So you want to invest in cryptocurrency. Maybe you’ve even dabbled in buying some Bitcoin, or the recent Dogecoin spike piqued your interest.
The first thing to know about crypto is that you have thousands of options: 4,833, to be specific, according to CoinMarketCap. Most of them aren’t worth your time but if you’re savvy, you might be able to find an up-and-comer to help shoot you to the moon.
The Best Cryptocurrency To Invest In
Remember not to invest more than you can afford to lose lest your rocket run out of fuel. That’s especially true for investing in risky cryptocurrency. But if you’re interested in trying something new, here are the 10 best cryptocurrencies to invest in according to market capitalization.
These days it’s not uncommon to find ATMs while you’re out wandering about for BTC, the most quintessential of crypto. Indeed, it was the first crypto launched. There are only 21 million BTC that can be created, and so far, only 18 million or so have been found.
This scarcity is what helps drive the market for BTC, along with the fact that it’s so well-known. Even your grandmother has probably heard of Bitcoin, although explaining how it works to her might be a different story.
It’s also been attracting a lot of attention from big-name investors, such as the Winklevoss twins (from whom Mark Zuckerberg stole the idea for Facebook) who tried creating a BTC ETF but were ultimately rejected.
Bitcoin is based on the idea of limited supply, but with Ethereum, it’s the opposite. You can buy, sell, and trade ETH through a crypto brokerage, like Coinbase, but it’s also used to power certain decentralized applications like apps (called dapps). It’s also a more secure way to make a payment since it can’t steal your data, and payment isn’t released until both parties are satisfied with the transaction.
As an investment, Ethereum has seen rapid growth since the end of 2020. It also went through a massive spike in value in 2018 only to crash afterward, so while the growth may be tempting, invest at your own risk.
Binance Coin (BNB)
Binance is an entire platform on its own, which uses Binance Coin (BNB) as a currency. You can buy, sell, and trade BNB itself, but you can also use it as a payment method for the Binance Ecosystem.
Like many other cryptos, BNB’s value has skyrocketed over the past few months. Interestingly, Binance maintains a scarcity for its currency by actually “burning” it once a quarter.
Crypto is known for some wild swings in value. If that scares you but you’re still interested in diversifying with blockchain technology, consider using Tether as the best cryptocurrency to invest in.
It’s actually backed by bank reserves and pegged to currencies like the US Dollar or the Euro. In fact, its value over time has been more or less a flat line. It’s basically another way to invest in government-issued currency, but in a digital way that allows you to avoid fees charged by financial institutions.
XRP was launched as a way to speed up transactions and reduce costs for international payments. It only takes three to five seconds for transactions to complete, and it can even handle two different currencies without the need for conversion first.
XRP has also seen some very large swings in value, going from 24 cents in early December 2019 all the way up to $3.15 a few weeks later before falling back down to its prior level. It’s on a run again, and it’ll be interesting to see how long this one lasts.
Older cryotos like BTC use a lot of energy to produce. Cardano Ada (named after Ada Lovelace) is one of the first cryptos to address that problem wholesale, aiming to be the most environmentally-friendly crypto you can buy.
It’s based on the Ethereum model where it’s used in smart contracts, but you can also buy, sell, and trade it just like normal.
Bitcoin may have been the first cryptocurrency, but Dogecoin’s claim to fame is being an “internet currency.” It was created specifically as a secure and cheap payment method for online creators, such as bloggers, podcasters, and Twitch streamers. You can even send and earn Dogecoin as tips for helping out on the Dogecoin Reddit community or for volunteering computer space for protein folding projects.
Dogecoin’s been in the news a lot lately for its meteoric rise, but it’s still not viewed as investment-quality material by most people quite yet. It’s a crypto based on a meme, after all. But that doesn’t have to stop you from playing around with it a bit — but as always, don’t invest more than you can afford to lose.
Cryptocurrencies use blockchains, but what if you could create your own blockchain and control everything? That’s the premise behind Polkadot. It’s an open source system that allows for cross-chain transfers. It was created by the nonprofit Web3 Foundation as a way to decentralize things, making it harder for individuals and corporations to control things.
Uniswap is another crypto that’s designed to decentralize financial systems. It’s a token that uses the Ethereum exchange network, and it made waves in September 2020 when Uniswap mysteriously dropped 400 UNI tokens into people’s wallets, worth $800 ($12,000 in today’s value). If you believe in supporting decentralized cryptocurrencies, this could be a good option for you.
Litecoin is one of the older cryptocurrencies launched in 2011. It offers many of the same features as the other, newer cryptocurrencies on this list (fast transactions, cheaper to use, etc.), so it’s become somewhat obsolete.
Its founder — Charles Lee — even completely divested from his Litecoin himself, which doesn’t bode well for confidence in this crypto. Still, it’s enjoying a bit of a resurgence.
You can grow your wealth by making smart investing decisions about how much to buy of which crypto, and when. But by holding your investment in a wallet, you can help grow your investment even further, and that’s ultimately the point of investing in cryptocurrency.