There’s a strong argument to be made that the cryptocurrency market is as strong as ever based on the fear and greed index. However, rather than focusing on the temperature of the market we will be focusing on utility. Real world utility continues to be the differentiating hallmark between large-cap cryptos with futures and those without. The crypto winter put an end to rampant speculation and forced crypto projects to focus much more on real world use cases. Investors quickly understood the danger in playing in the highly speculative world of large-cap cryptos where useless memes led to overnight riches for some but broken dreams and substantial losses for many more. Utility will continue to be in fashion and that makes these projects worthwhile.
Ethereum (ETH-USD)
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Ethereum (ETH-USD) is the second most valuable cryptocurrency for a reason, deep utility. I would argue that Ethereum is even more valuable than Bitcoin (BTC-USD) for that reason. If you’re looking for pure utility then Ethereum has to be your first choice.
Ethereum is the dominant force in smart contracts and web3 development and has carved out a very strong market share overall. Smart contracts are programs stored on blockchains that execute a function when certain conditions are met. In other words, in order for anything to happen in the cryptocurrency space, a smart contract is necessary.
Everything that is being developed in the cryptocurrency space is in some form depending upon a smart contract. Thus, Ethereum’s dominant position makes it one of the most utilitarian firms overall.
That isn’t to say that ETH is without problems. It clearly has efficiency and speed problems. However, given its size, it’s reasonable to anticipate that enough resources will be directed toward rectifying those issues that they will be solved.
XRP (XRP-USD)
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XRP (XRP-USD) is a cryptocurrency that clearly has high utility and easy to understand use cases in the real world. It’s also the 6th most valuable cryptocurrency overall at the moment meaning that it’s certainly large cap. So, what does it do? XRP’s Main utility is in cross border payments. Individuals and institutions use it to instantaneously transfer funds as fiat or crypto between jurisdictions.
The project is inherently easier to understand than many other cryptocurrency projects. The world is very much used to the idea of sending money from a financial institution in one country to a financial institution in another. And, the transfer of the money from one nation’s currency to another as part of that process.
That’s a much easier use case to understand than blockchain, NFTs and any other number of esoteric cryptocurrency-related ideas. XRP hasn’t surged above a dollar as many expected, despite winning against the SEC but that doesn’t mean it has any less utility overall.
Bitcoin (BTC-USD)
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Bitcoin (BTC-USD) Is listed last here for a reason, its utility is controversial. Put more succinctly, many wonder if Bitcoin has any utility at all. It’s easy to make arguments either way in that regard.
Naysayers will say that Bitcoin is nothing more than a Ponzi scheme which has grown wildly out of control. Those who are more optimistic will note that fiat currencies are valuable because of the same decree, the masses have accepted it as being valuable.
Whatever the case it is clear that Bitcoin has become an accepted store of value. Its price is a real representation of that fact. It certainly has real world utility in the fact that you can use it to buy fiat dollars, for one, but also as a means of transaction by itself. The list of goods and services that one can directly buy using Bitcoin continues to grow. That’s as a real world as value gets and gives BTC an edge when compared to other large-cap cryptos.
On the date of publication, Alex Sirois 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 Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
