Best Cryptocurrencies To Invest In Right Now

With the crypto market's volatile nature, it's challenging to pinpoint the best investments. Diversification is key, and popular picks include Bitcoin, Ethereum, and promising altcoins.

Bitcoin continues to be the most popular crypto, with its market cap representing over 45% of the total crypto market. It's followed by Ethereum, which enables decentralised apps and smart contracts.

Other altcoins to consider include:

- Solana: A high-performance blockchain for smart contracts with low transaction fees.

- Binance Coin: A utility token for discounted fees on the Binance exchange, the world's most widely-used exchange.

- Tether: A stablecoin pegged to the US dollar to reduce volatility.

- Cardano: A blockchain with a rigorous research-based approach, aiming to be the world's financial operating system.

- Dogecoin: A memecoin that gained popularity in 2021 and is accepted by some major companies.

- Polygon: A layer-2 solution for Ethereum with its own blockchain and multi-chain capabilities.

- XRP: A payment system by Ripple with a unique consensus mechanism.

- Uniswap: A decentralised exchange introducing the AMM model, removing the need for order books.

- Toncoin: A blockchain with smart contracts functionality, continuing the development of the Telegram Open Network.

Bitcoin and Ethereum

Bitcoin was the first cryptocurrency and is a decentralised digital currency. It is a blockchain-based currency that is powered by a network of users and allows financial transactions without relying on a central authority or intermediary. Bitcoin is secured by cryptography, with transactions verified by a process known as mining. Bitcoin transactions are permanently recorded on a public ledger that cannot be changed or manipulated. Bitcoin has a finite supply capped at 21 million.

Ethereum is both a cryptocurrency and a blockchain platform. Its native cryptocurrency is called Ether. The Ethereum network includes decentralised apps for gaming, gambling, socialising, and decentralised finance. Most non-fungible tokens (NFTs) are also based on the Ethereum network. The Ethereum network is decentralised and operates on thousands of computers worldwide. Ethereum's primary purpose is to serve as a platform to run smart contracts and other decentralised apps. Ether does not have a hard supply cap, but its supply is managed through a process known as burning.

Both Bitcoin and Ethereum have experienced tremendous growth. In May 2016, one bitcoin was worth about $500. As of September 10, 2024, a single bitcoin was valued at around $56,902, representing a growth of 11,280%. Ethereum has also seen significant growth. From April 2016 to the end of September 2024, its price went from about $11 to around $2,343, increasing by 21,196%.

When investing in cryptocurrencies, it is important to remember that the market can be highly volatile. It is crucial to conduct thorough research and consider your risk tolerance and financial situation before making any investment decisions.

Altcoins

There are tens of thousands of altcoins on the market, and they can be categorised based on what they were designed for. Here are some examples of altcoins and their key features:

• Solana (SOL): One of the fastest blockchains, which also supports decentralised finance and apps, as well as smart contracts.
• Ripple (XRP): A currency that can be used to facilitate exchanges of different currency types, including fiat currencies and other major cryptocurrencies.
• Dogecoin (DOGE): The original meme coin, which started as a joke in 2013 but has since become a prominent cryptocurrency.
• Toncoin (TON): Originally developed for Telegram's encrypted messaging platform, it is now a community-driven blockchain with extremely fast processing and validation times.
• Cardano (ADA): An early adopter of the proof-of-stake consensus mechanism, which speeds up transaction times and removes the energy-intensive problem-solving dimension.
• Shiba Inu (SHIB): An Ethereum-based meme coin, which was developed in 2020 and has gained the support of crypto heavyweights such as Elon Musk and Vitalek Buterin.
• Avalanche (AVAX): A layer-one blockchain for dApps and other networks, which is attempting to solve the blockchain trilemma of security, scalability and decentralisation.
• Polkadot (DOT): An altcoin that powers the Polkadot ecosystem, where developers can build specific-purpose blockchains.

If you're looking to invest in altcoins, it's important to do your own research and understand the risks involved. Cryptocurrency markets are highly volatile, and it can be challenging to determine the use cases for different altcoins. It may be helpful to consult a financial advisor who is familiar with cryptocurrencies before making any investment decisions.

Stablecoins

There are several types of stablecoins, including:

• Fiat-backed stablecoins: These are pegged to a fiat currency, like the US dollar, and maintain their value through reserves of that currency. Examples include Tether (USDT), USD Coin (USDC), and TrueUSD (TUSD).
• Crypto-backed stablecoins: These are backed by other cryptocurrencies and rely on smart contracts to maintain their peg. An example is Dai (DAI), which is pegged to the US dollar but backed by Ethereum and other cryptocurrencies.
• Algorithmic stablecoins: These maintain their value and stability through algorithms that control the supply of the coin. They may or may not hold reserve assets.

DeFi

Decentralized finance, or DeFi, is a type of cryptocurrency that aims to cut out traditional banks and brokers. DeFi allows for peer-to-peer financial services, including crypto trading, loans, interest accounts, and other services. It is reliant on public blockchains like Ethereum and cryptocurrencies.

Through DeFi lending, users can lend out cryptocurrency and earn interest as a lender. Borrowing and lending are among the most common use cases for DeFi applications, but there are many more complex options available, such as becoming a liquidity provider to a decentralized exchange.

Interest rates on DeFi loans are typically more attractive than traditional banks, and the barrier to entry is low. In most cases, the only requirement to take out a DeFi loan is the ability to provide collateral with other crypto assets.

However, it is important to note that investing in DeFi is highly risky. The high yields offered by DeFi are due to the high level of risk involved. There are three major types of risk to consider when investing in DeFi:

• Smart contracts: These are essential for DeFi applications to run, but if there is an issue with a developer's code, there could be weaknesses within the protocol.
• Volatility: As cryptocurrencies are volatile, the crypto assets used as collateral may sharply decline in value, and some may see their positions liquidated.
• Lack of regulation and insurance: Unlike traditional banks, there is no regulation or insurance on your money when you use DeFi.

Despite the risks, some investors are still keen on DeFi due to its potential for high returns and the opportunity to cut out traditional financial intermediaries.

If you are considering investing in DeFi, it is important to do your own research and only invest what you can afford to lose. When choosing a DeFi application, it is crucial to vet the security and audit its underlying network. Look for networks that are not controlled by a small group of players, can handle heavy user demand, and have affordable transaction fees.

Some popular DeFi coins and protocols include:

• Aave
• MakerDAO
• Uniswap
• Curve Finance
• Synthetix
• Yearn Finance
• Flexa

NFTs

Non-fungible tokens (NFTs) are unique digital assets that can be bought and sold online, often with cryptocurrency. NFTs can take many forms, including art, music, in-game items, and videos. Each NFT has a digital signature that makes it impossible to exchange or consider equal to another NFT, hence the term "non-fungible".

The value of an NFT is based on what someone else is willing to pay for it, and demand will drive the price. NFTs can be a risky investment because their future is uncertain, and there is not a lot of historical data to judge their performance. However, the market for NFTs was worth $41 billion in 2021, and some NFTs have sold for millions of dollars.

Some popular NFT marketplaces include:

• OpenSea.io: A peer-to-peer platform that features "rare digital items and collectibles".
• Rarible: A democratic, open marketplace that allows creators to issue and sell NFTs.
• Foundation: Artists must receive "upvotes" or an invitation from fellow creators to post their art on this platform.

It is important to carefully research NFT investments, as buyer protections appear to be sparse. Some artists have also fallen victim to impersonators who have sold their work without permission.

Frequently asked questions