Key points
- Bitcoin was the original cryptocurrency that launched about 15 years ago.
- Bitcoin and ethereum dominate the crypto market, but thousands of other cryptos exist.
- Most cryptos have small market capitalizations and are risky, volatile investments.
The cryptocurrency market is known for its extreme volatility and unpredictability. Despite a history of upswings and downswings, top cryptocurrencies have performed well for patient, long-term investors.
Thousands of cryptocurrencies exist. But the crypto world is still dominated by bitcoin and ethereum. Their market capitalizations comprise about 71% of the $2.61 trillion global crypto market.
Here’s a list of the 10 largest cryptocurrencies by market cap, excluding stablecoins.
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1. Bitcoin (BTC)
Price: $69,941.48
Market cap: $1.4 trillion
Year-over-year return: 162%
Launched in 2009, bitcoin remains the most popular and valuable cryptocurrency. It was developed by an individual or a group under the pseudonym Satoshi Nakamoto. Its decentralized, blockchain-based system to verify transactions has transformed how people view digital security and currency.
But critics have raised several concerns about bitcoin. Its energy-intensive, proof-of-work consensus mechanism may need help scaling the network. Several large-scale crypto projects also now have higher transaction speeds than bitcoin. Meanwhile, other projects have created blockchains with special designs to improve bitcoin’s functionality.
2. Ethereum (ETH)
Price: $3,911.95
Market cap: $469.9 billion
Year-over-year return: 115%
Ethereum was one of the first altcoins. An altcoin is an alternative to bitcoin. The leading altcoin debuted in 2015 and ranks second to bitcoin in market capitalization.
What sets the ethereum blockchain apart is its introduction of smart contracts. These contracts are pieces of code that run decentralized applications. The ethereum blockchain now supports over 4,400 dApps and developer tools.
The native cryptocurrency of the ethereum network is ether. In 2023, ethereum transitioned from a proof-of-work consensus mechanism to a less energy-intensive, proof-of-stake transaction system. Ethereum is now a greener investment than bitcoin.
3. BNB (BNB)
Price: $612.30
Market cap: $90.4 billion
Year-over-year return: 98%
Binance is one of the world’s largest cryptocurrency exchanges. BNB is its native crypto. BNB was initially created as a utility token built on the ethereum network. Its original purpose was to give users access to discounted trading fees on the Binance exchange.
The token has since transitioned to Binance’s blockchain and has evolved to serve several purposes. BNB can now be used for various applications, transactions and other purposes. Unfortunately, like other cryptos, Binance has run afoul of the U.S. Securities and Exchange Commission. The SEC sued the company in 2023 on charges of violating securities laws.
4. Solana (SOL)
Price: $175.64
Market cap: $78.9 billion
Year-over-year return: 805%
Designed to compete with the ethereum network, solana launched in March 2020. The crypto’s blockchain supports dApps, smart contracts and nonfungible tokens. SOL has a unique hybrid proof-of-stake and proof-of-history verification system. This hybrid system is a selling point because it makes solana cheaper and faster than ethereum.
Unfortunately, reliability has been solana’s downfall. The network has suffered several major outages since the beginning of 2022. At one point in February 2023, it was down for nearly 19 hours. Solana must improve stability and regain user trust to be an “ethereum killer.”
5. XRP (XRP)
Price: $0.53
Market cap: $29.2 billion
Year-over-year return: 16%
Ripple is a global payments network designed for institutional use. Its native cryptocurrency is XRP. The Ripple network offers an alternative to the Society for Worldwide Interbank Financial Telecommunications. SWIFT is the traditional system used by banks and other financial institutions for international money transfers.
Ripple claims its network is superior to SWIFT because it facilitates faster, cheaper and more secure transactions. The crypto scored a partial court win over the SEC in 2023 when a judge ruled that XRP is “not necessarily a security.” But Ripple is still battling the SEC over a nearly $2 billion fine concerning alleged XRP sales to institutional clients.
6. Dogecoin (DOGE)
Price: $0.17
Market cap: $24.3 billion
Year-over-year return: 137%
Created in 2013, DOGE was launched as a parody of bitcoin. But dogecoin investors are dead serious about its prospects today. DOGE has become one of the most popular meme coins with several high-profile supporters.
Tesla CEO and dogecoin investor Elon Musk is the cryptocurrency’s most visible supporter. The controversial Musk referenced the crypto several times, triggering extreme price volatility. Consequently, a group of dogecoin investors has sued Musk, alleging he manipulated prices deliberately. Billionaire entrepreneur Mark Cuban is also a DOGE supporter.
7. Toncoin (TON)
Price: $6.47
Market cap: $22.5 billion
Year-over-year return: 224%
Toncoin is a “layer 1” token developed in 2018 by encrypted messaging company Telegram. The toncoin network is known for its smart contract capability and transaction speed. It has an impressive blockchain speed of just five seconds.
Despite the network’s speed, it must attract more developers to compete with ethereum in the long term. Toncoin has generated impressive bullish momentum following reports that Telegram is considering an initial public offering. A successful Telegram IPO likely wouldn’t impact TON demand. But it would significantly increase Telegram’s visibility.
8. Cardano (ADA)
Price: $0.48
Market cap: $17.3 billion
Year-over-year return: 33%
Cardano is a decentralized proof-of-stake blockchain created by ethereum co-founder Charles Hoskinson. The crypto launched in 2017 and was designed to be more efficient than other proof-of-work blockchains at the time.
Like ethereum, the cardano network was designed for functionality. Its blockchain aims to facilitate dApp development and verifiable smart contracts. ADA is the native cryptocurrency of the cardano network, which is used to run dApps. By staking ADA, cardano users can help verify and facilitate transactions. They earn ADA tokens as a reward.
9. Avalanche (AVAX)
Price: $40.14
Market cap: $15.8 billion
Year-over-year return: 180%
Avalanche’s mainnet went live in September 2020. Like many other cryptos, avalanche aims to become a fast, secure blockchain. The crypto is a contract platform developers can use to build dApps.
Avalanche’s chief competitor is the ethereum network. But AVAX has several unique features. For one, it’s capped at 720 million tokens.
The blockchain’s native token is used to manage governance and transaction fees. AVAX also has a unique consensus mechanism that involves a sufficient majority of validators to approve a transaction.
10. Shiba Inu (SHIB)
Price: $0.00002
Market cap: $15.1 billion
Year-over-year return: 196%
Shiba Inu is a popular meme coin, launched in August 2020 on the ethereum blockchain. Its founder is an anonymous figure known as Ryoshi. Unlike dogecoin, which started as a humorous take on cryptocurrencies, shiba inu was created with a serious intent. The crypto posed a serious challenge to dogecoin for dog-themed meme coin market share. SHIB has inexplicably become one of the most valuable cryptos in the world.
But there are some subtle differences between DOGE and SHIB. For one, SHIB is built on the ethereum network, which allows it to handle smart contracts and dApps. It also has a unique community of followers known as the SHIBArmy. These members also help to steer the crypto project.
*Market caps and pricing sourced from CoinMarketCap.com, current as of 7:07 a.m. UTC on May 23, 2024.
What is cryptocurrency?
Cryptocurrency is digital money that can be held as an investment or used to purchase goods or services.
Banks or other financial institutions aren’t needed to verify or complete transactions. Cryptocurrency transactions are verified via a consensus mechanism and recorded on a blockchain. These are permanent ledgers that track and record trades and assets.
Cryptocurrencies are essentially self-contained, digital payment platforms. They are typically not issued or controlled by central governments or other authorities. Instead, they’re controlled by a transparent software protocol that leverages the power of peer-to-peer networks of computers. The primary goal of cryptocurrencies is to give individuals complete control over their assets.
What is crypto trading?
Crypto trading involves buying and selling cryptocurrencies to generate profits. Crypto traders use different strategies based on risk tolerance, time commitment and financial goals:
- Long-term traders choose high-quality cryptocurrencies to buy and hold for years or decades. They ignore the day-to-day or month-to-month fluctuations in the crypto market. Instead, these traders focus on the gradual growth of crypto use and investment over time.
- Crypto swing traders seek to capitalize on trends in the market by buying and selling within days or weeks.
- Crypto day traders buy and sell within the same trading day.
- Crypto scalp traders buy and sell several times throughout the day. They look to make a net profit from many small gains.
Pros and cons of crypto trading
The volatility of the cryptocurrency market creates opportunities for traders to make big profits relatively quickly. But volatility makes crypto trading extremely risky and challenging, even for experienced traders.
Brian Evans is CEO and founder of BDE Ventures, a private investment company that backs crypto projects. He said inexperienced traders should tread carefully in the crypto market.
“Because crypto is open to all, it’s easier for newcomers to trading to both take a shot at it but also blow up in terms of losing all their capital,” Evans said. “With this in mind, it’s best to learn as much as possible about trading and all the related nuances before diving headlong into it.”
Here are several pros and cons of crypto trading:
Pros
- Crypto has a track record of extremely strong performance over long periods.
- Many cryptos have a capped supply.
- If global cryptocurrency usage continues to rise, crypto demand should support prices.
Cons
- Extreme volatility makes the crypto market one of the most challenging markets to trade.
- Crypto has faced regulatory crackdowns.
- Unlike stocks and bonds, for example, cryptocurrencies are not backed by revenue-generating companies or other assets.
How to buy cryptocurrency
Cryptocurrencies trade on exchanges, similar to stocks. But not all exchanges and brokerages support cryptocurrencies, especially altcoins.
To buy cryptocurrency, first identify a broker or exchange that offers crypto trading. Leading crypto brokers include SoFi and Robinhood. Popular cryptocurrency exchanges include Binance and Coinbase.
Steps to opening a cryptocurrency exchange account
Once you choose a crypto broker or exchange, you must create and verify a trading account. The process may vary depending on the platform. But it typically includes the following steps:
- Create an account. You may need to choose the appropriate account type and submit personal information.
- Verify your identity. This process may involve submitting a copy of a bank statement, photo ID or other documents.
- Read and agree to a user agreement. User agreements typically spell out the terms of service associated with your account. These include any penalties or fees you may need to understand.
- Link a payment method. Choose a bank account or other account type to link to your crypto trading account. This will allow you to transfer money in and out of the account.
- Fund your account. Consider how much money you want to start with in your crypto trading account. Then, initiate a transfer from your linked account.
Frequently asked questions (FAQs)
Yes, the Grayscale Bitcoin Trust ETF (GBTC), Fidelity Wise Origin Bitcoin Fund (FBTC) and iShares Bitcoin Trust (IBIT) are three popular Bitcoin ETFs.
Any investment comes with risks. And there’s no such thing as a safe crypto investment. Bitcoin and ethereum are generally considered the least risky crypto investments. Their dominant market share and relatively widespread adoption make them safer than smaller altcoins.
Given so many unknowns, it’s tough to predict how cryptocurrency will perform in the future. Factors include the global regulatory environment, U.S. dollar stability and crypto integration into the existing financial system.
Bitcoin and other leading cryptos have performed extremely well up to this point. Their capped or restricted supplies create significant potential for a boom under the right circ*mstances.
Cryptocurrencies are run on blockchain technology and are open source, meaning the code behind them is fully public and visible to all. Creating a cryptocurrency can be as simple as copying and pasting an existing blockchain or changing the name.
