From Bitcoin and Ethereum to Dogecoin and Tether, the vast number of different cryptocurrencies can be overwhelming when you’re first starting out in the crypto world. To help you get your bearings, here are the top 10 cryptocurrencies to invest in, based on their market capitalization or the total value of all the coins currently in circulation.
What are Cryptocurrencies?
A cryptocurrency is a digital asset based on blockchain technology that can circulate without a central authority, like a bank or government. As of August 27, 2024, there are over 8,000 cryptocurrencies in the market, representing a market capitalization of $2.21 trillion.
Top 10 Cryptocurrency
1. Bitcoin (BTC)
- Market Cap: $1.25 Trillion
- YTD: 142.52%
Created by Satoshi Nakamoto in 2009, Bitcoin (BTC) is the original cryptocurrency. Like most cryptocurrencies, BTC operates on a blockchain, which is a distributed ledger of transactions maintained by a network of thousands of computers.
Since the confirmation of additions to distributed ledgers requires solving cryptographic puzzles—a process known as Proof of Work—Bitcoin is kept secure from fraudsters.
Bitcoin’s price has skyrocketed as it has become a household name. In May 2016, you could buy one Bitcoin for around $500. As of August 27, 2024, one Bitcoin is valued at $63,065.
2. Ethereum (ETH)
- Market Cap: $323.42 Billion
- YTD: 63.00%
Ethereum is both a cryptocurrency and a blockchain platform, favored by developers for its potential applications, such as so-called smart contracts that execute automatically when conditions are met and non-fungible tokens (NFTs).
Ethereum has also experienced significant growth. From April 2016 to the end of July 2024, its price surged from approximately $11 to $3,409, marking a 30,893% increase. As of August 27, 2024, the price of ETH is $2,687.
3. Tether (USDT)
- Market Cap: $118.05 Billion
- YTD: 0.06%
Unlike other forms of cryptocurrency, Tether (USDT) is a stable coin, meaning that fiat currencies back it and it is theoretically equivalent to one of them, such as the US Dollar or Euro.
In theory, this means that Tether’s value is considered more stable compared to other cryptocurrencies, and it is preferred by investors who are cautious about the high volatility of various coins. As of August 27, 2024, the price of USDT is $1.00.
Ethereum has also experienced significant growth. From April 2016 to the end of July 2024, its price rose from approximately $11 to $3,409, an increase of 30,893%. As of August 27, 2024, the price of ETH is $2,687.
4. Binance Coin (BNB)
- Market Cap: $81.11 Billion
- YTD: 157.00%
Binance Coin (BNB) is a cryptocurrency that you can use for trading and paying fees on Binance, one of the world’s largest crypto exchanges. Since its launch in 2017, Binance Coin initially facilitated trading only on the Binance exchange platform.
Now, it can be used for trading, payment processing, or booking travel arrangements. It can also be traded or exchanged for other cryptocurrencies like Ethereum or Bitcoin.
In 2017, the price of BNB was just $0.10. By the end of April 2024, its price had risen to approximately $560, an increase of 560,394%. As of August 27, 2024, BNB is trading at $555.70.
5. Solana (SOL)
- Market Cap: $73.94 Billion
- YTD: 682.23%
Designed to support the use of decentralized finance (DeFi), decentralized apps (DApps), and smart contracts, Solana operates on a unique hybrid Proof of Stake and Proof of History mechanism to process transactions quickly and securely. SOL, Solana’s native token, powers the platform.
When it launched in 2020, SOL was priced at $0.77. By the end of July 2024, its price had risen to approximately $156.62, marking an increase of 20,241%. As of August 27, 2024, Solana is trading at $158.64.
6. USD Coin (USDC)
- Market Cap: $34.53 Billion
- YTD: -0.02%
Similar to Tether, USD Coin (USDC) is a stablecoin, meaning it is backed by the US dollar and aims for a 1 USD to 1 USDC ratio. USDC is powered by Ethereum, and you can use USD Coin to complete global transactions. As of August 27, 2024, USDC is trading at $0.9998.
7. XRP (XRP)
- Market Cap: $33.34 Billion
- YTD: 12.73%
Created by Ripple, a digital technology and payment processing company, XRP can be used to facilitate exchanges between different types of currencies, including fiat currencies and other major cryptocurrencies.
At the start of 2017, XRP was priced at $0.006. By May 2, 2024, it had reached $0.52, representing an increase of 8,497%. As of August 27, 2024, XRP is trading at $0.5922.
8. Dogecoin (DOGE)
- Market Cap: $15.45 Billion
- YTD: 68.37%
Originally developed as a Layer-1 blockchain for Telegram’s encrypted messaging platform, Toncoin was soon abandoned before being acquired by the TON Foundation. The project’s name was even changed from “Telegram Open Network” to “The Open Network,” both referred to by the acronym TON.
Toncoin, formerly known as Gram, is the native token of TON. It is an application that allows users to buy, send, and store funds on the incredibly fast and eco-friendly TON network. As of August 27, 2024, DOGE is trading at $0.1061.
9. TRON (TRX)
- Market Cap: $14.06 Billion
- YTD: 109.87%
Launched by the TRON Foundation in 2017, TRON is a decentralized blockchain-based operating system. Initially, tokens were based on ERC-20 and developed on Ethereum, but a year after its launch, they transitioned to their own network.
TRON software supports smart contracts, dApps, and various blockchain systems. The crypto platform uses a transaction model similar to Bitcoin (BTC). As of August 27, 2024, TRX is trading at $5.38.
10. Toncoin (TON)
- Market Cap: $13.64 Billion
- YTD: 109.84%
Originally developed as a Layer-1 blockchain for Telegram’s encrypted messaging platform, Toncoin was soon abandoned before being acquired by the TON Foundation. The project’s name was even changed from “Telegram Open Network” to “The Open Network,” both referred to by the acronym TON.
Toncoin, formerly known as Gram, is the native token of TON. The application allows users to buy, send, and store funds on the fast and eco-friendly TON network. As of August 27, 2024, TON is trading at $5.38.
The token moved from the 8th to the 10th position following the arrest of Telegram founder Pavel Durov for investigation into allegations of drug trafficking and distribution of child exploitation images on his app.
What Are Cryptocurrencies?
Cryptocurrencies are a form of currency that exists entirely in digital form. They can be used for online purchases without the need for an intermediary, such as a bank, or they can be held as an investment.
How Do Cryptocurrencies Work?
Cryptocurrencies are various forms of digital money, generally based on blockchain technology. Blockchain technology allows most cryptocurrencies to operate as “trustless” transactions, meaning no central authority monitors transactions on the cryptocurrency’s blockchain.
Why Are There So Many Cryptocurrencies?
Cryptocurrency is an emerging field with over 9,000 crypto projects as of March 2024. While some cryptocurrencies function as currencies, others are used for infrastructure development.
For example, in the cases of Ethereum or Solana, developers are creating additional cryptocurrencies on these platform currencies, leading to even more possibilities (and cryptocurrencies).
How to Choose the Best Cryptocurrency for Investment
When selecting the best cryptocurrency for investment, it’s important to consider your individual goals, timeline, and risk profile, just as you would with any investment. Additionally, it helps to ensure through due diligence that any cryptocurrency project you’re interested in is legitimate and secure.
In general, investors should consider the following factors when evaluating cryptocurrencies:
- Market Capitalization
- Liquidity
- Security
- Use Case
When searching for cryptocurrency investments, first consider the exchanges where tokens are listed. Maxim Repa, an analyst at Symbolic Capital, states that tokens featured on major exchanges typically offer better liquidity, attract larger investors, and reach a broader audience, increasing the potential buyer base.
How to Invest in Cryptocurrencies
You can buy cryptocurrencies through exchanges like CoinDCX, WazirX, or Coinswitch.
How to Report Cryptocurrency on Taxes
If you buy and sell coins, it’s important to pay attention to cryptocurrency tax rules.
Cryptocurrency is considered a capital asset, similar to stocks. This means that if you sell cryptocurrency at a profit, you will need to pay capital gains tax. This applies even if you use your cryptocurrency to make a purchase. If you receive a higher value than the amount you paid, you will owe tax on the difference.
