- Bitcoin (BTC-USD) – Greatly influences market trends
- Ethereum (ETH-USD) – Largest Layer 1 network
- Zcash (ZEC-USD) – Privacy coin showing its strength in the face of market volatility
- USD coin (USDC-USD) – Transparent and guaranteed stablecoins offer
- Binance (BNB-USD) – Evergreen exchange game with its own blockchain
The volatility exhibited by the crypto market over the past week has been enough to drive many investors out of the space altogether. See a flagship project, Earth (LUNA USD), collapsing was one thing. Add to that a market-wide slowdown caused by the Fed’s rate hike earlier in the month, and you have a double that could derail any project.
What is important to recognize, however, is that not all cryptocurrencies are built to last. Chances are that of the more than 10,000 cryptocurrencies currently on the market, only a few dozen will exist in a few years. These are the recession proof cryptos to buy and hold.
This list does not mean that these currencies will be permanent winners. There are periodic downturns in the market, and no crypto has been entirely resistant to the downside. However, these are the players who have the best chance of withstanding harsh conditions and outlasting their peers.
Recession-proof cryptos to buy: Bitcoin (BTC-USD)
When it comes to recession-proof cryptos to buy, Bitcoin is probably the safest bet of the bunch. The crypto king is so big, it’s usually the The source of any market volatility. You see, the total market capitalization of the crypto industry is around $2 trillion, more or less. With a market capitalization of over $550 billion, Bitcoin contributes more than a quarter of the total market value.
With its great stature, any significant gain or loss for Bitcoin drives the market up or down. When outside factors – like Fed rate hikes, for example – impact the industry, Bitcoin’s response typically predicts market-wide behavior.
But as the rest of the market pales in size for BTC, other cryptos are seeing much higher highs and lows. When Bitcoin wins, altcoins can soar twice as high in comparison. But when Bitcoin dips, those same altcoins can crash and burn. While calling the project “too big to fail” might be a bit overzealous, it’s probably safe to say that Bitcoin will outlast most other cryptocurrencies thanks to its greater stability.
Recession-resistant cryptos to buy: Ethereum (ETH-USD)
Ethereum is not much further behind Bitcoin’s market capitalization; ETH has a capitalization of $234 billion. As a result, it is also somewhat more stable than lower cap altcoins. However, the Ethereum network has another major strength that equips the network to withstand disasters. It is the main hub for most dapp users in the blockchain world.
Indeed, the Ethereum network hosts over 4,000 dapps on its platform, making it by far the largest layer 1 by size of its offerings. Additionally, he holds a whopping $70 billion in Total Value Locked (TVL) on the channel. The closest layer 1 to that size is Binance, with just $9 billion TVL. Indeed, the chain is worth more than the Gross Domestic Product (GDP) of many developing countries.
Of course, investors know Ethereum’s downfalls at this point, namely its slow transaction times and high gas fees. However, these concerns won’t last long, with the Merge upgrade expected as early as August. With this upgrade in place, transaction times should decrease significantly, as should gas costs.
Recession Resistant Cryptos to Buy: Zcash (ZEC-USD)
Zcash might be one of the more unusual choices on this list. It’s the lowest of the bunch by market capitalization, at just $1.5 billion. However, it is part of an asset class that is proving quite resilient to the recent volatilities the market has been facing.
Privacy coins are becoming a hot crypto niche. This is because they allow users to perform crypto transactions completely anonymously and untraceably. These games have seen particular interest following things like the EU’s anti-money laundering proposals.
Zcash is also a unique network in this niche, as it allows both public and private transactions, allowing people to use what they want, when they need it. Plus, it’s gearing up for its biggest update yet. The May 31 Zcash network upgrade will allow users to make private transactions with the coin on mobile devices, the first for a privacy coin. This will also make Zcash’s private transactions interoperable.
Recession Resistant Cryptos to Buy: USD Coin (USDC-USD)
After last week’s big Stablecoin crash, choosing a Stablecoin as one of the best recession-proof cryptos to buy might seem a bit overwhelming. But USD Coin is different. The crashes we saw last week were largely related to algorithmic stablecoins, which USD Coin is not.
Algorithmic stablecoins, like the recently collapsed TerraUSD (UST-USD), rely on automated mathematical adjustments to keep their prices at parity. However, this technology has proven time and time again that it is not infallible. These algorithms can be easily overridden, allowing for price fluctuations. USDC is a collateralized stablecoin, which means that it maintains its price underlying each token 1:1 with another asset.
Of course, this method is not necessarily fully efficient either; developers can sometimes be ambiguous about the status of their reserves or the fiat that includes them. However, this is not a problem for USD Coin. The network provides monthly reports to users, breaking down reserves and how they change from month to month.
Recession Resistant Cryptos to Buy: Binance (BNB-USD)
Binance remains one of the best recession-proof cryptos to buy because, like Bitcoin and Ethereum, it is so big that it will likely always remain a crucial player in the crypto ecosystem. It has its own Layer 1 network, lined with billions in TVL and thousands of dapps to its name. Throw all that out the window though, and you still have the most compelling component of the Binance ecosystem in its exchange.
The Binance exchange is a global service. In fact, it hosts one of the widest selections of accepted fiat currencies in the world, allowing users to buy crypto with 46 different fiats. It also has one of the largest portfolios of cryptos to trade on the platform, with 394 listings.
Of course, this large pool of tradable cryptos and fiats makes Binance one of the most usable exchanges in the world. As a result, it processes huge volumes of transactions every day. Today alone, Binance processes over $14 billion in transactions. It is a well-established exchange that is a top choice among investors, making it likely to survive periods of volatility.
As of the date of publication, Brenden Rearick had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.