker or platform, as some may be more reputable than others. Keep in mind that some brokers will require you to deposit money with them before you can buy Metaverse stock through their accounts.

If you want to purchase Metaverse stock using USD or EUR, look for an entity regulated by the SEC (U.S.), FCA (U.K.), CNMV (Spain), AMF (France) or BaFin (Germany).

2. Invest in a cryptocurrency fund

If you're not comfortable buying shares on an open exchange, or if you want to invest more money than you're comfortable risking, you may want to consider investing in a cryptocurrency fund. These funds invest in a variety of different cryptocurrencies, so you'll be exposed to a range of different digital tokens as well as Metaverse.

You can find a list of cryptocurrency funds to choose from here. Look for a fund that has low management fees, as those will eat into your earnings over time. You should also check whether the fund you're looking at is regulated by any relevant authority. Some unregulated funds may be fraudulent, so it's important to do your research before investing.

3. Purchase tokens through an Initial Coin Offering (ICO)

If you're looking to invest in Metaverse specifically, you may want to consider purchasing tokens through an ICO. An ICO is a way for startups to raise money by issuing their own digital tokens. These tokens can then be traded on exchanges, which means they have the potential to increase in value as well.

In order to participate in an ICO, you need to use a cryptocurrency wallet. In this case, you'll typically receive your tokens directly into your Metaverse wallet as soon as you make payment for them. You should be aware that it's not always clear whether participating in an ICO is legal - it's best to look for a trustworthy entity before investing.

You can find a list of Metaverse ICOs here. You'll need to choose one that seems legitimate and that you feel has potential for growth. Note that this list is not extensive, as there are new ICOs launching all the time.

Invest in Metaverse Stock through an LLC - Step by Step

If you are looking for a way to invest in Metaverse (ETP) and don't want to go through the hassle of setting up an exchange account, you can do so through an LLC. Here is a step-by-step guide on how to do this:

1. First, you need to create an LLC. To do this, simply go to your state's LLC licensing website and follow the steps listed there.

2. Once you have created an LLC, you need to file for a federal tax ID or EIN (Employer Identification Number). You can apply for it online via the IRS website (see "Apply for an EIN").

3. Next, you need to open a bank account for your LLC. This can be done at any bank of your choosing.

4. Once you have done all of the above, you need to contact an exchange that supports Metaverse (ETP) and ask them to add your LLC as a supported entity. Once they have added your LLC, you will be able to invest in Metaverse (ETP) through your LLC account.

Conclusion

Investing in Metaverse (ETP) through an LLC can be a great way to get exposure to this exciting cryptocurrency. By following the steps listed in this guide, you can make it easy for yourself to do so.

If you follow these steps and have any questions or concerns, feel free to leave a comment below and we will do our best to answer your question.

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Coinbase Global, Inc.Market Cap$57BToday's Change(-6.70%) -$19.06Current Price$265.65

Cathie Wood loves Coinbase ( COIN -6.70% )and Robinhood ( HOOD -10.95% ). The market is negative on both stocks. Coinbase stock is down 10% this year, and Robinhood shares have lost 31% since the company went public. So why is Wood so bullish?

In a word, crypto. Cathie Wood is a famous Bitcoin bull. While Wood is extremely bullish on Bitcoin -- her public price target is $500,000 by 2026 -- she is also hedging her bets. And we know this because Coinbase is one of her funds' major holdings. Three of her funds have invested a combined $1.65 billion in Coinbase, making it the #3 holding after Tesla and Teladoc Health. Why is she so passionate for this stock? Coinbase is the place you go when you want to buy altcoins (i.e., Coins That Are Not Bitcoin). While Square only has Bitcoin on its Cash app, and Robinhood has only a handful of coins, Coinbase has over 120 different crypto coins you can buy.

Here's why Wood owns Coinbase and Robinhood.  

image source: Getty Images

Bitcoin and the Not Bitcoins

Coinbase is where you go to >Avalanche. These are the super-fast blockchains that blow the old ones out of the water. In her public statements, Wood is bullish on Bitcoin and Ethereum, and she's "studying" the rest of the crypto universe.

Coinbase is where you go to study. Most observers of the crypto landscape agree that the vast majority of coins are effectively worthless, while a handful (maybe a dozen) coins are incredibly under-valued right now. I think Wood is right on Bitcoin. It is "digital gold," and as an asset class, it is under-represented in institutional holdings. So while a $500,000 call on the coin is really bullish, that could definitely happen.

The weak part of Wood's argument (and she knows it) is the idea that Ethereum is all the altcoin you need. No, sorry, Ether is slow as molasses. So while a sizable number of applications are already built on Ethereum, the underlying blockchain is not fast enough to scale. The upshot is that the "gas fees" to get on the Ethereum blockchain now are ridiculously high. So while Ethereum was your best option three or four years ago, it's a poor option right now.

What about Ethereum 2.0? Here's what Ben Edgington, one of the guys working on the upgrade, said to Cointelegraph:  

"The move to proof-of-stake will not immediately provide any significant extra throughput to the Ethereum chain, so I don't expect it to have a measurable effect on gas prices. The scalability strategy in Ethereum now revolves around layer-two solutions like the various roll-ups that are currently being deployed. Once The Merge is done, we will focus on providing data shards within the Ethereum protocol that will allow roll-ups to scale massively."

In other words, an Ethereum blockchain that can compete with the new wave is years away, not months. This is why Cathie Wood owns so much Coinbase stock; Bitcoin and Ethereum are insufficient.

The crypto universe is in a transitional whirlwind. The price of Solana's crypto jumped 10,000% in less than a year. That sort of insane gain doesn't happen when all the important discoveries have already been made. People need speed, and they need it now. Any investors who want those sorts of dramatic returns are opening up accounts at Coinbase, which is the top dog and first mover in crypto shopping.

Robinhood is the King of Memes

While Wood is not as ecstatic about Robinhood as she is about Coinbase, it is a major holding in her various funds. Back in 2018, Robinhood made the decision to list Dogecoin, the first "meme" coin and one of the more useless coins out there. Dogecoin offers no promising tech advancement for crypto developers. It was designed as a joke. Nonetheless, the coin has skyrocketed for early buyers.

Dogecoin Price data by YCharts

An investor on Robinhood might think that Dogecoin is one of the most important coins in the crypto universe. On Robinhood you can buy Bitcoin, Ethereum, Dogecoin, Litecoin, Ethereum Classic, Bitcoin Cash, and Bitcoin SV. In other words, on Robinhood you can buy Bitcoin, Ethereum, one of the Bitcoin or Ethereum spin-offs, or you can buy a joke. So Robinhood would appear to be in the "there are only two cryptos worth buying" camp. If you actually want to research crypto and find the most promising blockchain tech out there, Robinhood is not for you.

Of course, when a major exchange lists a coin for sale, that is a validation of the coin's value. So Robinhood can be criticized -- and has been criticized -- for offering a joke coin to the public. 

Why is Wood buying Robinhood? She believes the crypto revolution is a people-led movement. It's been ordinary people who have bought Bitcoin, and it's the financial institutions that are late to the party. Indeed, her investment thesis for Bitcoin is that sooner or later the "smart money" will follow the popular will. So she prizes Robinhood for its emphasis on popularity and giving the people what they want. 

If you're serious about crypto and blockchain technology, buy shares of Coinbase. And if you think crypto is a lot of fun, add Robinhood as well.

  This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Join Over 1 Million Premium Members Receiving…New Stock Picks Each MonthDetailed Analysis of CompaniesModel PortfoliosLive Streaming During Market HoursAnd Much MoreGet Started Now#1 Buy 25+ Companies #2 Hold Stocks for 5+ Years #3 Add New Savings Regularly #4 Hold Through Market Volatility #5 Let Winners Run #6 Target Long-Term Returns

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Coinbase Stock Tumbles as Cathie Wood Sells Some SharesHere's How Coinbase Could 10X From HereMy Top Platforms to Trade CryptoJust How Much Money Is Flowing Into the Crypto World, Really?Time to Buy COIN Stock Following Disappointing Coinbase Earnings?

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Coinbase (NASDAQ:COIN) has a number of competitive advantages, including first-mover status as a cryptocurrency exchange and huge profit margins.

In this segment of "The 5" on Motley Fool Live, recorded on Nov. 23, Fool contributors Taylor Carmichael and Jason Hall discuss why Coinbase is one of Taylor's favorite stocks, and why it has the potential to be a ten-bagger from here.

Jason Hall: Taylor, this is one, I like this. I'm beginning to like the company more and more but I still have a tough time wrapping my head around the big valuation.

Taylor Carmichael: Coinbase. It's interesting. I've had a couple of picks and shovels plays in the crypto space. Silvergate Capital (NYSE:SI) is a bank that banks a lot of them. I've been playing this game that's on the blockchain. Both of these have the valuations, my profits really have skyrocketed. I started buying crypto a week or two ago. I dipped my toe in and I mainly went to Coinbase. Coinbase for those who don't know, it's the brokerage for the crypto industry. You can get like Bitcoin (CRYPTO:BTC) and Ether (CRYPTO:ETH). You can get those on Square (NYSE:SQ). We can't get Ether there, just Bitcoin but they're on Square, on Robinhood (NASDAQ:HOOD), on PayPal (NASDAQ:PYPL). They have like two or three coins. Coinbase has 120 coins. It's the biggest of the altcoins. If you're really interested at all in crypto, Coinbase is really the place to start. I think it's got a great kind of consumer. It's just a powerful brand. They're very friendly for newbies. They're teaching, they spend a lot of money and effort teaching people about crypto, which is really important, I think. This is a brand new thing. I bought a basket of crypto and I'm not spending a lot of money here, it's all under one percent but I bought a few $100 here or $50 here. I just bought a basket, and crypto is getting a commission on every purchase.

Hall: Coinbase.

Carmichael: Coinbase, yes. At the end of it, I was like man, Coinbase got a lot of money for me, and the next day, I bought shares at Coinbase. Coinbase has some of the most amazing financials of any company. They've got 50 percent profit margins. They've quadrupled their revenues. Let me see, six billion in revenues and they're quadrupling it. That's just phenomenal. Of course, it all depends on how you come down on crypto. If you think crypto is a legitimate opportunity, I've come to the conclusion that this is going to be the future of technology, the blockchain, and a bet on crypto is really a bet on the blockchain. The more I look into it, the more I think this is like the internet 2.0. When the blockchain comes, it's going to destabilize a lot of my existing stocks. I'm dipping my toes into the crypto waters and Coinbase is another picks and shovel play. It's a stock, but they have a really strong brand, they have a really strong business. I think if the other brokerages, like Schwab (NYSE:SCHW) is allegedly going to start trading crypto, I don't think they're going to offer 120 coins. I think they're going to just start with one or two because there's a whole learning curve that you have to do. Coinbase has been doing this for over a decade. They have a huge head start and they are just a powerful name. I would suggest, Fools, take a look at it, particularly if you own some Bitcoin or if you're looking at crypto, I would definitely research Coinbase as a stock. Whether it can get 10 times. It's a very large-cap. It's a $78 billion company. I think it's possible. Typically though, it's easier if you're under 10 billion to do that 10 bagger. Smaller companies have it better, but I think Airbnb can do it and they are a very large company. Depending on how big crypto is, yes, I think they can do it, given 10 years maybe.

Jason Hall: We'll see. It's an interesting company, hugely profitable, no doubt about that.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Marathon Patent Group, Inc.Market Cap$4BToday's Change(-15.14%) -$7.43Current Price$41.64What happened

Cryptocurrency miners are under pressure today. Three of the largest crypto miners, Marathon Digital Holdings ( MARA -15.14% ), Riot Blockchain ( RIOT -13.13% ), and Hive Blockchain ( HIVE -9.33% ) are all down more than 8% as of 2 p.m. ET.

Today's marked decline in the crypto mining sector appears to be a direct result of strong regulatory headwinds. Up to now, most of these have come out of China and India. However, it appears U.S. regulators are increasingly looking at crypto mining, from an environmental and sustainability perspective.

Putting investors on edge today are reports that Sen. Elizabeth Warren sent a letter to Greenidge Generation Holdings CEO Jeff Kirt asking for information on the climate change impact of crypto mining.

Image source: Getty Images.

So what

Crypto mining is extremely energy intensive. Many of the major cryptocurrency blockchain networks require what's known as a proof-of-work consensus mechanism to validate blocks on the blockchain and secure the network. These require heavy computing power to solve difficult mathematical problems. Some of the largest crypto networks, including those of Bitcoin, Ethereum, and Litecoin, use proof-of-work protocols.

Just how much energy is used to mine crypto? 

Well, Bitcoin mining alone accounts for more than 0.5% of the world's electricity usage, much larger than many small countries. Given the fact that crypto mining requires large amounts of electricity, crypto miners have come under pressure, in countries like China specifically, for using the cheapest electricity possible (usually derived from coal-powered plants). The U.S. appears to be coming to a similar conclusion on the topic, questioning the viability of crypto mining from an environmental standpoint.

Now what

Many alt coins and "newer" blockchain networks are being built with proof-of-stake consensus mechanisms. These allow for blocks to be verified via token holders staking their tokens to become validators and secure the blockchain. Essentially, this cuts down on the energy usage needed to run networks, providing a more sustainable alternative to the existing validation models. Notably, Ethereum is making a move toward proof of stake with its Ethereum 2.0 update.

However, in its current state, the crypto mining sector is one that's a power-guzzler. This is one of the key reasons why the crypto sector has caught the attention of regulators once again.

This current U.S. administration has already shown an affinity toward regulating the crypto sector, from a taxation standpoint, to support infrastructure spending. That said, additional regulations related to reducing the environmental impact of crypto mining could be the next step for this largely unregulated sector. Accordingly, investors in crypto miners are on watch today.

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TerraMarket Cap$0Today's Change(-12.98%) -$8.27Current Price$55.45What happened

The crypto markets are broadly red today, and have seen significant selling pressure since Wednesday. However, there are pockets of winners in the cryptocurrency sector that are inspiring confidence. Among this week's outperformers are Terra ( LUNA -12.98% ), Polygon ( MATIC -18.97% ), and Algorand ( ALGO -13.30% ).

Compared to last Friday's close, Terra, Polygon and Algorand appreciated 63%, 35.1%, and 10.1%, as of 1:30 p.m. ET.

Image source: Getty Images.

So what

Terra Luna has been among the biggest winners in the large-cap crypto space this week, and in recent weeks. This price momentum translated into Terra's move into 11th spot in the crypto rankings as of this morning, just a hair behind meme token Dogecoin. Yesterday, Terra surpassed Shiba Inu on news that new proposals for this blockchain network could improve tax reporting capabilities and liquidity for investors.

Polygon's surge this week appears to be related to the layer-2 network's adoption by another key protocol. Uniswap announced it would join Sushiswap and Aave in utilizing Polygon's layer-2 functionality.

Algorand has been more volatile in recent weeks, surging on news that this token would be added on various exchanges. It appears investors like Algorand's proof-of-stake consensus mechanism, and this network's overall utility.

Now what

Each of these three large-cap cryptocurrencies represent underlying blockchain technologies investors are gravitating toward right now. Each have token-specific drivers that are providing outperformance in this period of relative volatility.

Of course, investing in any digital asset remains a risky endeavor, and we're seeing significant volatility continue to emanate in the crypto world. However, for investors looking to put some money on winners in the crypto sector and letting it run, these three tokens are worth considering right now. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Join Over 1 Million Premium Members Receiving…New Stock Picks Each MonthDetailed Analysis of CompaniesModel PortfoliosLive Streaming During Market HoursAnd Much MoreGet Started Now#1 Buy 25+ Companies #2 Hold Stocks for 5+ Years #3 Add New Savings Regularly #4 Hold Through Market Volatility #5 Let Winners Run #6 Target Long-Term Returns

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Motley Fool Issues Rare “All In” Buy Alert

BitcoinMarket Cap$0Today's Change(0.98%) $483.86Current Price$49,732.86

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Leading digital currency Bitcoin ( BTC 0.98% ) fell as much as 18.6% in the space of 70 minutes last night. Still, the grandfather of cryptocurrencies trades no more than 30% below its all-time highs and has gained 50% in 52 weeks. Bitcoin's market cap is a massive $907 billion today. Only five companies on the stock market can boast a higher market value.

If you are interested in the cryptocurrency space but worried that Bitcoin might be flying too close to the sun, you have plenty of lower-priced options. Here's why you should consider Polkadot ( DOT -1.99% ) and Theta ( THETA ) instead.

Image source: Getty Images.

Nuts and bolts for a thriving blockchain-based ecosystem

Anders Bylund (Polkadot): The cryptocurrency market is still in the early stages. With so much history left unwritten, it's difficult to predict which of the many thousand digital coins and tokens might survive in the long run. Therefore, I prefer to stick with the nuts-and-bolts infrastructure of the evolving market. On that note, Polkadot looks like a big long-term winner.

On this fine Saturday morning, after a marketwide price correction across every digital asset, Polkadot is changing hands at $28.32 per token. That's more than 43% below the all-time high of $50 that was set in early November. Polkadot has done nothing to deserve this dramatic haircut. The token is only moving forward toward full functionality as we speak, executing the fourth in a long series of parachain slot auctions. Parachains are a crucial part of the Polkadot network's ecosystem, allowing the winning projects to fund and launch their smart contract services with widespread popular support and access to connections with other leading cryptocurrencies.

The first winner was decentralized finance protocol Acala, raising $1.3 billion from 81,000 different Polkadot token holders. Acala already calls itself "Polkadot's economic hub," aiming to build a fully functional decentralized finance platform with its own stablecoin, dividend-like staking processes, and a highly scalable backbone based on Polkadot's blockchain system and Ethereum ( ETH 2.98% ) compatible contracts.

Next, the Moonbeam project raised $1.4 billion from more than 200,000 auction participants. Moonbeam starts with the basic Ethereum toolkit, adds Polkadot's connectivity to other blockchains, and extends the resulting platform with innovative app-building features. In the long run, this project wants to simplify the way app developers build software using smart contract features from many different blockchain systems.

The third winner, a Japanese distributed app hub named Astar Network, collected $360 million in crowdfunding from 27,100 contributions. This project reminds me of Moonbeam but also supports advanced features like the Ethereum virtual machine and layer 2 scalability boosters.

That's just the first three winners out of roughly 100 expected parachain auctions running over the next three months. Polkadot is building an impressive portfolio of developer-friendly technologies here. The resulting ecosystem should be a robust and flexible entity with long-term staying power. Yet, market forces have driven Polkadot's prices much lower even as the network and token are moving toward this promising future.

So Polkadot is one of my favorite cryptocurrencies right now, especially when you can pick up tokens at dramatically lower prices.

Image source: Getty Images.

This cryptocurrency has some great fundamentals

Bram Berkowitz (Theta): I was surprised that Theta ( THETA ) remained around its recent price level of $6.50 for so long, despite having so much going for it. Even after Saturday's sudden 23% drop, the token still trades for just $5. One of the things that crypto investors look for is good real-world utility because there are now so many cryptocurrencies that can transmit money. Theta has a tremendous use case as a blockchain that enables peer-to-peer video streaming, with the goal of improving the quality of expensive video streaming in a more cost-efficient manner. The network does this by allowing people to share bandwidth from their own devices when they are not using them in order to ease congestion on the standard content delivery networks that companies build to support streaming. Users that extend their bandwidth to the network can get tokens and earn money.

Theta has obtained high-level advisors and support from big names like Steve Chen, co-founder of YouTube, and Justin Kan, co-founder of Twitch. It has also added big companies to serve as enterprise validator nodes, which help run the network, like Alphabet's Google, Sony, Samsung, and CAA. Theta has obtained six different patents to protect its technology and further boost its competitive advantage.

Theta at one point traded for as high as $14 but has since failed to gain much traction. Still, it has several characteristics that might make it attractive for crypto investors. For one, the supply of Theta tokens is capped at $1 billion, so there is a scarcity factor. Also, Theta is somewhat difficult to buy because it's not currently offered on a lot of the mainstream crypto exchanges like Coinbase. This likely shuts out a lot of investors that might be interested. There has been talk in the past that popular exchanges will one day offer the token to their customers, which I believe would significantly increase trading volume and likely boost the price. Theta currently has a market cap of about $5.6 billion. In comparison, Dogecoin, which I think Theta is much better than, has a more than $26 billion market cap.

Whether you prefer Polkadot's bustling app development ecosystem or Theta's video-streaming functionality, these tokens offer promising long-term value at affordable prices. Bitcoin is not the only game in town for cryptocurrency investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Join Over 1 Million Premium Members Receiving…New Stock Picks Each MonthDetailed Analysis of CompaniesModel PortfoliosLive Streaming During Market HoursAnd Much MoreGet Started Now#1 Buy 25+ Companies #2 Hold Stocks for 5+ Years #3 Add New Savings Regularly #4 Hold Through Market Volatility #5 Let Winners Run #6 Target Long-Term Returns

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Silvergate Capital (NYSE:SI) stock suffered significant sell-offs in Friday's trading. It closed out the day down roughly 15.4%.

Silvergate provides banking services to leading cryptocurrency exchanges, and its stock price often trades in line with moves for the broader cryptocurrency market. With Bitcoin (CRYPTO:BTC) and other leading digital tokens undergoing steep sell-offs today, the fintech company's share price was dragged lower by the trend. 

Image source: Getty Images.

So what

The cryptocurrency market was awash in a sea of red on Friday as investors moved out of high-risk investments. Bitcoin was down as much as 9.4% in the daily session. Meanwhile, Ethereum's (CRYPTO:ETH) and Solana's (CRYPTO:SOL) tokens were down 11.1% and 15.5%, respectively, at their low points on the day.

While there wasn't any business-specific news driving Silvergate Capital's share price down, it's not surprising that its stock got hit hard amid sell-offs pushing equity and cryptocurrency valuations lower. Not only is the company's business heavily dependent on the crypto market, its stock is also high risk and has a growth-dependent valuation. Between bearish pressures hitting equity and cryptocurrency markets, the company's share price closed out Friday down double digits. 

Now what

Across both stock and cryptocurrency markets, investor appetite for risk appears to be wavering. Factors including the coronavirus omicron variant, rising Treasury bond yields, and new regulatory developments are prompting investors to take money off the table and move into safer investments. How long this trend will persist remains to be seen, but it's likely that Silvergate's valuation will continue to move in tandem with momentum for the broader crypto space. 

Silvergate Capital now has a market capitalization of roughly $5.2 billion and is valued at approximately 29 times this year's expected sales and 68 times expected earnings. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Cathie Wood loves Coinbase ( COIN -6.70% )and Robinhood ( HOOD -10.95% ). The market is negative on both stocks. Coinbase stock is down 10% this year, and Robinhood shares have lost 31% since the company went public. So why is Wood so bullish?

In a word, crypto. Cathie Wood is a famous Bitcoin bull. While Wood is extremely bullish on Bitcoin -- her public price target is $500,000 by 2026 -- she is also hedging her bets. And we know this because Coinbase is one of her funds' major holdings. Three of her funds have invested a combined $1.65 billion in Coinbase, making it the #3 holding after Tesla and Teladoc Health. Why is she so passionate for this stock? Coinbase is the place you go when you want to buy altcoins (i.e., Coins That Are Not Bitcoin). While Square only has Bitcoin on its Cash app, and Robinhood has only a handful of coins, Coinbase has over 120 different crypto coins you can buy.

Here's why Wood owns Coinbase and Robinhood.  

image source: Getty Images

Bitcoin and the Not Bitcoins

Coinbase is where you go to >Avalanche. These are the super-fast blockchains that blow the old ones out of the water. In her public statements, Wood is bullish on Bitcoin and Ethereum, and she's "studying" the rest of the crypto universe.

Coinbase is where you go to study. Most observers of the crypto landscape agree that the vast majority of coins are effectively worthless, while a handful (maybe a dozen) coins are incredibly under-valued right now. I think Wood is right on Bitcoin. It is "digital gold," and as an asset class, it is under-represented in institutional holdings. So while a $500,000 call on the coin is really bullish, that could definitely happen.

The weak part of Wood's argument (and she knows it) is the idea that Ethereum is all the altcoin you need. No, sorry, Ether is slow as molasses. So while a sizable number of applications are already built on Ethereum, the underlying blockchain is not fast enough to scale. The upshot is that the "gas fees" to get on the Ethereum blockchain now are ridiculously high. So while Ethereum was your best option three or four years ago, it's a poor option right now.

What about Ethereum 2.0? Here's what Ben Edgington, one of the guys working on the upgrade, said to Cointelegraph:  

"The move to proof-of-stake will not immediately provide any significant extra throughput to the Ethereum chain, so I don't expect it to have a measurable effect on gas prices. The scalability strategy in Ethereum now revolves around layer-two solutions like the various roll-ups that are currently being deployed. Once The Merge is done, we will focus on providing data shards within the Ethereum protocol that will allow roll-ups to scale massively."

In other words, an Ethereum blockchain that can compete with the new wave is years away, not months. This is why Cathie Wood owns so much Coinbase stock; Bitcoin and Ethereum are insufficient.

The crypto universe is in a transitional whirlwind. The price of Solana's crypto jumped 10,000% in less than a year. That sort of insane gain doesn't happen when all the important discoveries have already been made. People need speed, and they need it now. Any investors who want those sorts of dramatic returns are opening up accounts at Coinbase, which is the top dog and first mover in crypto shopping.

Robinhood is the King of Memes

While Wood is not as ecstatic about Robinhood as she is about Coinbase, it is a major holding in her various funds. Back in 2018, Robinhood made the decision to list Dogecoin, the first "meme" coin and one of the more useless coins out there. Dogecoin offers no promising tech advancement for crypto developers. It was designed as a joke. Nonetheless, the coin has skyrocketed for early buyers.

Dogecoin Price data by YCharts

An investor on Robinhood might think that Dogecoin is one of the most important coins in the crypto universe. On Robinhood you can buy Bitcoin, Ethereum, Dogecoin, Litecoin, Ethereum Classic, Bitcoin Cash, and Bitcoin SV. In other words, on Robinhood you can buy Bitcoin, Ethereum, one of the Bitcoin or Ethereum spin-offs, or you can buy a joke. So Robinhood would appear to be in the "there are only two cryptos worth buying" camp. If you actually want to research crypto and find the most promising blockchain tech out there, Robinhood is not for you.

Of course, when a major exchange lists a coin for sale, that is a validation of the coin's value. So Robinhood can be criticized -- and has been criticized -- for offering a joke coin to the public. 

Why is Wood buying Robinhood? She believes the crypto revolution is a people-led movement. It's been ordinary people who have bought Bitcoin, and it's the financial institutions that are late to the party. Indeed, her investment thesis for Bitcoin is that sooner or later the "smart money" will follow the popular will. So she prizes Robinhood for its emphasis on popularity and giving the people what they want. 

If you're serious about crypto and blockchain technology, buy shares of Coinbase. And if you think crypto is a lot of fun, add Robinhood as well.

  This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Join Over 1 Million Premium Members Receiving…New Stock Picks Each MonthDetailed Analysis of CompaniesModel PortfoliosLive Streaming During Market HoursAnd Much MoreGet Started Now#1 Buy 25+ Companies #2 Hold Stocks for 5+ Years #3 Add New Savings Regularly #4 Hold Through Market Volatility #5 Let Winners Run #6 Target Long-Term Returns

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Motley Fool Issues Rare “All In” Buy Alert

AvalancheMarket Cap$0Today’s ChangeCurrent Price(3.28%) $3.54$111.37

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What a difference a year makes. Coming into 2021, Avalanche ( AVAX 3.28% ) was a relatively little-known cryptocurrency with a market cap of less than $300 million. That was actually an impressive achievement considering that Avalanche had been launched only a few months earlier.

Fast forward to today. Avalanche now boasts a market cap of more than $27 billion, moving past sizzling-hot Shiba Inu. That's enough to rank its native AVAX token as the No. 11 biggest cryptocurrency in the world, according to CoinMarketCap. But could buying this hot cryptocurrency make you a fortune now?

Image source: Getty Images.

Making buyers a lot of money

There's no arguing that early buyers of Avalanche are now much richer. An initial $1,000 investment at the beginning of 2021 would now be worth well over $34,000. 

This isn't a case where only the early birds get the worm, though. Even if you had waited halfway through the year to scoop up Avalanche tokens, you'd still be doing very well. The cryptocurrency has delivered a return of nearly 11X since early July.

What if you still missed the boat and didn't buy Avalanche until a month ago? No worries. Your gain would still be around 90%. 

Sure, Avalanche seems to have leveled off for now. However, that's the situation for many other cryptocurrencies. Based on its historical performance, it could be only a matter of time before Avalanche again goes on a tear.

Behind Avalanche's success

There are thousands of cryptocurrencies. Why did Avalanche break out while many haven't? The best answer is its blockchain architecture.

Like Ethereum ( ETH 1.84% ), Avalanche's platform supports smart contracts. But it's the differences with Ethereum that have made Avalanche increasingly popular. In particular, Avalanche is much faster and has much lower fees. These advantages are made possible by Avalanche's three interoperable blockchains: 

Chain (X-Chain): supports the creation and trading of the native AVAX tokens.Contract Chain (C-Chain): facilitates the creation of decentralized apps based on smart contracts.Platform Chain (P-Chain): coordinates validators that verify transactions and supports the creation of dynamic sets of these validators called subnets.

Thanks to this triple-blockchain design, Avalanche can process more than 4,500 transactions per second and still be highly scalable. Its "time to finality" (when a transaction has been irreversibly finalized as an addition to the blockchain) is under two seconds. By comparison, Ethereum can process in the ballpark of 14 transactions per second with a transactional finality of six minutes.

These advantages are resulting in the increased adoption of Avalanche. Deloitte announced last month that it's working with Ava Labs to develop a disaster recovery platform built on the Avalanche blockchain. This system will help state and local governments prove their eligibility to receive federal funding for emergencies. 

Avalanche already has more than 150 projects in its ecosystem. These projects include decentralized finance (DeFi) wallets and non-fungible token (NFT) marketplaces. 

A fortune in your future?

Let's return to the key question. Can buying Avalanche make you a fortune? I think the answer is yes.

Allow me to qualify that answer, though. I don't expect that Avalanche will deliver a 34X gain over the next year as it has over the previous 12 months. If it did that, it would be bigger than every other cryptocurrency on the market right now other than Bitcoin. That's possible but not probable.

It's also important to note that Avalanche's success going forward is joined at the hip with broader acceptance of cryptocurrencies in general. While I fully expect continued momentum for cryptocurrencies, there's always a possibility that circumstances could change.

My view, however, is that Avalanche could very well generate big returns going forward. I can definitely see how Deloitte's adoption of the blockchain could drive increased interest. Rising interest would almost certainly lead to a rising price for the AVAX token. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Join Over 1 Million Premium Members Receiving…Get Started Now#1 Buy 25+ Companies #2 Hold Stocks for 5+ Years #3 Add New Savings Regularly #4 Hold Through Market Volatility #5 Let Winners Run #6 Target Long-Term Returns

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*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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Motley Fool Issues Rare “All In” Buy Alert

EthereumMarket Cap$0Today's Change(2.14%) $88.39Current Price$4,211.52

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With all the buzz surrounding cryptocurrency, many investors might be ready to take the plunge. The fantastic gains don't hurt, either. Bitcoin, the original cryptocurrency, is up more than 200% this year alone. Shiba Inu, the 2021 cryptocurrency breakout story, is up a mind-boggling 60,000,000% over the past year. It's enough to whet any potential investor's appetite. 

But between Bitcoin and Shiba Inu, there's a whole slew of cryptocurrencies growing in market cap. It can be confusing, since many of them offer similar benefits. That's why if you're new to cryptocurrency, I recommend getting your feet wet in a cryptocurrency that's easy to understand but also offers high potential for gains. That's why I'd start with Ethereum ( ETH 2.14% ).

Image source: Getty Images.

What is Ethereum?

Ethereum is a platform that uses blockchain to facilitate transactions, and developers use its native token, Ether, for payments. Because it's a platform, not just a digital token, it has intrinsic value that could make it a more secure investment than cryptocurrencies that are strictly currency. Blockchain, in short, is a digital database of transactions, like an online ledger where records of transactions are sealed and kept. 

The platform is a hub for Defi, or decentralized finance. That indicates transactions that are performed peer to peer without a central authority. It makes it simpler and faster for two parties to shake digital hands, so to speak, without interference or regulations. This extends beyond financial transactions to all sorts of programs, or smart contracts, that are replicated across all computers tied to the Ethereum network. That makes it a scalable model that can be used for many purposes.  

While that has positive implications in terms of the democratic nature of the beast, as well as simplicity, it also needs extra protocol to maintain its security. For now, it does that in the form of proof of work, or POW, the same protocol as Bitcoin. It involves mining, or users who validate transactions by solving complex math puzzles and earning Ether in the process.

What is Ethereum's future?

Ethereum is practically a crypto dinosaur compared to newer tokens. That gives it some stability and security that hyped-up crypto tokens with limited utility don't yet possess, but it also means that Ethereum, which launched in 2015, may be behind the curve with its older technology. The three main issues that need to be addressed are energy consumption in the mining process, limited disk space as the blockchain grows, and limited capacity, or speed, as more people use the platform.

That's why developers are working on a big upgrade, called Eth2. The main way they want to solve this "trilemma" is by expanding the block on the chain, allowing for more and faster transactions. The upgrade is meant to speed up transaction time from about 30 per second to an industry-leading more than 100,000 TPS. The platform is also moving from a proof-of-work validation system to a proof-of-stake validation, where miners stake their Ether to transact instead of solving puzzles. These upgrades, which should take place in 2022, make the platform more scalable and less energy-guzzling and bring it into the modern crypto world. Users get the best of both worlds: a tried-and-true system with state-of-the-art technology.

Why Ethereum is a good place to start

Investing in cryptocurrency is a whole new system to understand for investors. There are similarities to the stock market, but it requires a new set of ideas and fundamentals. Ethereum gives investors some stability while they're learning the ropes, as opposed to some of the newer and more speculative cryptocurrencies. It also still provides room for growth as the system expands and improves.

That's not to say that I recommend investing in cryptocurrency altogether. There's a lot of potential for gains, but cryptocurrency is still a relatively new phenomenon with a short track record and huge market caps. Investors should only put in what they can afford to lose.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Join Over 1 Million Premium Members Receiving…New Stock Picks Each MonthDetailed Analysis of CompaniesModel PortfoliosLive Streaming During Market HoursAnd Much MoreGet Started Now#1 Buy 25+ Companies #2 Hold Stocks for 5+ Years #3 Add New Savings Regularly #4 Hold Through Market Volatility #5 Let Winners Run #6 Target Long-Term Returns

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EthereumETH$4,211.52(2.14%)$88.39

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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