The Crypto Coin Investment Guide: Best Picks

With thousands of cryptocurrencies in existence, it can be challenging to determine which is the best to invest in.

Bitcoin, the original cryptocurrency, remains the most popular and valuable, with the highest market capitalization. Its decentralized, blockchain-based system to verify transactions has transformed how people view digital security and currency.

Ethereum, the most valuable crypto besides bitcoin, was one of the first altcoins and introduced smart contracts to the blockchain.

Other cryptocurrencies that have performed well include Binance, Solana, Toncoin, Dogecoin, Cardano, Tron, and Avalanche.

When choosing which crypto to buy, it is important to consider your individual goals, investing timeline, and risk profile. It is also crucial to do your due diligence and ensure that any crypto project you are interested in is legitimate and secure.

Bitcoin

Each bitcoin is made up of 100 million satoshis, the smallest unit of bitcoin. This means that anyone can purchase a fraction of a bitcoin. Bitcoin's price is highly volatile, but it has become the top-performing asset of any class over the past decade, climbing by 9,000,000% between 2010 and 2020.

Ethereum

Experts predict that Ether's price could reach as high as $15,000 in 2030, with potential highs of $4,500 in 2022, $5,000 in 2023 and $10,000 in 2025.

Stablecoins

• Fiat-Collateralized Stablecoins: These maintain a reserve of a fiat currency (or currencies), such as the US dollar, as collateral, assuring the stablecoin's value. Tether (USDT) and TrueUSD (TUSD) are popular examples, backed by US dollar reserves and denominated at parity to the dollar.
• Commodity-Backed Stablecoins: These are pegged to the market value of commodities such as gold, silver, or oil. Tether Gold (XAUt) is a cryptocurrency backed by gold reserves, thought to be held by a custodian in Switzerland.
• Crypto-Collateralized Stablecoins: These are backed by other cryptocurrencies. Because the reserve cryptocurrency may be prone to high volatility, such stablecoins are generally over-collateralized. For example, MakerDAO's Dai (DAI) stablecoin is pegged to the US dollar but is backed by Ethereum (ETH) and other cryptocurrencies worth about 155% of the DAI stablecoin in circulation.
• Algorithmic Stablecoins: These may or may not hold reserve assets. They use an algorithm to control supply and keep the stablecoin's value stable.

Altcoins

The term "altcoin" is a combination of the two words "alternative" and "coin." Altcoins are designed to improve upon the perceived limitations of the cryptocurrency and blockchain they are forked from or competing with.

There are tens of thousands of altcoins on the market, and they can be categorised into several types based on what they were designed for:

• Payment tokens: Designed to be used as currency to exchange value between parties. Bitcoin is an example of a payment token.
• Stablecoins: Aim to reduce volatility by pegging value to another asset, such as fiat currencies or precious metals. Examples include Tether's USDT and MakerDAO's DAI.
• Security tokens: Represent fundraising efforts or ownership and are regulated by the Securities and Exchange Commission.
• Utility tokens: Used to provide services within a network, such as purchasing services, paying network fees, or redeeming rewards. Filecoin is an example of a utility token.
• Meme coins: Inspired by a joke or a silly take on other well-known cryptocurrencies. Dogecoin is an example of a meme coin.
• Governance tokens: Allow holders certain rights within a blockchain, such as voting for changes to protocols.

When choosing an altcoin to invest in, it is important to consider your individual goals, investment timeline, and risk profile. It is also crucial to assess the liquidity, technology, sector leadership, tokenomics, and other key factors of the cryptocurrency.

• Ethereum (ETH): The second-largest cryptocurrency by market capitalisation. It is a decentralised software platform that enables smart contracts and decentralised applications.
• Tether (USDT): One of the first and most popular stablecoins, which aims to reduce volatility by pegging its market value to a currency or other external reference point.
• Binance Coin (BNB): A utility cryptocurrency that can be used to pay fees and receive discounts on the Binance Exchange. It is also the native asset of the BNB Chain blockchain.
• Solana (SOL): A smart contracts platform with a unique architecture that allows it to process thousands of transactions per second while keeping costs low.
• Toncoin: A blockchain project continuing the development of a platform initially designed by the team behind the Telegram messenger. It aims to provide a scalable and decentralised solution with smart contracts functionality.
• Cardano (ADA): A decentralised blockchain platform that aims to create a more secure and scalable infrastructure for smart contracts and decentralised applications. It utilises a proof-of-stake consensus mechanism called Ouroboros.
• XRP: The native token for the XRP Ledger, created as a payment system by Ripple in 2012. It facilitates fast and low-cost transactions.

DeFi

Decentralized finance, or DeFi, is a growing movement in the crypto industry that has democratized financial services beyond the regulations of central authorities or institutions. DeFi uses blockchain-powered technology to provide financial services like savings, loans, trading, and insurance to anyone with an internet-enabled smartphone.

Maker (MKR)

Maker is the governance token of MakerDao, a blockchain-based protocol that launched a major automated cryptocurrency lending platform in 2017. MKR is one of the earliest DeFi projects and operates DAI, a community-managed decentralised cryptocurrency with a stable value pegged to the US dollar. In April 2021, Maker's price surged by 727% year-to-date, and it has been predicted to continue growing.

Compound (COMP)

Compound is a lending and borrowing decentralised blockchain that enables users to earn interest on their cryptocurrencies by depositing them into one of the different Compound pools. COMP is Compound's native token, and it grants holders voting rights. Since its launch in 2020, the platform has gained popularity and passed $9 billion in total value locked. COMP has been predicted to reach $2,617.52 in a five-year period.

Uniswap (UNI)

Uniswap is a decentralised cryptocurrency exchange that facilitates automated trading of decentralised tokens. It gained traction in 2020 by solving the liquidity problem faced by other decentralised exchanges. Uniswap is Ethereum's most famous DeFi protocol, and it capitalises almost 50% of the DeFi market. UNI is Uniswap's native governance token, and it has been predicted to climb to $380.13 in five years.

Solana (SOL)

Solana is a blockchain platform that provides a safe and user-friendly experience for Web3 users. It has a thriving decentralised finance scene, with over $4.4 billion locked in DeFi projects. Solana has solid technological foundations and a thriving ecosystem, making it a cryptocurrency worth considering.

Chainlink (LINK)

Chainlink is a top altcoin candidate due to its growing presence in the blockchain world. It has a Cross-Chain Interoperability Protocol that increases revenue potential and expands its reach, and it has a serverless platform that allows developers to integrate real-world data into their smart contracts. Chainlink has achieved several milestones and has had several key integrations, showcasing its expanding influence and innovative capabilities.

Toncoin (TON)

Toncoin is a fast and scalable blockchain network integrated with Telegram. It has a market cap of over $18.9 billion and strong trading activity. Its unique architecture, growth potential, Telegram connection, dApp support, and fast transactions make it attractive to investors. However, Toncoin's price can be volatile, and it is not yet widely available on major exchanges.

Please note that cryptocurrencies are risky and volatile investments, and it is important to conduct thorough research and understand your risk tolerance before investing.

Frequently asked questions