Largest Crypto Currencies
Cryptocurrencies are digital or virtual currencies that use cryptography for secure transactions and decentralized ledger such as blockchain. They and are a growing asset class for investors.
Risk Warning
Cryptocurrencies are speculative, with regulatory uncertainties, hacking risks, and extreme price swings. Only invest money you can afford to lose and diversify your portfolio.
What Are Cryptocurrencies?
- Digital Assets: Cryptocurrencies exist entirely online and are not issued by central banks. Popular examples include Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
- Decentralization: They rely on blockchain networks, which are decentralized systems maintained by a distributed network of computers, ensuring security and transparency.
- Utility: Beyond being a medium of exchange, cryptocurrencies are used in smart contracts, decentralized finance (DeFi), and non-fungible tokens (NFTs).
How Cryptocurrencies Work
- Blockchain Technology: Transactions are verified and recorded on a public ledger, ensuring transparency.
- Mining and Staking: Mining involves solving complex computational puzzles to validate transactions (e.g., Bitcoin). Staking, used in proof-of-stake systems, rewards users who lock up assets to validate transactions (e.g., Ethereum).
- Volatility: Prices are highly volatile, influenced by market demand, technology upgrades, regulation, and macroeconomic factors.
How to Capitalize on Cryptocurrencies
- Buy and Hold: Long-term investors can buy established cryptocurrencies like Bitcoin or Ethereum, betting on widespread adoption.
- Trading: Use technical analysis to profit from short-term price movements.
- Diversification: Explore altcoins and DeFi tokens to diversify and tap into high-growth segments.
- Staking and Lending: Earn passive income by staking coins or lending them on DeFi platforms.
- Thematic ETFs: Invest indirectly through ETFs focused on blockchain technology or cryptocurrency companies.
Our Criteria
There are hundreds of Cryptocurrencies, so trying to differentiate one from another can be difficult especially when there is limited information on the underlying business of the Crypto coin. We have decided to use the Cryptocurrency market capitalisation as our selection criteria which will give us the 20 largest Cryptocurrencies.