I’ve been on the sidelines with cryptocurrencies, but it’s an asset class that is fascinating for many reasons. For many crypto investors, the conversation about best cryptos begins and ends with Bitcoin (CCC:BTC-USD). However, it’s becoming increasingly apparent that Bitcoin does not need to be your digital currency of choice.
That’s because there’s been a massive wave of altcoins that have entered the cryptocurrency market. Altcoins (or alternative coins) are loosely defined as any coin that is not Bitcoin. Based on that definition, Ethereum (CCC:ETH-USD) is the most well-known altcoin. But there are now dozens of other altcoins competing for attention. And some of these may be considered the best cryptos for speculative investors.
For a long time, the price of altcoins had a strong correlation to the price of Bitcoin. But that has started to change. This may be a sign of a maturing market. Altcoins are typically created to solve specific issues that Bitcoin leaves unresolved. However, in a free market, investors are free to vote with their dollars (in this case their digital dollars). And in that regard some altcoins are looking more useful over time.
With that in mind, here are seven of the best cryptos that you may want to consider.
7 Best Cryptos for a New Season
I didn’t include Ethereum on this list of best cryptos, but that’s not because it doesn’t belong. However with only room for seven of these, I didn’t want to take up a spot with the altcoin that many investors have already formed a strong opinion about.
And that brings me to Cardano, which many crypto analysts view as a hedge against Ethereum. One thing I liked about Cardano when it first launched was that it’s a proof-of-stake (PoS) coin. This set it apart from almost all other altcoins at this time. While this will not always be an advantage, it did give Cardano a first mover advantage as it tried to separate itself from Ethereum.
Cardano is launching its network in five phases. The network will not officially launch until all five phases are complete. It’s a methodical approach that may frustrate some investors. However, ensuring it can be right and maybe not first, would appear to be a solid approach.
Cardano is a proof of stake (PoS) coin that uses the Ouroboros algorithm.
Speaking of PoS coins that serve as a hedge against Ethereum, we have Neo.
Neo is the native currency of the NEO blockchain. It is frequently referred to as the “Chinese Ethereum.” That’s because the NEO blockchain enables smart contracts. And the sheer size of the Chinese market offers investors a reasonable assurance that Neo will find a space among the best cryptos. However, investors should be looking at Neo as a hedge against Ethereum.
Neo is slightly less decentralized than Ethereum. That’s because the network relies on fewer than 10 nodes to make up its decision making.
The total supply of Neo is limited to 200 million. Approximately 165 million have already been distributed. This means that the value of NEO should rise as demand increases.
A recent catalyst for the cryptocurrency is the blockchain’s launch of the N3 mainnet. Neo’s price shot up over 150% after the launch. And even though there’s been some correction since that time, Neo looks like a solid option for crypto investors.
Litecoin has surged in 2021 because it looks like a strong candidate to address one of the strongest obstacles to cryptocurrency adoption. The cryptocurrency offers faster block hashing times and lower transaction fees than Bitcoin. This has many analysts believing Litecoin could be an altcoin that achieves retail adoption.
So you can imagine how excited investors got to hear that Walmart (NYSE:WMT) would begin to accept Litecoin as a method of payment. There was only one problem. The story was falsified. There’s no indication that Litecoin had anything to do with the deception. So I imagine that any selloff in the altcoin will be short lived.
That means investors are likely to focus on the reasons they like Litecoin to begin with. And the company is also giving investors another catalyst with its participation in the growing non-fungible token (NFT) market.
Binance Coin (BNB)
Binance Coin is another Ethereum rival. The company recently launched the Binance Smart Chain (BSC), which is clearly breaking up the monopoly Ethereum enjoyed with the DApp and DeFi communities.
Like Cardano and Neo, Binance is a utility token. So the value of the coin is tied to its utility and how much demand there is for that utility. In fact, part of the bullish case for Binance is that, unlike some utility tokens, there are many use cases for the BNB token with more being developed on a regular basis. In theory this means that there will be increased demand for the altcoin, which will increase its price.
Binance Coin is the fifth largest cryptocurrency with a market capitalization of $73 million. It’s also showing an impressive amount of liquidity, which is being combined with high trade volume.
Stellar Lumens (XLM)
Stellar Lumens strikes me as one of the more compelling altcoins because of its use case in facilitating cross-border transactions. As I wrote in January, “Stellar’s decentralized network allows users to create a digital representation of virtually any currency and then send or trade it across a single network. In theory this will allow coders and web developers to build functions like currency exchanging and trading systems directly into the sites and apps they develop.”
It’s a cousin of sorts to Ripple (CCC:XRP-USD). However, whereas Ripple targets banks, XLM is used primarily (although not exclusively) by individuals and small businesses.
Stellar Lumens illustrates the bullish and bearish case for altcoins. In this case, the coin has a specific use case. But that use case generated 4.3 million accounts the last time I looked. Since the Lumens (which is the altcoin for the Stellar network) has no value in and of itself, the value of the altcoin will come from the value of the Stellar network. The scarcity of the coin will also help add to its value.
Earlier this year, I don’t think I would have put Polkadot on this list. But the DOT token has become the ninth largest cryptocurrency by market cap. A key reason for this was the successful launch of the company’s first parachain earlier this year. The polkadot parachain can handle as many as one million transactions per second.
Polkadot is an ecosystem of connected blockchains. The central chain provides security for the entire network, while the side chains (which are called parachains) make the Polkadot network more scalable. Some would even say the network is more scalable than Ethereum.
Parachains will also allow developers to build “bridges” that allow parachains to connect to external networks (think Ethereum or Bitcoin blockchains). A key benefit of parachains will be the ability to create a smart contract on the Ethereum blockchain. But the contract could simultaneously interact with a blockchain that is designed for different information. Both transactions could be managed in parallel.
Last on this list of best cryptos is Chainlink, which may seem like a grizzled veteran, having been launched in 2017. Like many altcoins on this list, Chainlink is primarily used for smart contract applications. Chainlink is known as a crypto “oracle” that uses data from the outside world to confirm aspects of a smart contract.
For example, if a contract is supposed to make a payment when certain conditions are met, Chainlink is used to confirm the conditions were met. This may not seem like a big deal, but it is.
This is one aspect of the blockchain that is making it popular in the DeFi sector. As Alex Sirois wrote, blockchains “don’t allow data to be gathered from outside their chain or for data to be sent off their chain.”
Chainlink provides a potential solution for both of those issues, and that will likely by enough to keep interest in LINK strong.
On the date of publication, Chris Markoch 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
Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for InvestorPlace since 2019.
Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!