Bitcoin is the only crypto worth keeping an eye on. Is this true or not?
As the first cryptocurrency, Bitcoin set the stage for the entry of other cryptocurrencies, inspiring an ever-growing number of spinoffs, continually growing in popularity as potential investment opportunities and an alternative means of exchange.
There are more than 9,500 cryptocurrencies available today, but it is important to remember (as mentioned in our previous article) that these are currently highly volatile. There is no guarantee that any cryptocurrency, no matter how popular or how big, will not just disappear overnight.
As a beginner, it makes sense to consider a cryptocurrency you understand, and Bitcoin is an obvious choice for first-time crypto investors. However, it is worth investigating other altcoin options to add to your portfolio if you decide to embark on this route. These are simply alternative cryptocurrencies to Bitcoin, which may be cheaper, but also have potential. Each of these has its own distinct personality and operates according to its own rules.
As of May 4, 2021, the top cryptocurrencies by market cap are Bitcoin, Ethereum, Binance Coin, Dogecoin and Ripple. We will explore these below, but it is worth noting here that Bitcoin and Ether are unlikely in the short term to lose the top two positions. However, due to the volatility of crypto, the rest of the top ten remain relatively fluid.
Beyond that, the field of cryptocurrencies is constantly expanding, and the next great digital token may be released at any time.
The first Bitcoin alternative is Ethereum, known as the cryptocurrency of the ‘world computer’.
In the simplest of terms, Ethereum is an open-source software platform based on blockchain technology and used for its own cryptocurrency, ether. It enables developers to create smart contracts and decentralised applications (ĐApps) that can run securely without a third party.
Binance Coin is a utility cryptocurrency and the main rival of Ethereum, it is also known as the Ethereum killer.
Binance Coin (#BNB):
Binance Coin is the Binance exchange platform cryptocurrency. In brief, Binance is considered to be one of the most innovative cryptocurrency exchanges offering one of the most competitive rates. It is a popular and well-trusted crypto exchange, which has resulted in the BNB attracting much interest.
Dodgecoin is an open-source meme cryptocurrency that is promoted as the “fun and friendly internet currency”. As per the official website, “Dogecoin is a decentralized, peer-to-peer digital currency that enables you to easily send money online”. It has a loyal community of supporters who trade it and use it as a tipping currency for social media content. Dodgecoin was originally formed as a joke and features the face of the Shiba Inu dog from the “Doge” meme as its logo and namesake.
Ripple is a blockchain-based digital payment network with its own cryptocurrency, XRP. Easily compared to Bitcoin in which it comes out tops with regards to transaction speed and costs.
In conclusion, if you are considering investing in cryptocurrencies, there is no fixed reason to invest in just one cryptocurrency, diversity is the key and it is worth keeping an eye on all those crypto-balls.
As with any investment, the best cryptocurrencies to invest in will fit your own financial needs and speculations for the future. Careful consideration is essential in deciding on how much of your portfolio to devote to cryptocurrency and to determine that allocation is in line with your risk profile. We at WellsFaber are here as always to guide you through this process or to assist in any way.