Best Cryptocurrencies To Invest: Top 10 Picks

With the crypto market's extreme volatility, investing in cryptocurrencies is not for the faint of heart. Bitcoin and Ethereum are in a league of their own as the two best cryptocurrencies to buy. However, there are thousands of other coins to choose from, each with its own dynamics. Here are ten of the best cryptocurrencies to invest in, ordered by market capitalisation:

1. Bitcoin (BTC)

2. Ethereum (ETH)

3. Binance Coin (BNB)

4. Tether (USDT)

5. XRP (XRP)

6. Solana (SOL)

7. USD Coin (USDC)

8. Dogecoin (DOGE)

9. Toncoin (TON)

10. Cardano (ADA)

Bitcoin: the original cryptocurrency, with the highest market cap and value

Bitcoin is the original cryptocurrency, having been created in 2008 and released as open-source software in 2009. It was invented by an unknown person or group operating under the pseudonym Satoshi Nakamoto. Bitcoin is decentralized, meaning it operates without a central authority or single administrator, and transactions are verified and recorded using blockchain technology.

Bitcoin has the highest market cap and value of any cryptocurrency. As of September 10, 2024, a single bitcoin was worth around $56,902, and its market cap was $1.1 trillion. This is a growth of 11,280% since May 2016, when one bitcoin was worth about $500.

Bitcoin's blockchain-based, decentralized transaction verification and public ledger system revolutionized digital security. However, critics have raised concerns about the energy-intensive process of verifying transactions, which is called 'mining'. This process requires significant computational power and specialized hardware, and it has been estimated that Bitcoin mining consumes around 0.4% of global electricity consumption.

Despite the criticisms, Bitcoin remains the most popular and dominant cryptocurrency. It represents more than 45% of the total cryptocurrency market, and its market cap and value are yet to be matched by any other cryptocurrency.

Ethereum: a blockchain for smart contracts, with the second-highest market cap

Ethereum is a decentralised, open-source blockchain system that features its own cryptocurrency, Ether. It is a platform for numerous other cryptocurrencies and for the execution of decentralised smart contracts. Smart contracts are pieces of code that run decentralised applications, or dApps, and are resistant to censorship, downtime, and fraud.

Ethereum was created in 2015 by Vitalik Buterin, a Russian-Canadian programmer. It is the second-largest cryptocurrency token in terms of market capitalisation, which can be attributed to its innovation and many use cases.

Ethereum's blockchain was designed as "one computer for the entire planet", able to make any program more robust, censorship-resistant, and less prone to fraud by running it on a globally distributed network of public nodes.

Ethereum allows users to build and deploy software commonly in the form of dApps, which are then powered by a global distributed network of computers running Ethereum. The network is decentralised, making it highly resistant to any form of censorship or downtime.

Ethereum is also an open-source blockchain platform that runs on the usage of its native currency, Ether (ETH). All network transaction fees, or gas fees, are paid in ETH.

The Ethereum network can be used by anyone to create and run smart contracts, which are software programs that run autonomously without user intervention. Ethereum's growth can be attributed in part to its smart contract capability, which has enabled a growing ecosystem of dApps, non-fungible tokens (NFTs), and more.

Ethereum 2.0

The Ethereum 2.0 upgrades aim to boost the platform's scalability and add a number of new features. The transition to a proof-of-stake algorithm is intended to lower data storage costs and enable anyone to become a validator.

The Ethereum blockchain previously operated on the proof-of-work consensus mechanism, but in September 2022, it transitioned to the proof-of-stake model, known as "The Merge". This upgrade fundamentally altered Ethereum's operation, eliminating the need for mining new blocks as the network is now safeguarded using staked ETH and validators.

The final stage of Ethereum 2.0 is sharding, where the database on the Ethereum blockchain is split into 64 shard chains. This will improve scalability and ideally reduce the gas fees on the Ethereum network.

Tether: a stablecoin with a value pegged to the US dollar

Tether is a stablecoin, a type of cryptocurrency that aims to reduce the volatility associated with other coins. It does this by pegging its value to the US dollar, with the developers claiming to hold one dollar for every Tether in circulation. This means that Tether's value is intended to remain stable at one dollar, though it can fluctuate slightly.

Tether is one of the first and most popular stablecoins, and it has a market cap of $83.8 billion as of July 22, 2023. Its price stability makes it attractive to investors who are wary of the extreme volatility of other cryptocurrencies. It also allows for faster and more timely transfers from other cryptocurrencies back to US dollars.

Tether's blockchain-based platform makes it easier to use fiat currency digitally. It enables individuals to utilise blockchain technology and related innovations while transacting with traditional currencies, thus minimising the complexity and volatility often associated with digital currencies.

While Tether has faced criticism and legal issues, it remains one of the largest cryptocurrencies by market capitalisation. Its stability and wide acceptance make it a popular choice for those seeking a more consistent store of value in the volatile world of crypto.

Binance Coin: a utility token for discounted fees on the Binance exchange

Binance Coin (BNB) is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. BNB was created as a utility token for discounted trading fees in 2017, but its uses have expanded to numerous applications, including payments for transaction fees, travel bookings, entertainment, online services, and financial services.

Binance Coin's blockchain is also the platform on which Binance’s decentralized exchange operates. The Binance Exchange was founded by Changpeng Zhao and is one of the most widely used exchanges in the world based on trading volumes.

Binance Coin was initially an ERC-20 token that operated on the Ethereum blockchain. It eventually launched a mainnet and uses a proof-of-stake consensus model. On July 22, 2023, Binance Coin had a market capitalization of $37.3 billion, with one BNB valued at around $242.55.

Every quarter, Binance uses one-fifth of its profits to repurchase and permanently destroy (or "burn") BNB held in its treasury. This process helps to reduce the supply of BNB, which can potentially increase its value over time.

In addition to its use on the Binance exchange, BNB has been added and applied in various use cases, both within and beyond the Binance ecosystem. Some examples include:

• BNB Chain: A new blockchain platform launched by the Binance community for creating and transferring tokens.
• Binance DEX: The decentralized exchange built on top of BNB Chain, which accepts BNB payments for various fees.
• Binance Launchpad: The token sale platform of Binance, which accepts BNB to participate in token sales.
• Binance Lending: Offers various lending products where users can grow their BNB holdings.
• Merchant payments: People can pay for goods and services in BNB via TravelbyBit or Pundi X merchant POS systems.
• Travel bookings: People can use BNB to pay for hotels and flight bookings on platforms such as TravelbyBit and Trip.io.
• Buying virtual gifts: BNB can be used to pay for virtual gifts on websites such as Gifto.
• Hiring freelancers: Platforms like CanWork (with the CanYa coin) allow users to hire freelancers and pay the fees in BNB.
• Earning in-game rewards: Get rewarded or pay in BNB for games on VIBEHub.
• Buying property: BNB can be used to pay for real estate assets on property listing websites such as Propy.
• Storing BNB: BNB can be stored and used through built-in wallets on some of the latest smartphones from Samsung and HTC.

BNB is a fully operational asset that can function as a currency and a medium of exchange. It is decentralized, and its direction is not controlled by the Binance team. As of May 2024, BNB was the fourth-largest cryptocurrency by market capitalization, behind only Bitcoin, Ethereum, and USD Tether.

Solana: a cheaper, faster alternative to Ethereum

Solana (SOL) is a fast and cost-effective blockchain that rivals Ethereum as a platform for decentralised applications (dApps), smart contracts, and non-fungible tokens (NFTs). Its unique hybrid proof-of-stake and proof-of-history verification system makes transactions faster and cheaper than Ethereum.

Performance

Solana has been one of the most successful crypto tokens of the resurgent crypto bull market, increasing by 637.71% in value in the last 12 months. It is now the fifth-largest crypto by market cap. On 10 September 2024, SOL's price was $135.28, with a market cap of $60.5 billion.

Advantages

Solana can process up to 65,000 transactions per second, with transaction costs amounting to fractions of a cent. Its proof-of-history validation method allows for faster processing of transactions. It also has growing support for DeFi, NFTs, and Web3 applications.

Disadvantages

Solana has a history of multiple downtime incidents, including several major and partial outages since early 2022, undermining its credibility. It is also less mature than Ethereum's ecosystem. Its rapid growth may also lead to undiscovered vulnerabilities.

Frequently asked questions