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Cryptocurrency Market Trends: 5 Top Digital Currencies

By May 27, 2018featured

Top Digital Currencies

The world of top digital currencies is right in the middle of an epic explosion. The cryptocurrency market has climbed more than 1,000 percent in 2017 alone, with hundreds of new currencies having joined the fray over the past couple of years. Roughly $7 billion in digital tokens change hands everyday with mainstream players such as the New York Stock Exchange, Nasdaq, Goldman Sachs and Capital One investing in the underlying technology. Meanwhile, Wall Street is beginning to recognize that Bitcoin as  a real investment, and is creating mechanisms that will allow for broader market participation.

Cryptocurrency Market Cap worth $199.2B  as at Nov 3, 2017 up from $17.7B on January 1, 2017

Cryptocurrency Market Trends: 5 Top Digital CurrenciesSource: CoinMarketCap

Cryptocurrency market trends

Crytpocurrency refers to all digital currencies that employ the principle of cryptography to ensure privacy, security, and anonymity.

A key feature of these currencies is that they are decentralized since they are neither coined nor regulated by a single authority, unlike fiat currencies regulated by banks. If you are looking to invest in cryptoland and don’t mind the stomach-churning volatility, you are certainly spoilt for choice–there are currently a total of 1,249 cryptocurrencies circulating in 6,360 markets around the world, as per CoinMarketCap.

A good chunk  have turned into multibaggers with crazy returns–Ripple at one point climbed more than 4,000 percent over a 3-month span in the current year.

The cryptocurrency market is now worth nearly $200B which, though huge, is still a tiny fraction of the estimated $36.8 trillion of the world’s easily accessible money or $7.7 trillion value of the total above-ground gold stocks. Further, cryptocurrencies still suffer from severe liquidity problems–only 7 Bitcoin transactions can be processed per second compared to ~2,000 by Visa/MasterCard. It will probably take a few more years before cryptos are ready to replace money as a mainstream means of exchange or steal the coveted ”safe haven” status away from gold.

Although there’s a plethora of alt-coins available today, only a handful are real outliers while the rest are mainly copycats with few distinguishing features. Bitcoin is, of course, the grandaddy of them all, thanks to its trailblazing status as the world’s first decentralized cryptocurrency. Other major blockchain networks include Ethereum, Bitcoin Cash, Ripple and Litecoin in that order.

Here’s a rundown of the top 5 cryptocurrencies that you should keep on your radar:

  1. Bitcoin (BTC)

At a current price of $7,264 per coin and a market cap of $121.1B (61% of total market), Bitcoin is the overwhelming leader in the crypto space. Bitcoin has continued to roll ahead with a full head of steam, taking out new all-time highs every couple of days or weeks. Demand remains robust as evidenced by the fact that the leading cryptocurrency has climbed 790% in the year-to-date. Some exchanges such as Zimbabwe’s Golix are even selling Bitcoins at nearly 90% premium to global averages.

The latest leg of the rally is mainly being fired up by positive vibes coming from Wall Street, including the announcement by CME Group of the launch of Bitcoin  futures.

Cryptocurrency Market Trends: 5 Top Digital CurrenciesSource: CoinMarketCap

Bitcoin remains highly volatile even as it continues to undergo a series of hard forks. The cryptocurrency has already seen two hard forks in 2017–one in July that created Bitcoin Cash and another in October that spawned Bitcoin Gold. A third hard fork is looming in November.

The sudden increase in Bitcoin forks can be chalked up to the need to make the currency available to a wider pool of users. Transactions by Bitcoin users are aggregated into blocks that are converted into complex mathematical puzzles. Miners use high-powered computers to work out these puzzles after which successful miners are rewarded in Bitcoin. The need for expensive high-end machinery for Bitcoin mining has meant that mining has remained in the control of a small group of people.

The idea of Bitcoin Gold was to decentralize Bitcoin further by allowing a bigger pool of people with less powerful machines to participate in mining activity. A new Bitcoin code created a fork from the old Bitcoin blockchain and gave rise to Bitcoin Gold in October 24.

Whether these hard forks will achieve their intended purpose is open to question. Both Bitcoin cash and Bitcoin Gold have nosedived from their initial post-fork surges by a significant amount. Bitcoin Gold currently trades 75% below its October all-time high.

Cryptocurrency Market Trends: 5 Top Digital CurrenciesSource: CoinMarketCap

The selloff could be due to traders dumping the new currency, a clear signal of lack of faith. Meanwhile, many major exchanges have not started trading in Bitcoin Gold. Some observers view this trend negatively  since these forks could saturate the market with Bitcoin clones and discredit the notion of a limited number of Bitcoins. Others though are a bit more sanguine and see it as a necessary step in the continuity of the blockchain.

The good news for investors,however, is that so far three forks do not seem to have affected the advance of Bitcoin itself. There’s still a lot bullishness surrounding Bitcoin–nearly half of more than 23,000 persons interviewed by CNBC in October believe the currency will eventually cross the $10,000 mark.

  1. Ethereum (ETH)

With a market cap of $28.6B (14.4% of total market) Ethereum is the second most popular of the cryptocurrency family. Although it has retreated from its June all-time high of $392, Ethereum is still up an impressive 3,750 percent in the year-to-date.

Ethereum sports some unique features that make it different from Bitcoin. First off, it’s not merely a digital currency, but rather a platform that runs on smart contracts where applications are run  exactly as programmed without any censorship, fraud, downtime or any third-party interference. These smart contracts are powered by Ethereum’s blockchain-based crytpocurrency, ether. The smart contracts are compatible with any online wallet that uses a standard coin API.

One great feature that has made Ethereum so popular is that it gives developers a means to raise funds for their application development.  A developer can set up a contract and seek pledges from the community, meaning they can bypass Kickstarter’s 10% fee. Additionally, Ethereum features its own Turing code that allows anything to be computed given enough time and computing resources. This is a capability that Bitcoin lacks. Further, Ethereum operates on the GHOST protocol that allows much faster block times of 12 seconds vs. 10 minutes by Bitcoin.  Ethereum might also be easier to mine since only about half of all ether coins have been mined compared to nearly 80% for Bitcoin. Overall, Ethereum has more potential applications and might be available to a larger pool of users than Bitcoin.

  1. Bitcoin Cash (BCH)

Bitcoin Cash is the pre-eminent Bitcoin clone having been created from the first hard fork in August. With an $11B market cap and price of $659.27, Bitcoin Cash is the third-largest cryptocurrency by capitalization.

Cryptocurrency Market Trends: 5 Top Digital CurrenciesSource: CoinMarketCap

Unlike Bitcoin Gold, Bitcoin Cash has remained relatively stable and more than doubled since its inception. BCH has been on a tear lately, climbing 85% over the past seven days and now claims the second highest cryptocurrency trade volume after Bitcoin. There a couple of drivers behind the rally. One is the impending Segwit2x (segregated witness) fork on 13th November. Many people believe that BCH will act as a safeguard in case Segwit2x turns messy. Another is that popular online merchant, Wikileaks Shop, recently announced that it will accept BCH for its merchandise.

One of the key features of BCH that makes it stand out from Bitcoin is that it features large block sizes of 8mb compared to 1mb for Bitcoin, which helps increase the speed of the verification process for transactions. Some people believe that Bitcoin Cash will one day overtake Bitcoin in terms of popularity. Whether this will turn into reality remains to be seen.

  1. Ripple (XRP)

Ripple is a unique cryptocurrency given that it holds the distinction as the world’s only enterprise blockchain solution that facilitates global payments, connects banks, payment providers and digital asset exchanges. Although a single Ripple unit is worth only $0.21, the cryptocurrency boasts a market capitalization of $8.1B and the price has rallied more than 3,200 percent in 2017.

Cryptocurrency Market Trends: 5 Top Digital Currencies

Source: CoinMarketCap

Much of that rally has come on the back of more institutions warming up to the currency. Indeed, Ripple now has more than 100 sign-ups to the Ripple Net blockchain network. Many are big-name institutions including UniCredit, Santander, UBS and Standard Chartered among others. Ripple hopes that it will one day be able to disrupt the dominance of banks and corporations in the financial world. Unlike the other three cryptocurrencies, Ripple cannot be mined, though it can be bought at various exchanges. Less than 40% of the total Ripple coin supply is currently in circulation.

  1. Litecoin (LTC)

Litecoin is an open-source peer-to-peer cryptocurrency that facilitates near-zero cost payments to any part of the globe. A single Litecoin is currently worth $55.10 compared to just $4.33 at the turn of the year. A market cap of $2.96B makes it the fifth largest digital currency in cryptoland. At 84 million, Litecoin has a supply of coins 4x bigger than  Bitcoin’s, of which 53,660,000 have currently been mined.

Litecoin creator, Charlie Lee, sees the relationship between Litecoin and Bitcoin being akin to that by silver and gold in that Litecoin is more as a cryptocurrency meant to be used in everyday purchases whereas Bitcoin is more of a store of value. This could help explain the huge Litecoin rally as cryptocurrencies continue to gain acceptance. Further, the relatively low price of Litecoin makes it a solid choice for investors looking to gain entry into the crypto space.

Investing in Cryptocurrencies

Despite the underlying risks, the future of cryptocurrencies appears to be quite bright. The continued success of Bitcoin and other leading digital currencies has helped to legitimize them and increase public interest and participation by both retail and institutional investors.

There are several ways that you can invest in cryptocurrencies including:

  • Buying at the various exchanges
  • Investing in blockchain startups
  • Participating in crowdfunding platforms
  • Engaging in ICOs (initial coin offerings) of new blockchain projects.

Some of the top blockchain stocks and companies to invest in include:

  • BTCS
  • Global Arena Holdings
  • DigitalX
  • BTL Group
  • Coinsilium Group
  • First Bitcoin Capital

 

Join the discussion One Comment

  • Diane David says:

    Are any of these tickers even available via STT? ETH is Ethan Allen Interiors Inc. Not finding this article terribly useful; perhaps some time in the future. But thank you.

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