Cryptocurrencies – or more accurately called crypto assets since they do not distribute from central banks – have quickly become one of the hottest topics in financial markets, offering great potential but also carrying with them risks such as price volatility and security concerns. With their meteoric rise over recent years, many are wondering what are the top 5 crypto currencies they should invest in.
Bitcoin is one of the world’s most well-known and widely used cryptocurrencies, often described as digital gold and boasting the largest market capitalization among existing coins. Many retailers accept it as payment, while larger corporations use it to settle transactions and pay employees.
Ethereum is the second-most-popular cryptocurrency and could even overtake Bitcoin as its leading coin. As a decentralized application development platform, its immense popularity has drawn thousands of competitors, but none has managed to match its market capitalization value or value proposition.
Ripple is another strong contender for third most valuable cryptocurrency status, being an institutional payments network built on its own blockchain and used by some of the biggest banks worldwide as an easy and economical way to settle transactions.
Stablecoins are cryptocurrencies tied to an external asset’s price, such as fiat currency. USD Coin and Tether are among the leading stablecoins that aim to be less volatile and provide investors with more predictable investment opportunities.
Dogecoin and Shiba Inu have quickly become some of the most meme-driven coins due to their outrageous looks, yet still remain valuable assets that could further gain in popularity as more people discover them.
It can be challenging to predict which coins will succeed over the long-run in the cryptocurrency market, which makes it hard to make accurate predictions. Therefore, it is vitally important that you remain informed on new developments and learn about all available technologies. Diversifying your portfolio to include both established coins as well as those which could become lucrative later can reduce risks when one position fails and minimize the possibility of substantial losses in a single situation. Always do your own research first and ensure you fully comprehend all associated risks prior to investing real money into crypto trading.