In the last few years, everyone has heard about the industry that has completely changed the planet, with many more technological advancements to come. Some have already declared crypto as the future of finance.
In this article, we have summed up all the biggest names in cryptocurrencies and are about to provide you with a fully detailed guide of fascinating insights on each one, as well as a comparison between them. By the end of this article, I believe you will know exactly what to do with your money this year.
Top Cryptocurrencies to Consider
Bitcoin (BTC)
Market Cap: $1.2 trillion
Year-over-Year Return: +15%
Bitcoin is the oldest and most well-known cryptocurrency. Many people consider it a good way to store value, so it’s often called “digital gold.”
Bitcoin has existed since 2009 and has grown significantly since then. In 2021, it reached its highest price ever, nearly $69,000. Even though it has fluctuated greatly, many people still consider it a good investment.
Bitcoin is good for people who want a safer crypto investment. It’s widely accepted and many big companies now own it. However, it might not grow as much as smaller cryptocurrencies because it’s so big.
Ethereum (ETH)
Market Cap: $350 billion
Year-over-Year Return: +25%
Ethereum is the second-largest cryptocurrency. It’s different from Bitcoin because it can do more than just send money. Ethereum lets people build apps on its network. These apps can do things like lending money or trading without banks.
Ethereum has grown significantly since its launch in 2015. In 2022, it made a major change to its workings, making it more eco-friendly. This change, called “The Merge,” excited many people about Ethereum’s future.
Ethereum is suitable for those who want to invest in the future of blockchain technology. Many other crypto projects use Ethereum, which could help it grow more in the future.
Tether (USDT)
Market Cap: $83 billion
Year-over-Year Return: 0%
Tether is a stablecoin, a different kind of cryptocurrency. It’s designed to always be worth $1, which makes it less risky than other cryptocurrencies whose prices fluctuate widely.
People use Tether to keep their money safe in the crypto world without converting it back to regular money. It’s also useful for quickly trading other cryptocurrencies.
Tether is good for people who want to avoid the big price changes of other cryptocurrencies. But remember, it won’t grow in value like other cryptos might.
Binance Coin (BNB)
Market Cap: $45 billion
Year-over-Year Return: +10%
Binance Coin is Binance’s cryptocurrency, one of the biggest crypto exchanges. It started as a way to pay a lower transaction fee on Binance, but now it’s used for many other things. You can even use it to pay for travel in some places.
BNB has grown significantly since its start. It’s now used in many apps built on the Binance Smart Chain, making it one of the biggest cryptocurrencies.
Binance Coin is good for people who use the Binance exchange a lot. It can help save money on fees and is used in many other Binance projects.
Solana (SOL)
Market Cap: $25 billion
Year-over-Year Return: +40%
Solana is a newer cryptocurrency that’s known for being very fast. It can handle many more transactions per second than Bitcoin or Ethereum. This makes it good for things like trading and games.
Solana has grown quickly since it started in 2020. Many people like it because it’s fast and cheap to use. However, it has had some problems with its network going down sometimes.
Solana is suitable for investors who are looking to invest in a crypto that’s good for apps and games. But remember, it’s newer and might be riskier than older cryptocurrencies.
Cardano (ADA)
Market Cap: $15 billion
Year-over-Year Return: +5%
Cardano is often called an “Ethereum killer” because it tries to do similar things but better. It uses less energy than Bitcoin and can handle more transactions than Ethereum. Cardano is built by scientists and researchers who try to make it very secure and efficient. The coin uses advanced “Proof of stake” technology.
Cardano has grown steadily since its start in 2017. It’s not as big as Ethereum yet, but many believe it has the potential to grow significantly.
Cardano is good for people who want to invest in a cryptocurrency that’s trying to be more eco-friendly and scientifically designed. However, it’s still developing many of its features, so it might take time to see big results.
Side-to-side comparison
| Crypto | Market Cap | Trading Volume | Community | Real-World Use | Fees | Technology |
|---|---|---|---|---|---|---|
| Bitcoin | Very High | Very High | Very Large | Store of Value | Medium | Slow but Secure |
| Ethereum | High | High | Large | Smart Contracts | High | Improving Speed |
| Solana | Medium | Medium | Growing | Fast Transactions | Low | Very Fast |
| XRP | Medium | Medium | Medium | Money Transfers | Very Low | Fast |
| Binance Coin | Medium | High | Large | Exchange Token | Low | Fast |
Things to Think About When Buying
Market Cap
Market cap shows how big a cryptocurrency is by multiplying the price of one coin by the number of coins out there. It’s an important number for traders to know.
Bitcoin has the largest market cap, meaning it’s more stable with fewer big price changes. It’s like a steady ship. Smaller cryptocurrencies, like Solana, have lower market caps, which makes their prices move faster. This can be great for day traders who want quick gains, but it also means higher risk since prices can drop just as fast.
In short, a big market cap means stability, while smaller market caps can offer quicker gains but more risk. Understanding this helps you make better trading choices.
Trading Volume
Trading volume is super important for day trading. It shows how much money people buy and sell a cryptocurrency over a certain period of time. The higher the volume, the more popular the assets.
Also- when trading on extremely low volumes- you might not find someone to trade your asset for you.
Bitcoin and Ethereum have the highest trading volumes among all crypto coins. Solana and XRP also have good trading volumes but don’t match Bitcoin or Ethereum in this area.
I made a chart to show the comparison of the daily trading volume. Take a look at the huge difference between Bitcoin Ethereum and the rest of the coins:
Community Engagement
Think about it: Cryptocurrencies are decentralized. That means that no one controls their price besides supply and demand. And on top of that, it usually is not comparable to any other asset.
That means that as a thumb rule- if everyone is talking about a certain coin- more people are going to buy. More people buy, this drives up prices.
Bitcoin and Ethereum have the largest communities. These are the coins everyone is talking about on social media, in forums, and in online groups. A large, active community often leads to more trust and wider adoption.
Solana is catching up with a growing and very excited community. People are really backing this project, which is helping it gain more attention. XRP and Binance Coin also have active communities, but they’re not as big or as widespread as Bitcoin and Ethereum.
In short, a strong community can boost a cryptocurrency’s popularity and value. When lots of people support a coin, it has a better chance of staying relevant and growing.
Real-World Use
Cryptocurrencies that have real-world uses are usually better for long-term trading. They tend to stick around and grow in value as more people find them useful.
Bitcoin is often seen as “digital gold.” People buy it and hold onto it as a store of value. It’s not just about quick trades—many trust it to keep their wealth safe over time.
Ethereum is different. It’s used for many apps and projects, especially in the world of decentralized finance (DeFi). Because of this, it’s more than just a coin—people use it to power other systems.
Solana is known for super-fast transactions and is getting popular for new apps, especially in areas like gaming and finance. XRP is all about moving money quickly between countries, which makes it popular for international payments.
Binance Coin is mostly used on the Binance exchange. Traders use it for lower fees and other benefits on the platform.
In short, cryptos that solve real problems or are used in everyday applications tend to be more reliable for long-term trading. Their practical use makes them more likely to succeed over time.
Fees
Every trader should be aware of fees, especially when day trading. High fees can quickly cut into profits.
Bitcoin and Ethereum can have high transaction fees, especially when a lot of people are using the network at the same time. This can make them expensive for frequent trading, as each trade may cost you more than you expect.
On the other hand, Solana, XRP, and Binance Coin usually have lower fees. These lower costs make them better for day traders who need to make quick, repeated trades without losing too much in fees.
Keeping an eye on fees is important when choosing which cryptocurrencies to trade. Lower fees mean more of your money stays in your pocket, which is key for maximizing your profits.
Technology
The technology that powers a cryptocurrency plays a big role in its value and how it performs in the market.
Bitcoin is known for being very secure, but it’s also slower than many other cryptos. While this makes it reliable, it can be frustrating for quick transactions. Still, its strong security keeps its value steady.
Ethereum is currently working on improving its speed and efficiency with upgrades to its system. This has many people excited, as faster transactions and lower energy use could boost its price in the future.
Solana, on the other hand, is already one of the fastest cryptos out there. It’s great for quick transactions, but it has had some network issues that can affect reliability. Despite these problems, many traders still see potential in Solana’s technology.
XRP is built specifically for fast and efficient money transfers, especially across borders. It’s known for being both quick and cost-effective, which helps keep its price competitive in the market.
Binance Coin uses technology that makes it not only fast but also very cheap to use, especially on the Binance exchange. This combination of speed and low fees keeps Binance Coin popular among traders.
In short, the technology behind each cryptocurrency can impact its price by influencing how fast, secure, and reliable it is. Cryptos with better technology tend to perform well in the long run.
How to Choose the Best Crypto for Day Trading
When picking a cryptocurrency for day trading, think about these things:
- How much risk can you handle? Bitcoin and Ethereum are less risky but might not change price as much. Smaller coins like Solana might change more but are riskier.
- How often do you want to trade? If you want to trade a lot, look for coins with high trading volumes and low fees, like Binance Coin or XRP.
- What time of day will you trade? Some cryptocurrencies are more active at different times, depending on where most of their traders are.
- How much do you know about crypto? If you’re new, starting with Bitcoin or Ethereum might be easier because there’s more information about them.
- What’s happening in the news? Big news can affect crypto prices, especially for smaller coins.
Remember, day trading crypto can be very risky. Prices can change a lot very quickly. Only trade with money you can afford to lose.
Always do your own research before you trade. It’s a good idea to start small and learn as you go. You might want to try trading with a small amount of money first to get used to how it works.
As you learn more, you can change your trading style and the cryptocurrencies you trade. Day trading crypto can be fun, but it’s important to stay cautious. The crypto world changes fast, and what’s popular today might not be tomorrow. Always keep learning and be ready to change your strategy if needed.
Risks to Remember
- Crypto prices can change a lot in a short time.
- There’s no guarantee that any crypto will go up in value.
- Some cryptos might fail and lose all their value.
- Crypto lacks regulation like “Fiat” money, so it offers less protection.
Tips for New Crypto Buyers
- Only invest money you can afford to lose.
Remember that crypto is an investment that carries a high risk. So, it is very different from a stock portfolio or something else from that category.
Especially if you are trading “Alt-coins”- those have the actual potential to just go to -0.
- Do your own research before buying any crypto.
Information is the key. Don’t be shy to ask for advice or to seek professional advice from a broker or financial advisor. The more experience you get, the more successful you will be, so don’t rush.
- Don’t put all your money in one crypto. Spread it out to lower risk.
Unless you are a risk taker. If you are looking for a strategy to manage your finances, try to think about the ratio between different financial products.
- Be careful of scams. If something sounds too good to be true, it probably is.
Cryptocurrencies are a fertilized ground for scammers; something about the fact that it’s completely anonymous and decentralized makes it highly attractive to criminals.
Be very aware of this and do your research about different regulation authorities before you start.
Also remember: NEVER give ANYONE- access to your crypto account.
- Keep your crypto safe. Use secure wallets and don’t share your private keys.
If you actually hold a sufficient amount of capital in crypto, the best would be to buy a “Cold-Wallet”
Pros and Cons of Investing in Cryptocurrency
Pros:
- Can make a lot of money if the price goes up
- Available to buy and sell 24/7
- Some have interesting technology that could be important in the future
Cons:
- Prices can change a lot very quickly
- Not regulated like normal money, so less protection
- Some cryptocurrencies might fail and lose all their value
How to Buy Cryptocurrency
- Choose a crypto exchange: Popular ones include Coinbase, Binance, and Kraken.
- Create an account: You’ll need to prove who you are with ID.
- Add money to your account: Usually done with a bank transfer or credit card.
- Start by buying a small amount of your chosen cryptocurrency to get used to how it works.
- Store your cryptocurrency safely: Use a secure wallet on the exchange or a separate one.
How to Report Cryptocurrency for Taxes
In most countries, you need to pay taxes on cryptocurrency profits.
Here are some basic rules:
- If you sell cryptocurrency for more than you bought it for, you might need to pay tax on the profit.
- Using cryptocurrency to buy things might count as selling the crypto and you might need to pay tax.
- You might need to pay income tax on cryptocurrency if you’re paid in cryptocurrency.
It’s best to keep good records of all your cryptocurrency transactions. If you’re unsure about the tax rules, ask a tax expert for help.
Frequently Asked Questions (FAQs)
Q: What makes a cryptocurrency valuable?
A: Things like how useful it is, how many people use it, and how much people trust it can make a cryptocurrency valuable.
Q: What is a stablecoin, and why invest in them?
A: Stablecoins are a type of cryptocurrency. They aim to maintain a steady value. People often link this value to a regular currency, like the US dollar. People invest in them to avoid the big price changes of other cryptocurrencies.
Q: Is cryptocurrency a good long-term investment?
A: Cryptocurrency can be a good long-term investment, but it’s very risky. Prices can change a lot, and some cryptocurrencies might fail. It’s important to only invest money you can afford to lose and to spread your investments across different things.
Remember, the crypto market changes quickly. What’s popular now might not be in a few months. Always do your own research and be careful with your money.
Cryptocurrencies can be exciting, but they’re also risky. Start small, learn as you go, and never risk more than you can afford to lose.
Conclusion
Buying cryptocurrencies can be exciting, but it’s important to be careful. The best crypto to buy depends on your goals. Bitcoin and Ethereum are viewed as safer options. In contrast, newer coins like Cardano and Solana may provide more growth potential.
Remember, the crypto market changes quickly. What’s popular now might not be in a few months. Always do your own research and only invest what you can afford to lose.
Cryptocurrencies are still new and risky. But they also offer a chance to be part of a new technology that could change how we use money. Whether you’re looking to make quick profits or invest for the long term, there is a crypto that might fit your needs.
