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Bybit Learn
Intermediate
6 de sep de 2022

Best Layer 1 Crypto Projects To Invest In During the Bear Market

If you're searching for the best crypto to invest in during the bear market, you’ll first want to understand how to differentiate crypto projects from one another. Many of the best cryptos to invest in are Layer 1 cryptos, which include platforms like Bitcoin and Ethereum. The issue with these platforms is that they weren't designed with scalability in mind. 

In recent years, developers have created Layer 2 protocols that use Layer 1 networks for consensus and security. With Layer 2 protocols in place, Layer 1 scalability issues have become less of an issue. We’ll take a closer look at some of the best Layer 1 cryptos to invest in during the bear market.

What Are Layer 1 Cryptos?

The term “Layer 1” refers to the initial layer of a crypto ecosystem or platform. For instance, Ethereum is currently considered a Layer 1 blockchain, with Layer 2 projects that have been placed above it for added functionality.

Layer 2 projects, which can be placed on top of Layer 1 blockchains, include everything from NFTs to decentralized finance (DeFi). In most cases, Layer 1 is the base layer and primary security provider for the entire network. During a bear market, when many cryptocurrencies and projects are declining in value, it's highly recommended that you get back to the fundamentals by placing your investments into Layer 1 projects that have been popular for years.

Layer 1 vs. Layer 2 Crypto Projects

A smart contract platform typically consists of three components, which include security, decentralization and scalability. However, having all three of these components is very difficult (hence, the blockchain trilemma). Many smart contract platforms have two of these components firmly in place but are relatively weak when it comes to the third.

Platforms like Bitcoin and Ethereum are considered to be decentralized and highly secure but aren't necessarily scalable. In comparison, a platform like Binance Smart Chain has issues with decentralization but is considered to be scalable and secure. Ethereum — due to its popularity for creating DApps — has experienced such difficulties with scaling that they’ve needed to charge higher fees to cover the expenses. In return, many users have chosen to invest in other platforms. (Note: The Merge, Ethereum’s long-awaited upgrade, is ongoing at the time of this article’s writing.)

As the first system that's built in a blockchain, Layer 1 is able to perform standard functions, such as performing transactions. While the following Layer 1 list includes more than a dozen of the best smart contract platforms, Bitcoin is still the most common Layer 1 cryptocurrency. Layer 2 cryptos are protocols that are built directly on top of the Layer 1 structure for the purpose of resolving cost and speed issues. Two examples of Layer 2 blockchains include on Bitcoin are the Bitcoin Lightning Network and Liquid Network. On the Ethereum side, examples of Layer 2 blockchains would include Arbitrum and Polygon.

What Are the Best Layer 1 Crypto Projects?

If you want to know which crypto to buy now, the following list of Layer 1 cryptocurrencies takes a comprehensive look at 18 of the best Layer 1 cryptos to invest in. Every coin in this list has proven to be popular among crypto investors.

Bitcoin (BTC)

Bitcoin is currently the most popular and widely used currency. It's considered to be among the best cryptos to invest in because of its high value and lengthy history, as well as its original status as the most notable form of digital cash. 

Currently, Bitcoin has the highest amount of liquidity among all cryptocurrencies, which means that no one has difficulty selling or purchasing Bitcoin. Even though Bitcoin experiences volatility as part of a volatile asset class, it's among the most stable options available to investors, which places it among the best Layer 1 cryptos. Note that although Bitcoin operates on a proof of work (PoW) consensus, it’s considered to be the best crypto to invest in because of its sizable market share.

Ethereum (ETH)

Ethereum is considered to be the very first smart contract platform, and it has the largest market capitalization among all such Layer 1 networks. As such, it's considered one of the best Layer 1 crypto projects to date.

One reason is the Ethereum virtual machine (EVM), a decentralized computer that developers interact with while creating smart contracts. (Other Layer 1 networks in this list, such as Avalanche and Binance Smart Chain, are EVM compatible as well.)

Because of this compatibility, many other cryptocurrencies are based on the code that Ethereum uses, which allows developers to implement their projects on numerous blockchains. Even though Bitcoin is the most widely used currency on this Layer 1 list, Ethereum has a strong ecosystem and is considered to be the most decentralized Layer 1 currency, which makes ETH one of the best cryptos to invest in.

Solana (SOL)

As the most hype-filled project of 2021, Solana certainly has the potential to become one of the best Layer 1 crypto projects of all time because of its unique consensus mechanism. Transactions are timestamped when placed in a completely new block within the chain. Along with supporting smart contracts and a range of DApps, Solana is considered to be a high-performance blockchain. Its goal is to maximize efficiency, which makes Solana as one of the best smart contract platforms.

It can process a maximum of 65,000 TPS which is considered one of the fastest in DeFi. This was one of the leading factors along with the Ethereum killer narrative that pumped its native token SOL by 17055% in 2021. Since then it has retraced to local lows which makes it attractive and affordable to investors that were interested in Solana before.

Avalanche (AVAX)

Avalanche is another EVM-compatible blockchain that aims to solve the scalability issues that have plagued Ethereum. This platform uses the C-chain as a proprietary network chain, similar to the EVM. By using the C-chain, developers are able to create smart contracts built with Ethereum in mind, which makes Avalanche among the most versatile cryptos in this Layer 1 list.

The C-chain comprises two additional blockchains: The Platform Chain and the Exchange Chain. When these chains work on specialized tasks, it's possible for the network to become more efficient and scalable, which is why Avalanche is one of the best Layer 1 cryptos. Additionally, the network has expanded to include subnetworks which work similarly to sharding Ethereum 2.0. Avalanche is well on the way to its goal of becoming a worldwide asset exchange.

Cosmos (ATOM)

Cosmos is another Ethereum-compatible platform. It offers a native token known as ATOM. This platform is application-agnostic, which means that it's fully interoperable with the Ethereum mainnet and similar EVM-compatible ecosystems. The platform's interoperability makes it among the best cryptos to invest in. Cosmos focuses on providing features that aren't available on Ethereum.

Since developers can launch Ethereum applications on the Cosmos platform without needing to rewrite code, it’s proven to be popular among developers and investors alike. Additionally, the network will be deploying interchain security which will drive more use cases for ATOM. Cosmos aspires to be at the forefront of decentralized finance, which makes this currency unique among the other cryptos in this Layer 1 list.

Polkadot (DOT)

Polkadot, an open-source blockchain, enables separate blockchains to become fully interconnected via the creation of parachains. Every chain that's created on the Polkadot platform is made with a modular framework, which is ideal for developers. Polkadot focuses on transparent governance, upgradeability and scalability, the latter of which is absent from many cryptos in this Layer 1 list.

Polkadot's native token is known as DOT, which is used to incentivize uses in the Polkadot ecosystem. One notable advantage of using this platform is that developers use a shared security system, which means that they don't need to take steps to bring in validators or miners for security. Polkadot is among the best Layer 1 cryptos because of its large market cap which positions it as a top-ten coin.

Cronos (CRO)

Cronos, an ERC-20 token that's positioned on the Ethereum blockchain, is the primary coin associated with the Crypto.com exchange. The purpose of this coin is to accelerate and fuel the mass adoption of cryptocurrencies, which makes it among the best Layer 1 cryptos. CRO comes with a high APY interest rate for staking via their exchange.

Members also get relatively high discounts on exchange fees. If you decide to opt into a syndicate event, you can purchase numerous cryptocurrencies at a 50% discount. Keep in mind that holding a specific amount of the CRO currency gives you access to additional features and perks, which mainly include high-interest rates when staking the coin. Some investors find CRO as one of the best cryptos to invest in because of its reward system.

Cardano (ADA)

Cardano aims to be a competitor to Ethereum, with a focus on scalability as well as ease of use. The platform's scalability is centered around two distinct layers of technology, which include technologies for transferring value and tracking ledger balances.

Its native token, ADA, soared in market cap to become one of the best Layer 1 cryptos after their Alonzo Hardfork Upgrade which introduced smart contract capabilities for developers to build DApps and NFTs. The network is set to undergo another upgrade on September 22. The Vasil Hardfork Upgrade enhances its speed and scalability which brings Cardano one step closer as an Ethereum contender.

At the moment, Cardano has an existing supply of around 33.8 million. If you're wondering which crypto to buy now, ADA is a great investment because it can be used as a hedge against Ethereum.

Binance Smart Chain (BNB)

Binance Smart Chain (BSC) is another EVM-compatible platform. It offers low fees of around $0.15 per transaction and discounted fees on its native exchange. Even though the BSC network comprises some centralization, its native token BNB facilitates quick and affordable transactions on a secure network.

As BSC is highly scalable, it makes BNB among the best Layer 1 cryptos. Some investors believe that BSC offers better performance than Ethereum, even though it relies on the Ethereum developer community. Along with affordable transactions, BSC has quick adoption rates, while also accommodating bridging, which facilitates easy token migration.

Near Protocol (NEAR)

NEAR Protocol is an open-source blockchain that supports the creation of DApps. NEAR is secure, highly capable and intuitive.

This crypto platform uses sharding technology to allow for infinite scalability. Smart contracts are fully compatible, and gas fees are considerably lower when compared to those on Ethereum. NEAR also works as a storage layer which developers can pay to maintain their DApps on the blockchain.

It also has a Layer 2 scaling solution that is compatible with Ethereum called Aurora. It relies on the speed and scalability of the NEAR blockchain with the reach of Ethereum. This lets developers build DApps compatible with Ethereum at a cheaper cost without changing the code base. It also makes it easier to scale without worrying about expensive gas fees and other drawbacks that come with Ethereum.

This makes NEAR attractive to investors as the protocol implements new features such as its stablecoin USN that provides additional use cases to NEAR.

Fantom (FTM)

Fantom is hyped up to be one of the best Layer 1 crypto projects thanks to its goal of becoming the "nervous system" for any smart cities developed in the future. With prolific developer Andre Cronje ponce at the project's helm, many investors were excited for Fantom's advanced distributed ledger technology that could power an array of smart services.

Specifically, Fantom uses a Directed Acyclic Graph (DAG) technology to provide additional scalability while also facilitating instant crypto transactions. The inclusion of a high-performance virtual machine means that smart contracts are easy to create and deploy. The Fantom Foundation has plans to release their Fantom Virtual Machine (FVM) next year, which will have Solidity compatibility and parallel processing.

Currently, you can use the FTM token for governance, staking and paying fees. FTM has a market cap of more than $675 million and has been relatively inexpensive since its decline at the start of this year.

Algorand (ALGO)

Algorand is a popular blockchain that was founded in 2017 but only launched its ALGO token later in 2019. Algorand is based on a PoS mechanism and is considered to be more secure than some other PoS platforms, which makes it the best among Layer 1 cryptos.

Validators on the Algorand platform are selected at random, which makes it almost impossible to predict who will be the best-performing validator. The primary benefits of investing in ALGO and using the Algorand platform include complete decentralization, less time needed for verification, low gas fees, an experienced team and a low potential for hard forks.

Harmony (ONE)

Harmony One is a decentralized platform with a focus on bridging decentralization and scalability. While Harmony was among the best Layer 1 crypto platforms in 2021 due to the soaring popularity of GameFi DApp, DeFi Kingdom. Their native token ONE cannot be mined, but rather staked to earn rewards. To do so, you’ll need to have the Harmony One extension installed into your web browser, which lets you perform transactions.

Harmony One has improved some of the weaknesses that exist in blockchain technology and has already cultivated a lengthy list of partnerships across many industries. Harmony One has a market cap of more than $250 million.

Elrond eGold (EGLD)

Elrond eGold is a highly popular smart contract platform that aims to deliver extensive scalability options through the use of sharding technology. The native token of this crypto platform is EGLD, which was initially launched on the Binance DEX. It's believed that Elrond eGold is around 1,000 times more scalable than Ethereum.

If you're wondering which crypto to buy now, EGLD is a great option because of its fast transaction speeds, superior network security and strong DApp ecosystem. EGLD has a market cap of nearly $1.4 billion, with a single coin worth approximately $60 and a circulating supply of more than 22 million EGLD.

Hedera (HBAR)

Hedera is a carbon-negative network that acts as a distributed ledger for transaction fees and payments of all types. This includes in-app payments, micropayments and even network protection. It uses a technology called the directed acyclic graph (DAG). This technology allows the network to achieve lightning-fast transaction speeds of up to 10,000 transactions per second (TPS) with low fees of only $0.0001 per transaction.

Hedera is also 885,000 times more energy efficient than Bitcoin. Users burn just 0.001 kilowatt-hours of energy per transaction, compared to transactions in Bitcoin that consume 885 kWh of energy. Due to this carbon-negative nature, many energy-conscious individuals have speculated for Hedera to be one of the best Layer 1 crypto projects in the near future once it gets mainstream adoption.

Monero (XMR)

Monero is a popular privacy coin that provides users with complete control over their transactions. The XMR token is also considered to be completely fungible. If you decide to invest with the Monero platform, you'll discover that it's possible for transactions to be linked and that addresses cannot be tracked.

This platform doesn't come with a block limit and is considered to be dynamically scalable. In the event that the Monero supply ever runs out, a continuous supply of 0.3 XMR will be available to further incentivize miners. Users are able to make transactions visible to other users, which means that Monero can be audited by officials for any sign of foul play.

Ripple (XRP)

Ripple is a unique crypto project that's outfitted with a new payment protocol meant to streamline international payments. Its XRP token acts as a cryptocurrency, as well as powering this digital payment network that accommodates financial transactions.

The two primary reasons to use Ripple as your Layer 1 crypto project of choice include affordability and a high market cap of $35 billion. As a payment processor and currency exchange, Ripple uses XRP to facilitate transactions and competes with traditional payment validation and remittance systems like Swift, ACH, and Payoneer. This makes XRP an investment with huge potential should they succeed in taking market share from the traditional payment companies.

Aptos (APT)

Aptos is a brand new blockchain that's pegged to be one of the best as it was created to compete against other best Layer 1 crypto projects like Solana. The cryptocurrency promises users increased scalability, security, usability and reliability over other Layer 1s.

While Aptos is still in the early stages of planning, experts are already beginning to talk about the Aptos blockchain as it has raised millions of dollars from investors. The blockchain is based on the Diem blockchain initiative (from Meta) that was abandoned.

The network plans to launch its native token APT in Q4 2022, which makes the launch of Aptos highly anticipated. This is a project that you might want to keep an eye out for. If the launch is successful, we could see APT explode just like what happened to SOL previously.

Where to Buy the Best Layer 1 Crypto Projects

Now that you have a good idea of some of the best Layer 1 cryptos on the market, you'll need to know where to purchase them. If you're interested in buying BTC, you can do so on platforms like Bybit, which is a popular cryptocurrency exchange that currently boasts more than six million members. Purchasing cryptocurrencies like BTC on Bybit is simple and straightforward.

Bybit has a sleek and intuitive interface that's designed to streamline the process of buying Bitcoin and other currencies detailed in this Layer 1 list. There are several methods you can use to buy Bitcoin on Bybit, which include credit or debit cards, or trading other cryptos for Bitcoin.

Step-by-Step Guide

The steps for buying Bitcoin or other cryptos on this Layer 1 list depends on the device that you're using. Depending on the device that you’re using, you can purchase your cryptocurrency via the Bybit mobile app or web page. Follow the steps below to use the Bybit App:

  • After downloading the app, make sure to register with Bybit and verify your account

  • Log in directly to your account

  • Select the Buy Crypto before clicking on Express

  • Input the amount of Bitcoin you'd like to purchase

  • Once you select a service provider, you can start your payment process

  • Fill in all necessary order information, as well as your credit/debit card details

Once you've obtained your Bitcoin, you can choose to hold it, trade it, or stake Bitcoin through the Bybit platform. The Bitcoin that you hold will be stored in your Bybit account and can be accessed at any time through the Bybit web page or mobile app.

If you want to trade Bitcoin, Bybit accommodates many trading pairs via our derivatives and spot markets. You can also stake your Bitcoin in order to increase your investment portfolio’s digital assets. Finally, Bybit Savings allows you to earn a fully guaranteed APY. You can also choose to stake or unstake your Bitcoin holdings whenever you want.

Final Words

Now that you've gained some understanding of the best available smart contract platforms and Layer 1 cryptos, you now have a better idea of which crypto projects are fundamentally strong and deserve your investment. Each of the 18 projects detailed in this Layer 1 list has proven to be popular among crypto investors and stand out for specific reasons. With this educational piece on the best Layer 1 crypto projects, we hope you're better able to make investment decisions after doing your own research.

Keen on getting started? Take advantage of our zero trading fees and begin your crypto investment journey with Bybit today.