In this article, we discuss the 10 cryptocurrencies Redditors are buying in April.
Finance institutions around the world have been caught unprepared by the incredible rise of non-fungible tokens, decentralized autonomous organizations, and decentralized finance applications in the past few years. According to data collected by tracker CryptoCompare, the top-rated crypto exchanges around the world traded in around $1.5 trillion worth of coins in the month of February. Lower-tier exchanges also saw record trades worth around $62 billion. The tracker used data from around 150 spot exchanges for the analysis.
The numbers are surprising because over the past two years, amid a broad crackdown against blockchain technology in China, over 50 crypto exchanges have been forced to halt operations. CryptoCompare claims that this has led to consolidation in the industry and an “oligopoly of exchanges dominating trading volumes” is emerging and smaller players are being left behind. Other trends shaping the industry include governmental regulation, greener mining efforts, and the adoption of select coins as legal tender.
The mainstreaming of crypto technology has also accelerated as payment giants like Visa Inc. (NYSE:V), Block, Inc. (NYSE:SQ), and PayPal Holdings, Inc. (NASDAQ:PYPL) incorporate it onto their platforms. Investments in digital assets are also increasing. According to a report by CoinShares, inflows into digital asset investment products reached close to $9 billion in 2021, up more than $2 billion compared to the previous year. Amid record inflation, investors have continued to pour money into crypto assets, affirming a long-term bullish view of the technology.
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Our Methodology
These were picked from a careful assessment of the cryptoverse on internet platform Reddit. The details of each cryptocurrency are mentioned alongside a discussion around top companies working in the sector to provide readers with some context for their investment decisions.
A database of around 900 elite hedge funds tracked by Insider Monkey was used to calculate the popularity of these firms among hedge funds.
Cryptocurrencies Redditors are Buying in April
10. Chainlink
Chainlink is a cryptocurrency launched in 2017 that is based on the Ethereum network. It uses a Proof-of-Stake consensus mechanism. The currency solves a major problem associated with blockchain tech as it allows smart contracts on the basis of real-world data that can be accessed through Chainlink. These real-world datasets are being updated in real-time on the blockchain through the use of node operators. The nodes can access data not on the blockchain and then help act as a bridge between the new tech and the traditional economy.
Currencies like ChainLink have become important to the overall functioning of the crypto economy through the efforts of firms like Alphabet Inc. (NASDAQ:GOOG), the California-based technology giant. Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG) with 2.9 million shares worth more than $8.5 billion.
Just like Visa Inc. (NYSE:V), Block, Inc. (NYSE:SQ), and PayPal Holdings, Inc. (NASDAQ:PYPL), Alphabet Inc. (NASDAQ:GOOG) is one of the crypto stocks that elite investors can pick up at bargain prices in the present economic environment.
In its Q4 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“In contrast, we made a different kind of mistake about a decade ago. Google, now Alphabet Inc. (NASDAQ:GOOG), performed very well for us while we owned it. The company kept outperforming our assumptions and we kept lowering them to be conservative. “Trees do not grow to the sky.” The stock kept going up and our value grew but did not keep pace with the stock. It hit our estimate of fair value and we sold it with a nice gain, patting ourselves on the back. We kept following the company and what they actually did over the next several years was roughly double the assumptions we used to value it. Therefore, our value was too conservative, and we sold it too cheaply, missing many years of compounding. Fortunately, we experienced some volatility several years ago that allowed us to purchase Alphabet Inc. (NASDAQ:GOOG) (Google) again with a margin of safety.”
9. Solana
Solana is a cryptocurrency that has gained popularity among Redditors in the past few months because it offers a faster block time than other prominent coins. The block time is the amount of time a cryptocurrency takes to create a new block, indirectly determining the speed of transactions on the network. Solana has a block time of just 400 milliseconds, several times faster than the block time of other “fast” networks like Ethereum, which has a block time of 10 seconds. Slower networks have block times of around 10 minutes, like Bitcoin.
Solana is gaining popularity in the crypto world as established companies like CME Group Inc. (NASDAQ: CME), the Illinois-based derivatives exchange, deem it valid for trading on their platform. At the end of the fourth quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in CME Group Inc. (NASDAQ:CME), compared to 64 the preceding quarter worth $2.6 billion.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and CME Group Inc. (NASDAQ:CME) was one of them. Here is what the fund said:
“CME Group Inc. (NASDAQ:CME), for example, maintains a dominant franchise in electronic commodities and options trading with high incremental margins. Its interest rate trading business had been depressed coming out of the recession, but with a tightening policy environment, it now provides upside optionality that augments robust free cash flow growth and capital return. Willscot Mobile Mini is another compounder that executed well through the pandemic but was not initially recognized for the synergies of its Mobile Mini acquisition. The deal has reduced costs and created greater operating leverage as the company rides the tailwinds of improving industrial production and construction.”
8. Ripple
Ripple is a cryptocurrency created by a company called RippleLabs. Since RippleLabs operates for profit, the currency was created in response to a real-world problem. The Ripple coin is first and foremost geared towards banks and other money providers to make international money transfers quickly and cheaply. Ripple uses a consensus model called a Unique Node List. Hundreds of banks already use Ripple services. This makes it one of the fastest-growing cryptocurrencies in the world.
Ripple has garnered praise from a lot of crypto enthusiasts on social media. One of these enthusiasts is Elon Musk, the chief of Tesla, Inc. (NASDAQ:TSLA), the EV maker from California. At the end of the fourth quarter of 2021, 91 hedge funds in the database of Insider Monkey held stakes worth $12.9 billion in Tesla, Inc. (NASDAQ:TSLA), up from 60 in the previous quarter worth $10.6 billion.
Here is what ClearBridge Investments has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2021 investor letter:
“Within the growth universe we target, emerging growth stocks – the category with the highest revenue growth rates – significantly underperformed the overall growth categories in 2021 after leading performance in 2020. The pull-through effect on digitization, online access across industries, and spending to modernize outdated corporate infrastructures accelerated trends in a highly compressed time frame. Much of that trend slackened in 2021 and shares of these companies, while showing good top-line growth, saw slowing appreciation from the blistering pace in the prior year. With that moderating growth, multiples decelerated from 2020 highs. Bucking the headwinds among our emerging growth names was Tesla, Inc. (NASDAQ:TSLA) which saw continued sales momentum from their leadership positions in the key growth areas of electric vehicles.”
7. Dogecoin
Dogecoin is a cryptocurrency that was started as a joke back in 2013. Even though it is one of the oldest coins on the market, it is also one of the most “meme-worthy” since a real-world usage is lacking. The coin gained prominence on social media and among Redditors in particular in 2021 as rocket emojis, pictures of the Shiba Inu dog, and tweets by celebrities resulted in a massive rally in share price. Even though the hype has mostly died down, the coin remains one of the most popular ones on Reddit.
Dogecoin and other meme coins like it have not contributed much to the crypto education efforts of companies like Mastercard Incorporated (NYSE:MA), the New York-based payments processing firm. Among the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE:MA) with 5.8 million shares worth more than $2.1 billion.
In its Q4 2021 investor letter, Saturna Capital, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:
“Given the likelihood of rising inflation and interest rates ahead, we anticipate adjustments to the portfolio to reduce exposure to highly valued stocks dependent on low interest rates to support terminal year valuations, while seeking investments in companies more correlated with a return to economic normalcy. We sold our position in Mastercard Incorporated (NYSE:MA). Although Mastercard Incorporated (NYSE:MA) does not charge or collect interest, its association with credit activities was problematic.”
6. Tether
Tether is perhaps the most popular stablecoins on the market. Crypto enthusiasts mostly use stablecoins to leverage trades without the use of fiat currencies. Stablecoins are backed by a reserve asset and usually do not experience the price volatility associated with other coins. Tether is backed by the US dollar. Since it is used to leverage trades, Tether is one of the most liquid cryptocurrencies on the market, even more so than the most popular coin, Bitcoin. Tether is also one of the biggest coins by market capitalization.
The adoption of coins like Tether is made easier through the powerful products made and sold by NVIDIA Corporation (NASDAQ: NVDA), the microchip maker from California. At the end of the fourth quarter of 2021, 110 hedge funds in the database of Insider Monkey held stakes worth $10.4 billion in NVIDIA Corporation (NASDAQ:NVDA), up from 83 in the previous quarter worth $10 billion.
In addition to Visa Inc. (NYSE:V), Block, Inc. (NYSE:SQ), and PayPal Holdings, Inc. (NASDAQ:PYPL), NVIDIA Corporation (NASDAQ:NVDA) is one of the stocks that institutional investors are keeping their eye on as markets become more volatile.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“During the fourth quarter, the ClearBridge Global Growth Strategy outperformed its MSCI ACWI benchmark. The Strategy delivered gains across eight of the nine sectors in which it was invested (out of 11 total), with the information technology (IT) and industrials sectors the primary contributors. The communication services sector was the sole detractor. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022. Bucking the headwinds among our emerging growth names was NVIDIA Corporation (NASDAQ:NVDA), which saw continued sales momentum from their leadership positions in the key growth areas of graphics processing units for gaming and data centers.”
5. Algorand
Algorand is a cryptocurrency that was created in 2017. It was created by Silvio Macali, an expert in cryptography and a professor at MIT. In 2020, the Marshall Islands, an independent country near the Equator in the Pacific Ocean, adopted the coin as a national digital currency. The adoption demonstrated how crypto and blockchain tech was a solution to the problems present in the traditional finance system. For example, using Algorand instead of fiat currencies, Marshall Islands could move large sums of money across borders at high speeds and low costs.
Algorand aspires to be a faster and more reliable network with regards to money transfers compared to Ethereum. The founders of the coin are presently working on ways to increase the transactions per second on the network to around 1,000. For comparisons, the Ethereum network can only support 30 transactions per second.
4. Cardano
Cardano is a cryptocurrency launched in 2017 by Charles Hoskinson, one of the co-founders of Ethereum. The Cardano network is the first coin that uses a different version of the Proof-of-Stake consensus mechanism called the Ouroboros consensus protocol. This protocol was formed after scholarly research on every stage of the Proof-of-Stake process. Some of the challenges that it aims to solve include scalability, interoperability, and sustainability. The coin has a market capitalization of more than $39 billion.
Cardano is becoming popular as companies around the world turn to blockchain tech for solutions such as identity management and traceability. The Cardano network aims to be a premier decentralized application development platform with a multi-asset ledger and verifiable smart contracts. Cardano is already working on enterprise-level solutions for traceability.
3. Shiba Inu
Shiba Inu is a “meme” coin popular among Redditors. The coin is actually a token on the Ethereum network. Tokens are coins, and behave exactly like them, but are not the native coin of the blockchain. For example, the Ethereum blockchain uses the Ethereum coin for transactions on the network. Other coins created on the network are known as tokens. Shiba Inu is one of these tokens. The meme coin is named Shiba Inu after the popular dog breed. Images of Shiba Inu have been used with various meme coins, including Dogecoin.
Shiba Inu was launched in 2020 and became popular after Elon Musk took to social media to share a picture of his dog. The dog was of the Shiba Inu breed. Since Musk is popular for hyping up meme coins, the Shiba Inu coin was one of the biggest benefactors of his tweets, with the price of the coin rocketing over 1,000% in a matter of weeks.
2. Terra
Terra is a blockchain network that aims to create mass payment mechanics for the crypto world and also provide a reliable stablecoin for the process. It uses a Proof-of-Stake consensus mechanism. The Terra network hosts a bunch of stablecoins whose prices are tied to physical currencies. However, instead of using the coins as a reserve, the network uses an algorithm to track the prices of different currencies. Like other stablecoins, the coin is one of the most liquid ones on the market.
Terraform Labs, the company that oversees all developments related to Terra, has said that top firms like Arrington Capital, Lightspeed Venture Partners, and Pantera Capital have pledged nearly $150 million to the Terra platform to help develop the system. Terraform Lans was founded in 2018 by Daniel Shin and Kwon. The latter is a former Microsoft employee.
1. Bitcoin Cash
Bitcoin Cash is a cryptocurrency launched in 2017. It is a spinoff of Bitcoin, the biggest crypto coin in terms of market capitalization. Bitcoin Cash aims to solve one of the biggest problems associated with Bitcoin — slow transaction speeds. Since Bitcoin Cash is faster than Bitcoin, wait times on the network are automatically reduced. This leads to lower fees per transaction as well, translating into two big advantages over the parent coin. One of the ways the coin achieves quicker processing is by increasing the size of blocks.
The founders of Bitcoin Cash aim to make the network more competitive with payments giants across the world that usually charge high fees for international transactions. By increasing the size of blocks, the Bitcoin Cash network can perform these transactions quicker than these services. The network aims to process 25,000 transactions per second.
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Disclose. None. 10 Cryptocurrencies Redditors are Buying in April is originally published on Insider Monkey.
