Cryptocurrencies have become an appealing opportunity for investors with medium to high risk tolerance. They are largely speculative, but emerging markets and new use cases are helping to realize their full utility.
The crypto market is no stranger to intense volatility, making it a risky investment that can work for or against your portfolio. However, you can minimize risk by sticking to the top cryptocurrencies that have earned their place.
Market cap: US$1.25 billion
Bitcoin is the original cryptocurrency that launched the entire asset class. The anonymous creator, Satoshi Nakamoto, made the software open source, allowing others to create new cryptocurrencies without reinventing the wheel.
Market cap: US$369.7 billion
Ethereum was announced in 2013 and became publicly available in 2014. Ethereum introduced the new concept of “smart contracts,” which allow programs to be deployed on the blockchain and executed when certain conditions are met. This innovation catalyzed a series of other new cryptocurrencies and use cases.
Market cap: US$110.9 billion
Tether, or USDT, is the most prominent stablecoin on the market. A stablecoin is pegged to a specific asset to maintain its value. Tether is pegged to the US dollar and maintains a consistent value of US$1, although it can vary by a few cents as markets fluctuate.
Market cap: US$86.79 billion
BNB is a cryptocurrency developed and maintained by Binance, one of the most popular cryptocurrency exchanges in the world. The BNB coin is used throughout the Binance ecosystem, including the exchange itself and other Binance projects, which gives the coin a strong use case and user base.
Market cap: US$68.5 billion
Solana (SOL) uses proof-of-stake and proof-of-history mechanisms to provide smart contract functionality, transaction settlement and token issuance. As with Ethereum, the plan is to grow an ecosystem of cryptocurrency-powered products and services.
Market cap: US$33.51 billion
USD Coin, or USDC, is the second most popular stablecoin, and it operates similarly to USDT. The coin is supported by major players in the crypto industry who continually advocate for transparency and compliance.
Market cap: US$29.4 billion
Market cap: US$22.63 billion
Dogecoin is interesting in that it is functionally the same as Bitcoin, with the only difference being the removal of a maximum supply. The coin was originally launched as a memecoin, i.e. a joke, leveraging the then-popular meme of a Shiba Inu with grammatically incorrect captions. It was designed to be a low-value, high-supply coin for community uses.
Market cap: US$20.57 billion
Toncoin (TON) was originally created as part of Telegram’s blockchain project known as Telegram Open Network. The goal of TON is to build out a fast, scalable blockchain that allows for smart contracts and decentralized applications. It is used for network operations, transactions, games or collectibles built on the platform.
Market cap: US$16.29 billion
Cardano, or ADA, prioritizes scientifically backed development. Rather than rushing new features and intense marketing campaigns, developers conduct peer-reviewed research before implementing new features.
Some believe Cardano is a long-term winner, while others criticize its slow development process. Ultimately, Cardano is the only top coin with a well-documented and strict development process that gives confidence in its long-term success.
Cryptocurrencies are still relatively new, meaning the risks around investing are heightened. However, looking at the top 10 coins by market cap minimizes risks as these cryptocurrencies have already proved themselves and have a solid user base and existing use cases. Even so, investors should keep in mind that cryptocurrencies overall require caution.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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