Much attention has gone to small-caps and meme coins in this cycle, but let’s not forget about the projects that have stood the test of time or are offering actual technological benefits to this space.
Here’s my list of preferred blue-chip digital assets that you should pay attention to.
Bitcoin (BTC)
The flagship crypto continues its price-discovery mode, smashing through its all-time high (ATH) of $73K set in March.
Despite its mammoth market cap of around $1.8 trillion, BTC is far from done. It is currently on the cusp of hitting $100,000, which could happen within hours of publishing this.
Here are some notable events and stats:
— Its hash rate (an important measure of network security) continues to climb.
— Ordinals and, in more recent times, Runes, have massively expanded utility by allowing for the creation of fungible tokens on Bitcoin’s blockchain.
— Stacks and other related layer-two scaling solutions (L2s) have been helping the world’s first blockchain overcome poor scalability.
— Around $100 billion of BTC managed by 11 spot ETF providers since they were given the all-clear to offer these publicly-tradable funds in January.
— Following El Salvador’s success with Bitcoin, at least so far, I wouldn’t be surprised if other (albeit small) countries will adopt BTC as legal tender, especially where hyperinflation has plagued economies.
An important consideration to make is that BTC will most likely become less volatile (in terms of % change) compared to previous cycles as it becomes even more established as an investment.
This will quell historical fears that it is an unreliable currency due to its high volatility. Yes, there will still be price swings, but far less common and severe than what we’ve experienced to date.
Cardano (ADA)
ADA remains one of my favourite assets but its price performance (or lack thereof) still leaves much to be desired.
Credit where it’s due and criticism where it’s needed.
Fortunately, the situation is looking a lot more optimistic for ADA holders, with the coin up by ≈60% over the past seven days.
I am including this ahead of Ethereum because its significantly lower market cap and distance from its ATH represent a higher possibility of it outperforming Ether this cycle.
There’s another phenomenon at play. Some people might be more inclined to go for ADA — or any other “cheaper” crypto for that matter — because of a much lower unit price.
At the time of writing, 1 ETH = 4,070 ADA.
Don’t get me wrong: It’s plausible for ADA to outperform ETH down the track. However, it’s nonsensical to disregard a crypto asset because of high unit prices.
Its fundamentals, community sentiment, utility and quality partnerships matter more than picking up a bag of crypto with dubious potential. FYI, I’m not speaking about Cardano in this case — I do believe in this project — I am referring to cryptos in general, especially those with a sub-$1 unit price.
There are three good reasons why I’m putting Cardano ahead of Ethereum:
1) Charles Hoskinson recently announced in a recent live stream that he will work with US policymakers in 2025, to improve crypto policy across the country.
2) Hoskinson also mentioned that Emurgo — one of the three major entities beyond Cardano, which is helping boost Web3 adoption for this blockchain — is working with BitcoinOS to bridge smart contracts on Bitcoin with Cardano’s blockchain.
This is readily possible and Bitcoin and Cardano^ use unspent transaction output (UTXO) models for displaying user balances on their ledgers, as opposed to Ethereum’s account-based model.
^ Strictly speaking, Cardano opts for the extended UTXO variant.
3) Midnight is a partner chain produced by Input Output Global (IOG) — another major institution behind Cardano, of which Hoskinson is its CEO.
IOG launched the Midnight testnet last month, offering developers the opportunity to create privacy-focused regulatory-compliant applications.
“Midnight is a fourth-generation cryptocurrency. It’s being built to augment all the cryptocurrencies…It works with Ethereum, it’s gonna work with Solana and Cardano, and we’re negotiating with other ecosystems to see how we can bring it in…The goal is to add private smart contracts.”
Surprise AMA 11/17/2024 by Charles Hoskinson (“What is Midnight?”)
Many Cardano holders are eagerly awaiting news from Midnight concerning an upcoming airdrop for Cardano holders who mine w
Stay up-to-date with Midnight and its associated airdrop here. I also recommend reading its litepaper.
Ethereum (ETH)
In my latest article about blue-chip digital assets to hold, ETH was sitting pretty at number two.
So far in 2024, I’ve been disappointed with its mediocre performance, slow base chain and expensive fees.
Yes, Bitcoin’s on-chain situation isn’t anything to write home about, but at least BTC is performing well and offering plenty of volatility for day traders, unlike ETH.
For perspective, Bitcoin is up by 33% from its 2021 ATH around $69K, whereas ETH is currently 34% away from its peak.
While Proto-Danksharding has benefited Ethereum courtesy of L2s doing some heavy lifting and handling 95% of its transactions, it’s far from ideal, especially when Solana manages to do it all directly on its network.
So why I am featuring this here in light of my criticisms? I still believe in the project’s long-term prospects. It remains the leading smart contracts platform in terms of protocols and total value locked; it’s leaps and bounds ahead of Solana in second place, despite the latter’s rise in recent years.
Moreover, Ethereum devs are working on upgrades (see Ethereum’s roadmap) that will eventually lead to cheaper transactions and a lot more scalability directly on the base chain.
In Ethereum’s defence, they’ve managed to successfully implement these improvements over the years (see Ethereum Improvement Proposals), albeit much slower than expected.
However, if it doesn’t pick up the pace and make the necessary improvements to compete with Solana and other L1s, I’ll continue to push this down the list.
Uniswap (UNI)
The leading decentralised exchange has remained a consistently top performer since hitting the scene in 2020.
Long gone are the days when you had to rely on a centralised crypto exchange to get your hands on your favourite altcoins and tokens.
Uniswap provided a game-changing strategy by allowing people to readily swap between one ERC-20 token and another without having to directly go via Ethereum courtesy of liquidity pools.
Even so, there was a major issue that plagued the protocol, let alone every DEX running on Ethereum: exorbitant fees.
During the NFT craze between late 2020 and 2021, token swap fees often went into hundreds of dollars for a single transaction.
Moreover, Uniswap is facing strong competition from rivals such as Pancake Swap and Raydium. Mind you, the latter is exclusive to Solana, and Uniswap, despite being multi-chain, isn’t compatible with Solana.
Nonetheless, UNI — the protocol’s native token, boasts a $5.5 billion circulating market cap and has 60% of its tokens already in circulation. At present, approximately $5.7 billion of value is locked in Uniswap (see total value locked at DefiLlama).
I expect the token and protocol to set new records in the coming months with the bull market heating up once again. The advent of L2s and EVM-compatible chains, alongside UX/UI improvements, will make it easier and cheaper than ever to conduct token swaps.
Polkadot (DOT)
Founded by Gavin Wood, an instrumental member behind the creation of Ethereum, Polkadot promotes itself as “a scalable, interoperable & secure network protocol for the next web (Web 3)”.
Its blockchain’s architecture differs from layer-one projects in this space by using parachains, a set of parallel blockchains that are coordinated by Polkadot’s central (relay) chain. Most of the work is done by the parachains.
What stands out for me about Polkadot is its focus as a Layer-0 blockchain, i.e., it focuses on interoperability by accommodating multiple L1 networks, allowing for overall scalability improvements.
Additionally, it is much more decentralised than most projects in this space (see the decentralisation section towards the end), and has the fourth-highest number of monthly active developers.
At Polkadot Decoded 2023, Wood spoke about one of the most anticipated developments for this ecosystem, colloquially referred to as “Polkadot 2.0”, as opposed to Polkadot’s status up until 2023 (Polkadot 1.0).
Parachains are added to the relay chain depending on the number of available slots, which are freed up every few months via on-chain governance. One needs to purchase an available slot through parachain slot auctions to ensure their block is included in each relay chain block,
The new iteration of Polkadot will allow for much more flexibility and efficiency in core usage/parachains.
I recommended checking out Polkadot Docs for in-depth explanations of this and related topics, which cover some of the information put forward by Wood at Polkadot Decoded 2023.
Avalanche (AVAX)
Unlike most L1s that have a single chain, Avalanche has three. These are:
— The contact chain (C-chain), which is designed for running smart contracts and DeFi apps, which works with Ethereum wallets such as Metamask.
— The exchange chain (X-chain) for sending and receiving tokens. This is not compatible with smart contracts. Moreover, this option utilises a directed acyclic graph (DAG) to handle high throughput and achieve ultra-fast finality.
— The platform chain (P-chain), which is primarily used for staking AVAX.
You can learn more about these networks at this Avalanche Support page.
Last month, the Avalanche Foundation declared a major partnership with Visa, regarding the launch of a crypto-payments card linked to AVAX non-custodial wallets.
Called Avalanche Card, this credit card offers payments in Wrapped AVAX, USDC and a handful of other digital assets. It works with any merchant that accepts regular VISA cards.
This is currently available in Latin America and the Caribbean. However, this is a massive developing market to tap into, with many countries in the region, particularly Argentina and Venezuela, but I doubt this will be available in the latter, at least not for the time being.
Ava Labs is the core development team spearheading the project. It has released a series of whitepapers covering different aspects of Avalanche, including AVAX tokenomics.
Besides this, Avalanche has teamed up with another renowned multinational firm to offer blockchain-based solutions.
First published in November 2021, Ava Labs will be working with Deloitte to build a disaster recovery platform utilising Avalanche’s blockchain to provide more efficient processing of disaster funding for local and state governments in the USA.
Even though this announcement was made three years ago, Deloitte still has Ava Labs listed as one of its key blockchain and digital-asset alliances on its website.
Moreover, BlackRock’s tokenised BUIDL fund has recently expanded to Avalanche and other networks.
All of this demonstrates massive support and a strong belief from institutional investors that Avalanche will be a dominant and reputable blockchain solution moving forward.
Wildcards
Solana (SOL)
Solana has stormed back into the top 10 after collapsing to $10 in January 2023 and has managed to remain in the top 5 since making its way back in at the beginning of this year.
It has established itself as a popular rival to Ethereum — particularly for meme coin enthusiasts in recent months — as it maintains a strong network uptime, high throughput (transactions per second), fast transaction settlement and ultra-cheap transaction fees.
It manages to achieve this all on its own (base) chain. No layer 2s (L2s), no bridging, and no waiting for gas fees to drop, unlike Ethereum.
“Currently, the base Solana transaction fee is set at a static value of 5k lamports (0.000005 SOL) per signature. On top of this base fee, any additional prioritization fees can be added.”
Solana Docs > Fees on Solana
If it’s done so well and is currently sitting in the fifth spot, how come I am featuring it towards the end?
I give credit where it’s due and criticism where it’s needed. Here’s the elephant in the room with Solana: extensive VC funding compared to other chains.
In a discussion at Token 2049 Singapore last month, Edward Snowden spoke about the problem with centralised blockchain systems, singling out Solana:
"Solana is centralized" @Snowden #Solana pic.twitter.com/AwdIcYbp6Y
— St₳ke with Pride 🌈 SPO & DRep (@StakeWithPride) October 1, 2024
on X/Twitter
Hedera (HBAR)
What makes Hedera stand out from almost every other mainstream crypto project is that it doesn’t use blockchain technology. Instead, it uses a directed graph (i.e., the Hedera hashgraph), which, like the blockchain, is another form of distributed ledger technology.
“A blockchain is like a tree that is continuously pruned as it grows — this pruning is necessary to keep the branches of blocks from growing out of control and to ensure the ledger consists of just one chain of blocks. In hashgraph, rather than pruning new growth, such growth is woven back into the body of the ledger.”
Hedera Hashgraph whitepaper (Version 2.1), August 2020
Here’s a brief and simple video explainer of the Hedera hashgraph.
Other crypto projects that opt for a DAG setup include Iota (IOTA), Fantom (FTM) and Nano (XNO).
With roughly 75% of its max supply already in circulation, a transparent token emission schedule, and staking rewards, it offers sound tokenomics.
HBAR has been one of the best performers in the top 100 over the past seven days, up by >100% and pushing its way back into the top 30.
Check out this resource to delve deeper into blockchain tech, DAGs and hashgraphs.
Render (RENDER)
Rendering complex images comes with cost and energy limitations, leading to an increasing need for cloud-based rendering as an alternative to on-site render farms.
These cloud-based services can be very costly despite the convenience of remotely accessing the required processing power.
This is where Render Network (RN) comes in, with its vision to democratise access to processing power through blockchain technology.
There is a competition for resources within the centralized GPU cloud — from GPU rendering and cloud streaming to AI training — leading to availability constraints and prohibitively expensive pricing for many artists.
RN whitepaper
RENDER has established itself as another DePIN token to watch, with an impressive performance since 2023 making it worthy of a mention.
I haven’t included this in the main list it’s a bit early (relatively speaking) to describe this as a “blue-chip” asset. However, if it continues its momentum it will most likely become a top 20 crypto within 18 months.
Polygon (POL)
Operating as a sidechain independent* of (yet highly compatible with) Ethereum, its major advantage in the 2021 bull run was to offer an EVM-compatible alternative that could handle more transactions with much cheaper gas fees.
Once a mainstay of the blue-chip projects, Polygon appears to have fallen out of favour in recent years, particularly since the rapid rise of Ethereum L2s.
Nonetheless, it remains an active project and many crypto projects (and their tokens) still use the Polygon PoS blockchain.
A major use case of this sidechain to keep an eye on is the development of the Polygon zkEVM, a zero-knowledge L2 that Polygon Labs (the main entity behind said blockchain) claims to be “EVM-equivalent”, i.e., 100% functional with the majority of Ethereum applications, tools and infrastructure.
This is essential as we need as many effective scaling solutions as possible, in addition to zero-knowledge proofs playing an important role in achieving privacy on public blockchains, such as Bitcoin and Ethereum.
* Many people incorrectly refer to Polygon as an L2, an off-chain network built on top of a layer one blockchain (L1), usually Ethereum.
N.B. In November 2023, Polygon completed the migration of its (former) native taken, MATIC to POL. Hence, some sources might refer to the token as “POL (ex-MATIC)”.
BNB Chain (BNB)
The native asset of what was formerly Binance Smart Chain, this deflationary coin has solidified itself as another strong contender to Ethereum in the smart contracts space.
The main reason why I’ve featured this towards the end is that I’m not pleased with its level of decentralisation.
Unlike Bitcoin, Cardano and Ethereum, BNB Chain only has 45 active validators, with the top 20 controlling the majority of network voting power.
Anyone with some appreciation or understanding of decentralisation knows that this isn’t sufficient.
Yes, there’s still some decentralisation and is a better option than a single entity controlling all the operations (like a conventional company), but you’re comparing apples and oranges.
What about XRP?
This should have been included here but I realised just before publishing this that I completely forget about it. It’s unforgivable for XRP fanatics, I know.
For the sake of brevity, please consult this piece I wrote a few months ago, which includes why it’s also worthy of being considered a blue-chip asset.
An important point about decentralisation
I know some people have an ambivalent attitude towards Solana, especially with its reputation as not being very decentralised.
Whilst it is less decentralised than Bitcoin, Ethereum, Cardano, Polkadot and other networks, it’s unfair to single out Solana.
A key metric used to objectively determine a network’s level of decentralisation is the Nakamoto Coefficient (NC). This figure represents the minimum number of validators that could theoretically collude and control a third** of a network’s total stake.
The idea was conceived by Balaji S. Srinivasan and Leland Lee in July 2017. I have included the original post below.
The higher the number, the more decentralised the network is.
**Srinivasan and Lee’s paper uses a 51% threshold to calculate the NC, which corresponds to a similar phenomenon for Proof-of-Work (mining) systems, i.e., the 51% attack.
Solana’s NC is currently 19. For context, here are the coefficients for some of the abovementioned projects:
— Avalanche: 24
— Binance (which I assume is referring to BNB Chain): 7
— Hedera: 8
— Polkadot: 132
— Polygon: 4
According to the official Nakamoto Coefficient website, the data are refreshed every six hours.
Do bear in mind this is just one source, so it might not be the most accurate information publicly available. Moreover, this isn’t the only metric used to ascertain the amount of network decentralisation for a given blockchain, but it’s a useful indicator.
I’ve given higher weighting to projects listed here with (relatively) more decentralisation than others. I’ll let you be the judge as to whether there is “enough” network distribution.
Then again, most people in this space have no or little consideration of decentralisation and focus solely on the lucrative gains many alts have generated over the years.
Additional thoughts
Sui (SUI) is a notable mention, with it gaining much traction on crypto Twitter, not to mention its significant developer growth in recent months as an emerging L1.
It is not yet worthy of being listed as a blue cap purely because it hasn’t been around long enough to justify featuring it here.
However, Jayden Levitt, a popular, knowledgeable writer on Medium and other platforms, speaks very highly of this up-and-coming project; I concur with much of his analysis and recommend following this project.
Chainlink (LINK) is another project worth holding, but it’s gone far down my list of preferred assets. I will be providing an update about this project in the coming weeks, so stay tuned for that.
In the meantime, here is a piece I wrote last year dedicated to Chainlink.
Which altcoins deserved to be on this list and why? Leave a comment below.
Thanks for reading. Happy Bitcoin/crypto trading and investing.
Lorenzo
Disclaimers
• N.B. None of this is financial advice; I am not a financial advisor. You are ultimately responsible for crypto investments, let alone in any asset class.
• The opinions expressed within this piece are my own and might not reflect those behind any news outlet, person, organisation, or otherwise listed here.
• Please do your own research before investing in any crypto assets, staking, NFTs or other products affiliated with this space.
• Bitcoin (BTC), Ethereum (ETH) and Cardano (ADA) collectively account for about 65% of my crypto portfolio at the time of writing.