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From Bitcoin and Ethereum to Dogecoin and Tether, there are tons of cryptocurrencies that can be overwhelming when you're just starting out in the cryptocurrency world. To help you get started, here are the top 10 cryptocurrencies by market capitalization – the total value of all coins in circulation today.
What are Cryptocurrencies?
A cryptocurrency is a digital asset that can circulate without the centralized authority of a bank or government. As of today, there are 23,994 cryptocurrency projects, representing the entire $1 trillion cryptocurrency market.
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1.Bitcoins (BTC)
- Market Cap: $537.1 billion
Bitcoin (BTC), created by Satoshi Nakamoto in 2009, is the original cryptocurrency. Like most cryptocurrencies, BTC runs on a blockchain, or transaction ledger, spread across a network of thousands of computers. Additions to distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof-of-work that makes Bitcoin safe and secure.
Bitcoin's value increased as it became a household name. As of May 2016, you can buy one Bitcoin for around $500. As of May 9, 2023, the value of one bitcoin was around $27,731. That means an increase of 5446%.
Related: How to buy Bitcoin
2. Ethereum (ETH)
- Market Cap: $222.3 billion
Ethereum, a cryptocurrency and blockchain platform, is a favorite among software developers for its potential applications, such as smart contracts and non-volatile tokens (NFTs) that execute automatically when conditions are met.
Ethereum has also seen significant growth. From April 2016 to the end of May 2023, its price increased by 16,693%, from about $11 to $1,847.
Related: How to buy Ethereum
3. Close (USDT)
- Market Cap: $82.4 billion
Unlike other forms of cryptocurrency, Tether (USDT) is a stablecoin, meaning it is backed by fiat currencies such as the US dollar and the euro and hypothetically has a value of one of those denominations. In theory, this means that Tether's value should be more stable than other cryptocurrencies, helping investors concerned about the extreme volatility of other currencies.
4. Binance Coin (BNB)
- Market Cap: $49 billion
Binance Coin (BNB) is a cryptocurrency that you can use to trade and pay on Binance, one of the largest cryptocurrency exchanges in the world. Since its launch in 2017, Binance Coin has expanded in the past to facilitate trading on the Binance exchange platform. It can now be used for commerce, payment processing or travel booking. It can also be bought or exchanged for other cryptocurrencies such as Ethereum or Bitcoin.
In 2017, the price of BNB was just $0.10. At the end of May 2023, its price rose to $315, a gain of 314,430%.
Related: How to buy cryptocurrency
5. US Dollar Currency (USDC)
- Market value: $30.2 billion
Like Tether, USD (USDC) is a stablecoin, meaning it is backed by the US dollar and pegged at a ratio of 1 USD to 1 USDC. USDC is powered by Ethereum and you can use USD Coin to complete global transactions.
6.XRP
- Market Cap: $22.1 trillion
Created by the same founders of digital technology and payment processing company Ripple, XRP can be used on this network to facilitate the exchange of various types of currencies, including fiat and other major cryptocurrencies.
At the beginning of 2017, the price of XRP was $0.006. By May 9, 2023, its value increased by 7001% to $0.43.
7. Cardana (ADA)
- Market value: $12.7 billion
A latecomer to the cryptocurrency scene, Cardano (ADA) stands out with its first proof of concept. This method speeds up transaction times and reduces energy consumption and environmental impact, eliminating the competitive aspect of troubleshooting transaction verification on platforms like Bitcoin. Cardano also works like Ethereum to enable smart contracts and decentralized applications, which are ADA mandates for coins.
Cardano's ADA token has experienced relatively modest growth compared to other major cryptocurrencies. In 2017, the price of ADA was $0.02. As of May 9/2023, its price was $0.37. This is an increase of 1730%.
8.Dogecoin (DOGE)
- Market value: $10.2 billion
Dogecoin started out as a joke in 2013, but thanks to its dedicated community and creative memories, it quickly became a popular cryptocurrency. Unlike many other cryptocurrencies, there is no limit to the number of Dogecoins that can be created, making the coin subject to depreciation as supply increases.
The price of Dogecoin in 2017 was $0.0002. In May 2023, its value increased by 36.477% to $0.07.
9. Polygonal (MATIC)
Founded in 2017, Polygon (formerly known as Matic Network) is a very popular cryptocurrency. It is called "The Internet of Blockchains Ethereum". Maybe that's why MATIC supports more than 7,000 decentralized applications (dApps).
Polygon has also experienced tremendous growth since its first release. When MATIC was launched, the starting price was $0.00263. MATIC is currently trading at $0.89, a gain of 33.788%.
Related: What is a landfill?
10. Solana (G)
Designed to enable the use of decentralized finance (DeFi), decentralized applications (DApps) and smart contracts, Solana is powered by a unique hybrid proof-of-concept and proof-of-history mechanism for fast and secure processing of transactions. SOL, Solana's original signal provides the platform.
When it launched in 2020, SOL started at $0.77. At the end of May 2023, its price was around $20.87, an increase of 2611%.
* Market cap and prices taken from coinmarketcap.com as of May 13:31 UTC. 9 of 2023
Encryption FAQ
What are Cryptocurrencies?
Cryptocurrency is a form of currency that exists only digitally. Cryptocurrency can be used to pay for online purchases without going through intermediaries such as a bank, or it can be used as an investment.
How are cryptocurrencies different from stock trading?
While you can invest in cryptocurrencies, they are very different from traditional investments like stocks. When you buy stock, you're buying a share of the company, which means you have the right to vote on the direction of the company. If that company goes bankrupt, you may also receive compensation after paying off your creditors from your liquidated assets.
Buying a cryptocurrency doesn't give you ownership of anything other than the token itself; it's like exchanging one form of currency for another. If the cryptocurrency loses its value, you will get nothing after that.
Other key differences should be noted:
- Trading Hours: Stocks are traded only during stock exchange hours, which are generally 9:30am to 4:30pm EST, Monday through Friday. The cryptocurrency markets never close, so you can trade 24 hours a day, seven days a week.
- Regulatory: Stocks are regulated financial products, which means their credentials are verified by a government authority and their financial data is public records. Conversely, cryptocurrencies are not regulated investment vehicles, so you may not be aware of the internal dynamics of your cryptocurrency or the developers working on it.
- Volatility: Stocks and cryptocurrencies carry risk; Your investment may lose value. However, stocks are directly tied to companies and typically rise and fall based on the performance of those companies. Cryptocurrency prices are more speculative – no one is sure of their value yet. This makes them more volatile and only influenced by celebrity tweets.
Do I have to pay taxes on cryptocurrencies?
When buying and selling coins, it is important to pay attention to the taxation rules of cryptocurrencies. Cryptocurrency is treated as an underlying asset, like stocks, not money. This means that if you sell cryptocurrencies at a profit, you will have to pay capital gains tax. This is even if you use your own cryptocurrency to pay for purchases. If you get more value than you paid for, you'll pay tax on the difference.
Are there cryptocurrency Exchange Traded Funds (ETFs)?
With thousands of cryptocurrencies (and the high volatility associated with most of them), it's understandable that you want to take a diversified approach to investing in cryptocurrencies to minimize the risk of losing money.
Many companies have offered cryptocurrency ETFs, including Fidelity, but regulatory hurdles have slowed the rollout of any consumer products. As of June 2021, there are no ETFs on the market for the average investor.
You can buy cryptocurrencies through exchanges like Coinbase, Kraken or Gemini. Additionally, some brokers such as WeBull and Robinhood allow consumers to buy cryptocurrencies.
Why are there so many cryptocurrencies?
Cryptocurrency is a growing field with over 19,000 cryptocurrencies and very few barriers to entry. Notably, the past year has seen a boom in the cryptocurrency market, with the addition of thousands of new cryptocurrency projects.
While some cryptocurrencies serve as currency, others are used to develop infrastructure. For example, in the case of Ethereum or Solana, developers create other cryptocurrencies based on these platform coins, creating more options (and cryptocurrencies).
When we first think of cryptocurrency, the first thing that comes to mind is Bitcoin. After all, Bitcoin accounts for more than 45% of the entire cryptocurrency market. So when we talk about any cryptocurrency other than Bitcoin, all these cryptocurrencies are considered altcoins.
For example, Ethereum is the most popular altcoin.
Part of what makes Bitcoin so valuable is its scarcity. The maximum number of bitcoins is limited to 21 million coins. There are currently 19 million coins in circulation.
Bitcoin rewards cryptominers for creating a reserve of a certain number of Bitcoins. (To be precise, 6.25 BTC is credited when a miner successfully mines a block.). To keep the process under control, Bitcoin mining rewards are halved roughly every four years.
Why are cryptocurrencies important?
Cryptocurrencies are gaining in importance and are not going away anytime soon. Although the original purpose of cryptocurrency was to solve the problems associated with traditional currencies, many useful cryptocurrencies have been created today thanks to the advent of the blockchain.