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Cryptocurrencies offer a mix of opportunity and risk. While the market has matured and larger digital assets like bitcoin and Ethereum are now recognised as legitimate investments by professionals, investing in them remains volatile and complex. 

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For astute investors, crypto assets can be an interesting addition to a diversified portfolio. However, they require careful research, strong security practices and a strong stomach to weather the volatility they bring. The Australian Government is yet to introduce legislation to Parliament to regulate crypto markets, and until they do, it will remain a haven for scammers.

Nevertheless, Australians are crypto-curious. According to consumer group CHOICE, almost one in five Aussies are either involved in some form of cryptocurrency trading or are interested in getting involved. Those who steer clear from crypto often do so because of the risk of crypto scams. Some 4.6 million Australians own cryptocurrency, and Australia ranks third in the world for crypto uptake.

From bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, each with different strengths, weaknesses and varying degrees of potential.

Below are the top 10 cryptocurrencies based on their market capitalisation or the total value of all the coins currently in circulation. This is not a recommendation of what you should or should not buy; it is merely a list of the largest projects ranked by market capitalisation so you can get a sense of the playing field before you decide whether to roll the dice and invest in crypto.

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Related: Best Cryptocurrency Exchanges for Australians

What Are Cryptocurrencies?

A cryptocurrency is a digital asset that can circulate without the centralised authority of a bank or government.  According to CoinMarketCap, there are more than two million cryptocurrency projects out there that represent the entire $US1.76 trillion crypto market.

1. Bitcoin (BTC)

• Market cap: $US1.315 trillion

Created in 2009 by Satoshi Nakamoto, bitcoin (BTC) is the original cryptocurrency. As with most cryptocurrencies, BTC runs on a decentralised blockchain technology, which is a ledger logging transactions distributed across a network of thousands of computers. Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, bitcoin is kept secure and safe from fraudsters.

Bitcoin’s price has skyrocketed as it’s become a household name. In May 2016, you could buy one bitcoin for about $US500. As of July 20, 2024 (three months after the most recent bitcoin halving event occurred) a single bitcoin’s price was around $US66,667. That’s a growth of more than 13,233%.

Related: How To Buy Bitcoin

2. Ethereum (ETH)

• Market cap: $US420 billion

Both a cryptocurrency and a blockchain platform, Ethereum is a favourite of program developers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).

Ethereum has also experienced tremendous growth. From April 2016 to July 2024, its price went from about $US11 to around $US3,500, increasing 31,718%.

Related: How To Buy Ethereum

3. Tether (USDT)

• Market cap: $US113 billion

Unlike some other forms of cryptocurrency, Tether (USDT) is a stablecoin pegged to the value of US$1. This is achieved by having a 1-1 backing between the token and USD  which hypothetically keeps a value equal to one of those denominations because one token should always be able to be redeemed for one dollar. In theory, this means Tether’s value is supposed to be more consistent than other cryptocurrencies, and it’s favoured by investors who are wary of the extreme volatility of other coins.

4. Binance Coin (BNB)

• Market cap: $US87 billion

Binance Coin (BNB) is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform. Now, it can be used for trading, payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.

BNB’s price in 2017 was just $US0.10. By July 20, 2024, its price had risen to around $US590, a gain of approximately 589,900%.

Related: Cryptocurrency Glossary Of Terms

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Benefits:

Fast deposits, advanced trading tools and reporting

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Beginners to crypto and investing

Benefits:

Easy to use, instant deposits using credit card, PayPal and bank transfer

Crypto assets are unregulated & highly speculative. No consumer protection. Capital at risk.

5. Solana (SOL)

• Market cap: $US79.5 billion

Solana is a high-performance blockchain platform designed to provide fast and scalable transaction processing. It utilises a unique consensus algorithm called Proof of History, which allows it to process up to 65,000 transactions per second, making it one of the fastest blockchain networks available today. The platform supports smart contracts and decentralised applications (dApps) and is extremely popular for NFT trading.

The native token of the Solana platform is called SOL, and is used for paying transaction fees, staking, and participating in governance decisions on the network. The ICO price for SOL was $US0.22, and as of July 20, 2024, now sits at $US171, an increase of 77,627%.

6. U.S. Dollar Coin (USDC)

• Market cap: $US34 billion

Like Tether, USD Coin (USDC) is a stablecoin, meaning it’s backed by US dollars and aims for a 1 USD to 1 USDC ratio. USDC is available on numerous blockchains, such as Ethereum and Solana, and you can use USD Coin to complete global transactions.

7. XRP (XRP)

• Market cap: $US32.3 billion

Created by some of the same founders as Ripple, a digital technology and payment processing company, XRP can be used on that network to facilitate exchanges of different currency types, including fiat currencies and other major cryptocurrencies.

At the beginning of 2017, the price of XRP was $US0.006. As of July 20 2024, its price reached $US0.58, equal to a rise of 9,566%.

Related: Ethereum 2.0: The Ethereum Merge Explained

8. Toncoin (TON)

• Market cap: $US18.4 billion

Toncoin (TON) is the native token of The Open Network (TON), a decentralised Layer 1 blockchain network originally developed by Telegram but later transferred to the community. TON aims to onboard billions of users and enable quick, inexpensive, and energy-efficient blockchain transactions. The network boasts a flexible architecture, scalability, and support for millions of transactions per second through dynamic sharding and workchains. Toncoin can be used to pay transaction fees, settle payments, or validate transactions using TON’s proof-of-stake (PoS) consensus model.

TON’s unique features, such as ultra-fast transactions, low fees, apps ecosystem, and Telegram integration, have rocketed the coin into the top 10 cryptocurrencies by market capitalisation over the past few months. As of July 20, 2024, its price stands at $7.33, representing an increase of 1,366% from the coin’s ICO price of $0.50 in 2019.

9. Dogecoin (DOGE)

• Market cap: $18.1 billion

Dogecoin was famously started as a joke in 2013 but rapidly evolved into a prominent cryptocurrency thanks to a dedicated community and creative memes. Unlike many other cryptos, there is no limit on the number of Dogecoins that can be created, which leaves the currency susceptible to devaluation as supply increases.

Dogecoin’s price in 2017 was $0.0002. By July 20, 2024, its price sat at $0.1252, up 62,550%.

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10. Cardano (ADA)

• Market cap: $US15.5 billion

Somewhat later to the crypto scene, Cardano (ADA) is notable for its early embrace of proof-of-stake validation. This method expedites transaction time and decreases energy usage and environmental impact by removing the competitive, problem-solving aspect of transaction verification in platforms like bitcoin. Cardano also works like Ethereum to enable smart contracts and decentralised applications, which ADA, its native coin, powers.

Cardano’s ADA token has had relatively modest growth compared to other major crypto coins. In 2017, ADA’s price was $0.02. As of July 20, 2024, its price was at $0.4366. This is an increase of 2,083%.

*Market caps and pricing sourced from coinmarketcap.com, current as of July 2024

This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class.  Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.

Frequently Asked Questions (FAQs)

What are cryptocurrencies?

Cryptocurrency is a form of currency that exists solely in digital form. Cryptocurrency can be used to make near-instant overseas transfers and pay for purchases online without going through an intermediary, such as a bank, or it can be held as an investment.

Do you have to pay taxes on cryptocurrency?

If you buy and sell coins, paying attention to cryptocurrency tax rules is important. Cryptocurrency is treated as a capital asset, like stocks, rather than cash, which means that you need to pay your marginal tax rates on any capital gains or income earned from crypto when you register your return with the ATO. You can read our guide to crypto and tax in Australia.

What are altcoins?

When we first think of crypto, we usually think of bitcoin first. That’s because bitcoin represents more than 54% of the total cryptocurrency market. So when we talk about any cryptos outside of bitcoin, all of those cryptos are considered altcoins.

Ethereum, for instance, is regarded as the most popular altcoin.

What are the three most popular cryptocurrencies?

Here are the top three cryptocurrencies by market capitalisation as of April 2024:

1. 1. Bitcoin (BTC): The original cryptocurrency, Bitcoin continues to hold its position as the market leader. Its widespread acceptance and status as digital gold make it a cornerstone of the crypto market.
   2. Ethereum (ETH): Ethereum has firmly established itself as the second most popular cryptocurrency, thanks to its versatile platform that enables decentralised applications (DApps) and smart contracts.Its ongoing developments and widespread use for DeFi and NFTs contribute to its strong position.
   3. Tether (USDT): Tether stands out as the most popular stablecoin, pegged to the US dollar to maintain a consistent value of US$1. With a market capitalisation of over US$100 billion, it’s a favourite among investors looking for stability in the often volatile crypto market. Its primary use is to provide a stable currency for trading and hedging in the crypto space.

These cryptocurrencies represent the forefront of the digital asset world, each with unique attributes that cater to different needs and preferences within the market. Whether you’re looking for a store of value, a platform for innovation, or stability, these top three cryptocurrencies offer something for every investor.

Why is bitcoin valuable?

Part of what makes bitcoin so valuable is its scarcity. Bitcoin’s maximum supply is limited to 21 million coins. Currently, there are 19 million coins in circulation.

To create supply, bitcoin rewards crypto miners with a set bitcoin amount. (To be exact, 3.125 BTC is issued when a miner has successfully mined a single block.). To keep the process in check, the rewards given for mining bitcoin are cut in half almost every four years.

Will crypto explode in 2024?

The future performance of cryptocurrencies is uncertain and depends on various factors, including the recent regulatory uncertainty surrounding the crypto space, as well as the unstable economic climate characterised by high levels of inflation and rising interest rates.

While some investors are optimistic about the potential growth of the crypto market despite these challenges, others may be more cautious or sceptical. It’s important to note that the performance of cryptocurrencies is generally volatile and unpredictable, and is often significantly impacted by external factors beyond the digital asset space. It is essential for anyone interested in this space to conduct thorough research and, if necessary, consult with a financial advisor before making any investment decisions.

What are the top 10 cryptocurrencies in the world?

As of July 2024, the top 10 cryptocurrencies by market capitalisation are: 

1. Bitcoin (BTC)
2. Ethereum (ETH)
3. Tether (USDT)
4. Binance Coin (BNB)
5. Solana (SOL)
6. U.S. Dollar Coin (USDC)
7. XRP
8. Toncoin (TON)
9. Dogecoin (DOGE)
10. Cardano (ADA). 

However, it’s important to note that the cryptocurrency market is highly volatile, and rankings can change rapidly. Up to date rankings can be found at CoinMarketCap.

What is the best cheap crypto to buy?

There’s no definitive “best” cheap cryptocurrency to buy, as the potential for growth and risk varies greatly among lower-priced coins. Some investors look at projects with strong fundamentals, active development teams and real-world use cases, even if their current price is low. However, it’s crucial to understand that the price of the coin doesn’t reflect the valuation of the project as a whole, as some cryptocurrencies have a huge number of coins in circulation, giving them a high valuation despite the coins being comparatively cheap. 

Instead of focusing solely on price, consider factors such as the project’s technology, adoption rate and long-term viability. Always conduct thorough research and consider consulting with a financial advisor before deciding to invest.

What is the best crypto wallet?

Finding the perfect crypto wallet can be a bit tricky, as the best one for you will depend on your specific needs and preferences. Crypto wallets come in different types, such as hardware and software wallets, each with its own pros and cons. Don’t forget to consider factors like security, ease of use, and compatibility with various cryptocurrencies when selecting a wallet. To help you make an informed decision, we recommend reading our crypto wallet review of the Best Crypto Wallets for Australians.

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