When planning to invest in cryptocurrency, you should immediately think about diversifying your investment portfolio. There are several diversification strategies and each of them deserves attention. An investment portfolio can include coins of different blockchains, assets targeted at different market segments, tokens with different functionality, etc.
The cryptocurrency market is developing very quickly. Despite the fact that all digital assets are classified as high-risk, there are already more and less risky ones among them. Conditionally low-risk usually include coins from the TOP-10 rating by market capitalization, and Bitcoin and Ethereum should be present in the portfolio of any serious investor. You can track the ETHBTC exchange rate and quickly exchange these assets on almost any trading crypto platform.
Ethereum – the founder of the DeFi segment
Bitcoin was positioned as a new generation of money. The Ethereum team went further, proposing to store any information in the blockchain at all, and thus laid the foundations for a new type of economy.
The Ethereum blockchain is the first universal smart contract platform designed to run decentralized applications. It is the capabilities of the Ethereum virtual machine (EVM) that represent its main value. In fact, the Ethereum blockchain provides a ready-made base-level solution suitable for creating applications for various purposes.
Applications running on the same platform can interact with each other. The main component of the network is smart contracts, programs that control the fulfillment of the terms of the transaction.
The functionality of the Ethereum network is already used in various industries. On the basis of the blockchain, you can:
- Manage logistics.
- Manage paperwork.
- Digitize data to identify users.
- Create non-fungible tokens.
Thousands of applications operate on the Ethereum blockchain, and this eloquently indicates its demand. At the moment, Ethereum firmly holds the position of the flagship of the DeFi segment and there are no visible prerequisites for a change in the situation in the near future.
Axie Infinity – the first universe of Game-Fi
Axie Infinity is one of the most popular blockchain games in the “play and earn” format. Participants create virtual pets, build kingdoms for them, fight among themselves and receive rewards for gaming activity in AXS tokens. Token holders get the right to vote in the discussion of the further development of the game.
The game was launched on the Ethereum blockchain and was inspired by the Pokémon universe. The game features virtual creatures, the Axies, which are created and raised by the players themselves. To grow them, you need to collect game tokens. Each such animal is an NFT, and it takes time and effort to create it. This gives it value that can be realized by selling Axie for money. Trading on exchanges is mainly carried out in pairs with fiat currencies, and a direct exchange of AXS to ETH is available on peer-to-peer exchange platforms and crypto exchanges.
Cryptocurrencies of the gaming universe
There are two internal currencies in the Axie Infinity universe: Smooth Love Potion (SLP) and Axie Infinity Shard (AXS). Players earn SLP tokens through in-game interactions, and the resulting coins are used to grow new Axies. Axie Infinity Shards is a typical governance token that was launched in early 2021. Since the launch of AXS, the game has become the first truly decentralized game run by a community of players.
AXS had a starting price of just over $0.17 when it entered the market. By the fall of 2021, the coin reached its all-time high of $157.56. From that time until today, the asset has been in a protracted downtrend. Analysts’ opinions regarding the further market behavior of AXS are diametrically opposed. There is an opinion that by 2025 it is possible to achieve a new historical maximum, although the current market situation does not inspire optimism.
What is the best coin to invest in
Ethereum is one of the “blue chips” of the young market. This is a time-tested fundamental project with prospects for further development. The ETH coin is quite stable and more predictable compared to many other digital assets and is likely to rise in price in the long term. After the blockchain transitions to the Proof of Stake algorithm, the coin can be staked, which provides an opportunity for passive income. Of the minuses – the high price of the coin and the inflationary model of tokenomics.
With long-term prospects for investing in AXS, the situation is more complicated. The coin is currently trading at around $4.6 per unit. Unlike ETH, the AXS supply is limited. The coin can be staked with a yield of about 46% per annum. However, the possibility of realizing a theoretically large potential for growth is directly related to the popularity of the game. By the combination of characteristics, AXS is a high-risk asset and before investing in it, you need to conduct your own market analysis.
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