Cryptocurrencies are taking the world by storm. The heavy fluctuations in their prices are a stuff of legends. So which cryptocurrencies are the best? Here, we consider various aspects relating to this question.
Ten best cryptocurrencies to Invest in 2023
Firstly let us first understand what cryptocurrency is. Simply put, it is a digital currency. One of the key features of cryptocurrency (as compared to traditional currency) is that it is not issued by any centralised authority or bank.
In other words, almost anyone can launch a cryptocurrency project. The following are the top ten cryptocurrencies by their market capitalisation:
1. Bitcoin (BTC)
Created in 2009, Bitcoin is the first cryptocurrency in the world. An investment of Satoshi Nakamoto, it is currently valued at a whopping 543.4 billion dollars. Bitcoin has grown so valuable due to its scarcity. Its maximum supply is always limited. Though supply is generated by awarding crypto miners, that reward, too, is halved every four years.
2. Ethereum (ETH)
At $220.4 billion, Ethereum is another excellent cryptocurrency. The platform offers several other blockchain technology-based products like NFTs.
3. Tether (USDT)
What sets Tether apart from other cryptocurrencies is that it is backed by flat currencies and thus is a stablecoin. This makes Tether, with its current market capitalisation of 81.8 billion dollars, far less volatile, at least in theory, than some of the alternatives.
4. Binance Coin (B.N.B.)
Binance coin is the fourth and the last cryptocurrency to have a market capitalisation of over fifty billion dollars. Currently valued at $50.6 billion, its market capitalisation may be less than a tenth of its Bitcoin, but it has still paid a handsome return over the years.
5. U.S. Dollar Coin (USDC)
U.S. Dollar Coin is another example of currency-backed cryptocurrency and is valued at just over thirty billion dollars.
6. X.R.P. (X.R.P.)
X.R.P. is valued at just about twenty-four billion dollars at the moment. The price of a single coin remains low, and it is possible to invest in this cryptocurrency even with small sums.
7. Cardano (A.D.A.)
Cardono is another inexpensive cryptocurrency that has shown low yet consistent growth over the years.
8. Dogecoin (DOGE)
Another low-priced cryptocurrency, DOGO, was famously started as a joke in 2013 and has grown to be one of the best cryptocurrencies. It is also one of the most volatile currencies, as there are no limits to the number of Dogecoins that can be issued.
9. Polygon (MATIC)
Also known by its former name Matic Network, Polygon is one of the best-paying cryptocurrencies with a market capitalisation of nine billion dollars.
10. Solana (S.O.L.)
With a market valuation of nearly 8.7 billion dollars, Solona is the last in our list of top ten cryptocurrencies.
Frequently Asked Questions (F.A.Q.s)
There are several questions about the top ten cryptocurrencies and cryptocurrencies in general. The following are some of the most Frequently Asked Questions (F.A.Q.s) :
Question: How does cryptocurrency work?
Answer: Cryptocurrencies work by using a technology known as blockchain technology. Blockchain technology is a modern technology that helps create secure assets called blocks. Non-Fungible Tokens, or NFTs, are another example of products generated through blockchain technology.
Question: What are the risks associated with cryptocurrencies?
Answer: Like any other investments, cryptocurrencies are risky as they are subject to various financial and market risks. Further, one must take extra care to secure one’s financial credentials and information when investing in cryptocurrency. Further, the legal and regulatory framework around these currencies is still undefined, and almost anyone can enter the market. Thus, one must ensure that the party behind the cryptocurrency is carrying out authentic operations.
Question: What are some of the reasons for buying cryptocurrency?
Answer: Cryptocurrencies are used mostly to circumvent challenges presented by conventional paper money. However, these days, the currency has grown as a sort of investment in and of itself.
Question: What are altcoins?
Answer: Altcoins is a general term used for all cryptocurrencies except Bitcoin.
Question: How can one cryptocurrency?
Answer: All you have to do is to buy them from a platform that allows you to trade on them.
Question: What is market capitalisation for cryptocurrencies?
Answer: Market capitalisation for a cryptocurrency is the total value of all its coins taken together.
Question: What are some of the tips for smart investment in cryptocurrency?
Answer: The following are some of the smart tips for investing in cryptocurrency:
- Only invest what you can afford to lose. Cryptocurrency investment is highly speculative, and no one knows what their real value is yet.
- You should never invest borrowed money in them.
- Set cut loss limits when investing.
- Go for one of the most popular and well-recognised cryptocurrencies like Bitcoin or Dogecoin.
- Understand that, much like gains made on an investment in stocks, any gains made on cryptocurrencies are considered capital gains and are subject to taxation.
- Keep your credentials secure.
If the reader has any other questions, they should feel free to ask them here.
The Bottom Line
One can easily wrap up the above discussion by concluding that there are several cryptocurrencies that make an excellent investment option, but one must exercise the necessary financial discretion while investing in them.