Key points
- Bitcoin was the original cryptocurrency that launched about 15 years ago.
- Bitcoin and ethereum dominate the crypto market, but thousands of other cryptos exist.
- Most cryptos have small market capitalizations and are risky, volatile investments.
The cryptocurrency market is known for its extreme volatility and unpredictability. Despite a history of upswings and downswings, top cryptocurrencies have performed well for patient, long-term investors.
Thousands of cryptocurrencies exist. But the crypto world is still dominated by bitcoin and ethereum. Their market capitalizations comprise about 71% of the $2.11 trillion global crypto market.
Here’s a list of the 10 largest cryptocurrencies by market cap, excluding stablecoins.
1. Bitcoin (BTC)
Price: $57,103.01
Market cap: $1.1 trillion
Year-over-year return: 88%
Launched in 2009, bitcoin remains the most popular and valuable cryptocurrency. It was developed by an individual or a group under the pseudonym Satoshi Nakamoto. Its decentralized, blockchain-based system to verify transactions has transformed how people view digital security and currency.
But critics have raised several concerns about bitcoin. Its energy-intensive proof-of-work consensus mechanism may need help scaling the network. Several large-scale crypto projects also now have higher transaction speeds than bitcoin. Meanwhile, other projects have created blockchains with special designs to improve bitcoin’s functionality.
2. Ethereum (ETH)
Price: $3,049.53
Market cap: $366.6 billion
Year-over-year return: 63%
Ethereum is the most valuable altcoin. In crypto lingo, that means it’s an alternative to bitcoin. The leading altcoin’s blockchain was the first to integrate smart contracts, or code designed to run decentralized applications.
The ethereum network has more than 4,400 dApps. In late 2023, the popular crypto transitioned from a proof-of-work consensus mechanism to a less energy-intensive, proof-of-stake model. So ethereum is a greener crypto than bitcoin. Its blockchain functionality also stands out as a critical differentiator.
3. BNB (BNB)
Price: $514.69
Market cap: $76.0 billion
Year-over-year return: 119%
BNB is the native token of Binance, one of the most popular cryptocurrency exchanges. The crypto was initially created on the ethereum network but now resides on Binance’s blockchain. It’s used for a range of transactions and applications. The token even gives users discounted fees on the Binance platform.
Like other crypto exchanges, Binance has been caught in the global regulatory crypto crackdown in recent years. In 2023, the U.S. Securities and Exchange Commission sued Binance, accusing it of violating securities laws.
4. Solana (SOL)
Price: $140.38
Market cap: $65.1 billion
Year-over-year return: 548%
Designed to compete with the ethereum network, solana launched in March 2020. The crypto’s blockchain supports dApps, smart contracts and nonfungible tokens. SOL has a unique hybrid proof-of-stake and proof-of-history verification system. This hybrid system is a selling point because it makes solana cheaper and faster than ethereum.
Unfortunately, reliability has been solana’s downfall. The network has suffered several major outages since the beginning of 2022. At one point in February 2023, it was down for nearly 19 hours. Solana must improve stability and regain user trust to be an “ethereum killer.”
5. XRP (XRP)
Price: $0.44
Market cap: $24.5 billion
Year-over-year return: -6%
Created by Ripple Labs, this global payments network is designed to be an alternative to the Society for Worldwide Interbank Financial Telecommunications. SWIFT is the global system banks and other financial institutions use to transfer money.
Ripple Labs claims its technology is faster, cheaper and more transparent than SWIFT. XRP is the native cryptocurrency designed for the Ripple network and XRP Ledger blockchain. In 2023, a judge ruled that the crypto is “not necessarily a security” in certain circumstances. But the SEC seeks to levy a nearly $2 billion penalty against Ripple for allegedly selling XRP to institutional investors.
6. Toncoin (TON)
Price: $7.21
Market cap: $18.1 billion
Year-over-year return: 427%
In 2018, the developers of the encrypted messaging company Telegram developed the “layer 1” blockchain. The network behind TON is known for its smart contract capability and speed advantage over ethereum.
The blockchain speed for TON is a quick five seconds. But for the cryptocurrency to be competitive among crypto projects, it must attract more developers. Toncoin has generated impressive bullish momentum following recent reports that Telegram is considering an initial public offering.
7. Dogecoin (DOGE)
Price: $0.11
Market cap: $15.8 billion
Year-over-year return: 66%
Created in 2013, DOGE was launched as a parody of bitcoin. But dogecoin investors are dead serious about its prospects today. DOGE has become one of the most popular meme coins with several high-profile supporters.
Tesla CEO and dogecoin investor Elon Musk is the cryptocurrency’s most visible supporter. The controversial Musk referenced the crypto several times, triggering extreme price volatility. Consequently, a group of dogecoin investors has sued Musk, alleging he manipulated prices deliberately. Billionaire entrepreneur Mark Cuban is also a DOGE supporter.
8. Cardano (ADA)
Price: $0.38
Market cap: $13.5 billion
Year-over-year return: 31%
Cardano is a decentralized proof-of-stake blockchain that launched in September 2017. When it launched, it was designed to be more efficient than bitcoin, ethereum and other proof-of-work blockchains. Cardano immediately had credibility among crypto enthusiasts because ethereum co-founder Charles Hoskinson founded it.
Like ethereum, cardano focuses on functionality. It also aims to be the platform of choice for dApp development and verifiable smart contracts. ADA is the primary cryptocurrency used on the network to facilitate transactions and run dApps. Cardano users can also use ADA for staking to help verify network transactions and earn additional tokens.
9. TRON (TRX)
Price: $0.13
Market cap: $10.9 billion
Year-over-year return: 58%
Tron is a cryptocurrency platform that aims to decentralize the internet using blockchain technology and dApps. Launched in August 2017, the network has over 228 million accounts as of May 2024. The tron network uses a delegated proof-of-stake verification system. Its native cryptocurrency is TRX.
TRX was originally an ethereum-based token but transitioned to its own blockchain in 2018. Tron specializes in decentralized entertainment, such as gaming and gambling applications. The network allows content creators to sell their work directly to consumers. In March 2023, the SEC charged tron founder Justin Sun with fraud and other securities law violations.
10. Avalanche (AVAX)
Price: $26.94
Market cap: $10.6 billion
Year-over-year return: 91%
Avalanche is a 2020-launched ethereum network competitor. Its goal is to create the fastest, most secure network that supports smart contracts, dApps and autonomous blockchains.
AVAX is the native token of the avalanche network. Avalanche users can vote on platform governance and pay transaction fees using the token. Coin creation is limited to 720 million tokens. Avalanche users can vote to alter the rate that AVAX is created. This gives them control over the crypto’s inflation rate. AVAX also has a unique consensus mechanism for verifying transactions. The process involves a sufficient majority of validators approving a transaction.
*Market caps and pricing are sourced from CoinMarketCap.com, current as of 8:07 a.m. ET on July 8, 2024.
What is cryptocurrency?
Cryptocurrency is digital money that can be held as an investment or used to purchase goods or services.
Banks or other financial institutions aren’t needed to verify or complete transactions. Cryptocurrency transactions are verified via a consensus mechanism and recorded on a blockchain. These are permanent ledgers that track and record trades and assets.
Cryptocurrencies are essentially self-contained, digital payment platforms. They are typically not issued or controlled by central governments or other authorities. Instead, they’re controlled by a transparent software protocol that leverages the power of peer-to-peer networks of computers. The primary goal of cryptocurrencies is to give individuals complete control over their assets.
What is crypto trading?
Crypto trading involves buying and selling cryptocurrencies to generate profits. Crypto traders use different strategies based on risk tolerance, time commitment and financial goals:
- Long-term traders choose high-quality cryptocurrencies to buy and hold for years or decades. They ignore the day-to-day or month-to-month fluctuations in the crypto market. Instead, these traders focus on the gradual growth of crypto use and investment over time.
- Crypto swing traders seek to capitalize on trends in the market by buying and selling within days or weeks.
- Crypto day traders buy and sell within the same trading day.
- Crypto scalp traders buy and sell several times throughout the day. They look to make a net profit from many small gains.
Pros and cons of crypto trading
The volatility of the cryptocurrency market creates opportunities for traders to make big profits relatively quickly. But volatility makes crypto trading extremely risky and challenging, even for experienced traders.
Brian Evans is CEO and founder of BDE Ventures, a private investment company that backs crypto projects. He said inexperienced traders should tread carefully in the crypto market.
“Because crypto is open to all, it’s easier for newcomers to trading to both take a shot at it but also blow up in terms of losing all their capital,” Evans said. “With this in mind, it’s best to learn as much as possible about trading and all the related nuances before diving headlong into it.”
Here are several pros and cons of crypto trading:
Pros
- Crypto has a track record of extremely strong performance over long periods.
- Many cryptos have a capped supply.
- If global cryptocurrency usage continues to rise, crypto demand should support prices.
Cons
- Extreme volatility makes the crypto market one of the most challenging markets to trade.
- Crypto has faced regulatory crackdowns.
- Unlike stocks and bonds, for example, cryptocurrencies are not backed by revenue-generating companies or other assets.
How to buy cryptocurrency
Cryptocurrencies trade on exchanges, similar to stocks. But not all exchanges and brokerages support cryptocurrencies, especially altcoins.
To buy cryptocurrency, first identify a broker or exchange that offers crypto trading. Leading crypto brokers include SoFi and Robinhood. Popular cryptocurrency exchanges include Binance and Coinbase.
Steps to opening a cryptocurrency exchange account
Once you choose a crypto broker or exchange, you must create and verify a trading account. The process may vary depending on the platform. But it typically includes the following steps:
- Create an account. You may need to choose the appropriate account type and submit personal information.
- Verify your identity. This process may involve submitting a copy of a bank statement, photo ID or other documents.
- Read and agree to a user agreement. User agreements typically spell out the terms of service associated with your account. These include any penalties or fees you may need to understand.
- Link a payment method. Choose a bank account or other account type to link to your crypto trading account. This will allow you to transfer money in and out of the account.
- Fund your account. Consider how much money you want to start with in your crypto trading account. Then, initiate a transfer from your linked account.
Frequently asked questions (FAQs)
What are the top cryptocurrencies by market cap?
The top cryptocurrencies by market cap are bitcoin and ethereum. Together, they make up about 71% of the global cryptocurrency market cap. Beyond ethereum, the most valuable altcoins include BNB, solana and XRP.
Are cryptocurrencies a good investment?
Bitcoin, ethereum and other top cryptocurrencies have been extremely volatile. But they have also performed very well for investors who have bought and held through the many ups and downs of the crypto market. However, the oldest cryptocurrency, bitcoin, has only been around since 2009. So it’s unclear how well cryptocurrencies will perform as investments over a long time horizon.
Will crypto boom in the future?
Most top cryptos have performed exceptionally well up to this point. In the long term, their success will be tied to how popular they become as an alternative asset class.
It’s possible that cryptocurrencies will replace fiat currencies (in more instances) and the use cases for blockchains will grow. There could be an unprecedented boom in cryptocurrency prices in the future.
source: https://www.usatoday.com/