Both Ethereum and Solana should be on the radar of investors looking for cryptocurrencies with proven utility.
According to The Motley Fool Ascent's Cryptocurrency Investor Trends for 2024 Survey, one of the main factors preventing investors from investing in cryptocurrencies is the clear lack of usefulness of many major cryptocurrencies. More than a third (35%) of respondents who did not own cryptocurrency said they "didn't know what to do with it."
That seems fine to me. It's hard to see any use for dog-themed meme coins, and even bitcoin (btc 0.03%) It remains primarily a long-term store of value that you buy and hold (and don't use in your daily life). But don't despair, cryptocurrency investors, because there are two high-quality cryptocurrencies that offer significant utility and should definitely be on your radar if utility is your priority.
Ethereum
My most useful cryptocurrency is Ethereum (ETH 0.38%). Offers a very diversified offer blockchain ecosystem and many everyday ways to use your cryptocurrencies. For example, you could use your Ethereum to buy a non-fungible token (NFT) that has been minted on the Ethereum blockchain. You could use your crypto to participate in a decentralized finance (DeFi) to earn additional returns on your investment. You can exchange your Ethereum for another token using any of the decentralized exchanges running on the Ethereum blockchain. Or you could use your crypto to play blockchain or metaverse games built on top of Ethereum.
Image source: Getty Images.
Here you get the idea: Ethereum is much more than just a currency. It also works as a digital entry ticket giving you access to everything that happens within your blockchain ecosystem. That's a big problem, because Ethereum remains dominant in almost every major sector of the blockchain world. For example, Ethereum still accounts for more than half (56%) of all DeFi activity in the blockchain world and remains the undisputed leader when it comes to NFTs. So this entry ticket is quite valuable.
solarium
My second choice is solarium (SUN 1.83%), which is very similar to Ethereum in terms of utility. Basically, anything you can do with Ethereum, you can do with Solana. You can use your Solana to purchase NFTs minted on the Solana blockchain, play blockchain or metaverse games created on the Solana blockchain, and exchange them for other tokens using decentralized exchanges running on Solana.
But Solana has a unique mobile crypto strategy. Unlike Ethereum, Solana has a crypto phone (the Saga) that is optimized for use with the Solana blockchain. This device also offers access to mobile apps that you can't find on traditional smartphones. And of course, those apps are powered by the Solana blockchain, creating even more utility opportunities.
Utility Stocks vs. Utility Cryptocurrencies
In some ways, these two utility cryptocurrencies are similar to public service actions. Like companies that provide basic services such as electricity, gas, and water, these two cryptocurrencies provide basic blockchain services to users and developers. Both are known as Layer 1 blockchain networks and both are building blocks for the creation of new products and new services. If utility is your priority, then you should probably focus on Layer 1 blockchains as a starting point.
However, utility cryptocurrencies are very different from utility stocks in one important way: their explosive upside potential. That's something you don't get from reliable, stable, dividend-paying stocks that provide basic services. Solana, for example, Its value skyrocketed by more than 900% last year. And Ethereum is up more than 95,000% since 2015.
The link between utility and valuation
Imagine how much more valuable utilities would be if they could capture just a small portion of all economic activity based on their basic services. What if water companies, for example, could capture a portion of the economic value created by people using water within a home? Or if electrical service companies Could you capture a small portion of the economic value created by people using electricity in their kitchens, living rooms and home offices?
Well, that's exactly what happens with utility cryptocurrencies. The price of Ethereum, for example, is directly related to the amount of economic activity occurring within the Ethereum blockchain ecosystem.
Think about the NFT market. If the size of the NFT market increases in value, so will the price of Ethereum. This is because, in addition to providing a basic service (the blockchain architecture that creators need to create an NFT), Ethereum can also capture a portion of all the economic activity that happens on top of it (people buying and selling these digital assets within of NFT Markets).
Therefore, generally speaking, the greater the utility of the cryptocurrency, the higher its valuation. The more you can do with a cryptocurrency, the larger its blockchain ecosystem should be. And the larger the overall blockchain ecosystem, the greater the potential opportunity for growth.
When it comes to choosing between various utility cryptocurrencies, take the time to analyze how much activity is actually occurring within these blockchain ecosystems. That might be the best way to identify the next hot cryptocurrency ready to skyrocket in value.
