Which cryptocurrencies to favor?

Bitcoin reached Saturday, July 30, 24,658 dollars (about 24,034 euros), its highest level since June 13. Its 27% gain in July made it the best month since October 2021. Another cryptocurrency, Ethereum meanwhile recorded a 70% jump last month, its best since January 2021.

Bitcoin had fallen below $20,000 in late June and July on worries about rate hikes and inflation, as well as internal cryptocurrency issues like the implosion of the Terra/Luna ecosystem and the hedge fund Three Arrows Capital.

However, bitcoin’s record high of $69,000 in November 2021 is still a long way off. This fragility is not an isolated phenomenon: all digital currencies have recorded the same course in recent months. “Cryptocurrencies have been correlated for six months with American technology stocks, which are also in sharp decline”, explains Vincent Boy, market analyst at IG.

A capitalization of 400 billion dollars

The Nasdaq index has indeed lost 20% since the start of the year in a context of rising interest rates in the United States, inflation and fears of recession. “The current level is a good entry point into bitcoin for long-term investors,” says Warren Aoummeur, account manager specializing in crypto-asset investments at Coinhouse.

With a capitalization of 400 billion dollars, bitcoin alone weighs as much as the following twenty main cryptocurrencies. “Bitcoin has the potential to become a global monetary standard. This is, for us, the one and only interesting investment in the universe of cryptoassets”, says Jonathan Herscovici, the founder of StackinSat, which offers a programmed bitcoin investment plan.

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Bitcoin is also the least volatile of the “cryptos”, because it is based on a solid and widely adopted technology on a global scale. “It will be the first to rebound because, unlike some other assets, it has a real economic function. It is both the best asset to start with and the benchmark for those diversifying across multiple cryptos,” notes Vincent Boy.

Stablecoins to wait

Other essential assets in this universe, “stablecoins” (literally “stable coins”) are indexed to the price of the dollar or the euro. Concretely, this means that a tether, a USD coin or a binance USD is permanently worth between 0.9995 and 1.0005 dollars (around 0.94 euros).

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