As of November 2024, the global cryptocurrency market stood at $2.41 trillion. As a result, this has captured the attention of a rapidly growing audience. With this surge in popularity, you may be left wondering: which cryptocurrency offers the best investment potential?
Cryptocurrencies are digital or virtual currencies that use cryptography for security and decentralization. Use this expert guide to find out all that you need to know to enjoy the potential rewards of the market.
Key Takeaways
- Cryptocurrencies are digital assets that are not controlled by a central authority and use blockchain technology for security.
- Market capitalization, trading volume, technology, team, and risk tolerance are key factors to consider when investing in crypto.
- Popular cryptocurrencies include Bitcoin, Ethereum, Tether, Binance Coin, and Cardano.
- Diversification and due diligence are essential. Investing in a variety of cryptocurrencies and conducting thorough research can help mitigate risks.
- Security and tax implications are crucial so using secure wallets and understanding tax laws are essential for responsible cryptocurrency investing.
Top Performing Cryptocurrencies in 2024
Source: Bankrate
With a combined market capitalization exceeding $6 billion, the top-performing cryptocurrencies of 2024 offer both growth potential and adaptability to evolving market trends.
These assets stand out not only for their value and market presence but also for their strategic use cases, appealing to both short-term investors seeking high liquidity and those committed to long-term holding for sustained value.
While some, like Bitcoin and Solana, have established themselves as solid options for long-term holding due to their pioneering technologies and strong use cases, others, like Shiba Inu and Dogecoin, may present short-term trading potential given their meme-driven popularity and community support.
Below is an overview of some of the best crypto options to invest in:
Toncoin (TON)
Market cap: $13.61 billion
Toncoin was developed by Telegram, a company that offers an encrypted messaging platform, in 2018. Telegram eventually abandoned the project and it was taken over by the TON Foundation.
Toncoin’s primary appeal lies in its integration with Telegram’s vast user base, positioning it as a promising option for mainstream adoption and innovative decentralized applications (dApps). The TON blockchain aims to support decentralized services like DNS, secure file storage, and payment solutions directly within Telegram, giving it a solid use case and high potential for ecosystem growth.
Toncoin could see significant gains in the short term, particularly if Telegram expands its integration of blockchain-based services, which would likely drive demand. It also has potential as a long-term hold due to the strength of its ecosystem and the TON Foundation’s commitment to ongoing development. The continued expansion of dApps and infrastructure on the TON blockchain could lead to substantial growth over time.
BNB (BNB)
Market cap: $79.46 billion
BNB is the cryptocurrency issued by Binance, which is one of the largest crypto exchanges. BNB was created as a token to pay for discounted trades, but Binance Coin can now be used for payments, as well as purchasing various goods and services.
The main appeal of BNB lies in its strong association with the Binance ecosystem, which includes a range of services, from trading and staking to DeFi applications. This widespread utility gives BNB a solid foundation in the market and continuous demand from Binance’s extensive user base.
BNB is attractive for both short-term and long-term investors. Short-term gains may arise from Binance’s regular token burns, which reduce BNB’s supply and support price growth. Long-term, BNB holds potential due to Binance’s ongoing growth and commitment to expanding its ecosystem, making BNB a solid option for sustained value.
Shiba Inu (SHIB)
Market cap: $9.81 billion
Shiba Inu is an Ethereum-based cryptocurrency and popular meme coin, created in 2020 by a founder called Ryoshi. Shiba Inu, despite its fluffy mascot and meme notoriety, has some serious money behind it and sits in the top 15 cryptocurrencies ranked by market cap.
SHIB is popular as a short-term hold due to its volatility, which can yield quick gains. However, it also has potential as a speculative long-term investment if its ecosystem developments drive increased utility and adoption over time.
Bitcoin (BTC)
Market cap: $1.21 trillion
As the granddaddy of them all, Bitcoin is often the token people reference when they talk about crypto. Bitcoin has a mysterious creator — allegedly Satoshi Nakamoto — who introduced the currency in 2009.
Bitcoin’s primary appeal lies in its reputation as “digital gold,” making it a popular store of value and hedge against inflation. Its limited supply of 21 million coins adds to its scarcity, supporting long-term value retention and making it a reliable asset in uncertain economic times.
While Bitcoin can be volatile, it is a strong choice for long-term holding due to its track record and dominant market position. Short-term investors can also benefit from periodic price surges, but Bitcoin’s long-term potential as a store of value makes it particularly appealing for sustained investment.
Solana (SOL)
Market cap: $68.66 billion
Solana is a newer cryptocurrency that was created in 2019 by Anatoly Yakovenko. The platform is known for its ability to power smart contracts, decentralized finance apps, NFTs, and more.
Solana is well-suited for both short-term and long-term investors. In the short term, its rapid adoption and ecosystem expansion offer significant growth potential. For long-term investors, Solana’s scalability and ongoing developments make it a promising hold as demand for decentralized applications continues to grow.
TRON (TRX)
Market cap: $13.37 billion
TRON, established in 2017, is a decentralized blockchain for creating applications. Its native token is TRX. The Tron Foundation acquired the well-known peer-to-peer network BitTorrent in 2018.
TRON’s appeal lies in its focus on decentralizing the internet and promoting digital content sharing, which has led to a robust and active community. The BitTorrent acquisition adds to its long-term value, offering a unique synergy between content distribution and blockchain technology.
TRON is also appealing as a long-term hold due to its expanding ecosystem and ongoing developments in decentralized content sharing. Short-term investors may also find opportunities in TRX’s market fluctuations, but its sustained value is largely tied to the growth of its dApp and content distribution platforms.
Bitcoin Cash (BCH)
Market cap: $6.29 billion
Bitcoin Cash was created to restore the decentralized nature of Bitcoin. The crypto formed after the Bitcoin blockchain forked in 2017, which is when the original blockchain diverged into two separate paths. The coin was created to handle more transactions at once, which reduces fees and speeds up how fast a transaction takes place.
BCH presents value for long-term investors due to its established network, continued development, and focus on practical payment solutions. Short-term traders may also benefit from its price movements, but its fundamental value stems from its utility as a payment network and its ongoing improvements in scalability and adoption.
Dogecoin (DOGE)
Market cap: $15.43 billion
Dogecoin takes its name from a Shiba Inu meme and was created by software engineers Jackson Palmer and Billy Markus in 2013 to basically poke fun at the quick rise in Bitcoin prices. Dogecoin has an unlimited number of coins and can be used for payments or sending money.
This coin is particularly attractive for short-term investors, as its price can be highly volatile and influenced by social media trends and celebrity endorsements. However, its long-term prospects remain uncertain due to its unlimited supply, making it less appealing as a store of value compared to other cryptocurrencies. Nonetheless, it could still serve as a speculative investment for those willing to embrace its unique community-driven nature.
“Diversification is key in the cryptocurrency market. Spreading your investments across different projects helps you to mitigate risks and potentially maximize returns.”
Additional Crypto Investment Options
Ethereum (ETH)
Market cap: $298.41 billion
Ethereum is a decentralized platform that enables developers to build and deploy decentralized applications (dApps). It’s the second-largest cryptocurrency by market capitalization and has a wide range of use cases, including finance, gaming, and supply chain management.
Tether (USDT)
Market cap: $119.71 billion
Tether is a stablecoin pegged to the US dollar. This means that its value is designed to remain stable, unlike other cryptocurrencies that can fluctuate significantly. Tether is often used to facilitate trading and reduce volatility in the cryptocurrency market.
Binance Coin (BNB)
Market cap: $83 billion
Binance Coin is the native token of the Binance exchange, one of the largest cryptocurrency exchanges in the world. BNB offers discounts on trading fees and other benefits on the Binance platform. It also has its own blockchain, known as Binance Smart Chain, which enables the development of dApps.
Cardano (ADA)
Market cap: $11.78 billion
Cardano is a proof-of-stake platform that focuses on sustainability and scalability. It is designed to be more energy-efficient than proof-of-work cryptocurrencies like Bitcoin. Cardano has a growing ecosystem of dApps and is being used for various projects in areas such as finance, supply chain management, and identity verification.
Factors to Consider When Choosing a Cryptocurrency to Invest In
Source: Freepik
Here are some of the factors to consider when choosing the best crypto to invest in:
Market Capitalization
Market capitalization is the total value of all coins in circulation for a particular cryptocurrency. It’s often used as an indicator of a cryptocurrency’s size and stability. For example, a larger market cap generally suggests a more established and less risky investment.
However, it is important to note that market capitalization doesn’t always correlate with a cryptocurrency’s potential for growth.
Trading Volume
Trading volume refers to the amount of cryptocurrency traded in a given period. A higher trading volume indicates more liquidity, meaning it’s easier to buy and sell the cryptocurrency without significantly affecting its price.
For instance, high liquidity is important for you if you may need to quickly sell your holdings.
Technology and Use Case
The underlying technology and potential applications of a cryptocurrency are crucial factors to consider. Innovative projects with real-world use cases may have higher growth potential.
For example, cryptocurrencies like Ethereum and Cardano offer smart contract platforms, enabling the development of decentralized applications (dApps). These dApps can range from decentralized finance (DeFi) protocols to gaming platforms and supply chain management solutions.
“While cryptocurrencies can offer significant returns, they also come with substantial risks. It’s crucial to approach investments with a clear understanding of your risk tolerance and financial goals.”
Team and Development
The experience and reputation of the development team behind a cryptocurrency can significantly impact its success. A well-established team with a proven track record can instill confidence in investors.
Active development and strong community engagement are generally positive signs. Additionally, the development roadmap and the team’s commitment to long-term sustainability are important factors to consider.
Risk Tolerance
Cryptocurrencies are highly volatile, meaning their prices can fluctuate rapidly. It’s essential to assess your risk tolerance before investing. High-risk cryptocurrencies may offer potentially higher returns but also come with greater volatility.
For example, if you are comfortable with risk, you may be more inclined to invest in smaller, less established cryptocurrencies with higher potential upside. However, it is important to diversify your portfolio to mitigate risk.
Regulatory Environment
The regulation for cryptocurrencies varies widely across different jurisdictions. It is of great significance to be aware of the regulatory environment in your country and the potential impact it may have on your investments.
Fees and Tax Implications
Transaction fees can vary significantly between different cryptocurrencies and platforms. Consider the fees associated with buying, selling, and holding your chosen cryptocurrency.
In addition, cryptocurrencies are subject to taxation in many jurisdictions. So it is crucial to understand the tax implications of your cryptocurrency investments and consult with a tax professional.
“The underlying blockchain technology powering cryptocurrencies is a game-changer. Its potential applications extend far beyond finance, into areas like supply chain management, healthcare, and voting systems.”
Additional Considerations
Here are some of the additional considerations for you to choose the best crypto to invest in.
Diversification
Investing in a variety of cryptocurrencies can help reduce risk. Diversifying your portfolio helps you to be less exposed to the volatility of any single cryptocurrency. It is crucial to spread your investments across different sectors and use cases to balance your risk.
Research and Due Diligence
Before investing in any cryptocurrency, you should conduct thorough research and due diligence. This includes understanding the technology behind the cryptocurrency, the team and development roadmap, and the potential use cases. Be wary of hype and avoid investing based solely on price speculation.
Security and Storage
Cryptocurrency wallets are essential for storing your digital assets. There are various types of wallets available, including hot wallets (connected to the internet) and cold wallets (offline). You should choose a secure wallet that suits your needs and take steps to protect your private keys.
Taxes
Cryptocurrency investments are subject to taxation in many jurisdictions. Understanding the tax implications of your cryptocurrency investments is crucial. Consult with a tax professional to determine your specific tax obligations and avoid penalties.
Special Consideration for Expert Traders
Expert traders in the cryptocurrency market may consider additional insights when looking for the best crypto to invest in. Here are some of them:
- Fundamental Analysis: Expert traders often consider the underlying technology, team, and use cases of cryptocurrencies. They assess the project’s long-term potential and its ability to deliver on its promises.
- Technical Analysis: Technical analysis involves studying price charts and patterns to identify potential trading opportunities. Expert traders use various indicators and tools to analyze market trends and make informed decisions.
- Risk Management: Experienced traders prioritize risk management. They implement strategies like stop-loss orders and position sizing to protect their capital and limit losses.
- Market Sentiment: Market sentiment can be crucial in the cryptocurrency market. Expert traders monitor news, social media, and other indicators to gauge investor sentiment and anticipate potential price movements.
- Long-Term Perspective: While short-term trading can be profitable, many expert traders focus on the long-term potential of cryptocurrencies. They believe that the underlying technology and real-world applications will drive value over time.
So What is the Best Crypto to Invest In?
There is no single “best” crypto to invest in. All investments involve risk, and cryptocurrencies are particularly volatile. While some cryptocurrencies may have a stronger track record or be backed by established institutions, there’s no guarantee of future performance.
FAQs
What is the safest cryptocurrency to invest in?
There is no single “safest” cryptocurrency. All investments involve risk, and cryptocurrencies are particularly volatile. While some cryptocurrencies may have a stronger track record or be backed by established institutions, there’s no guarantee of future performance.
How do I choose the right cryptocurrency for me?
Choosing the right cryptocurrency depends on your individual risk tolerance, investment goals, and level of knowledge.
Is it too late to invest in cryptocurrency?
It’s never too late to start investing in cryptocurrency. While the market has experienced significant growth in recent years, there is still potential for future appreciation. However, the earlier you start, the more time your investments have to grow.
How can I protect my cryptocurrency investments?
Protecting your cryptocurrency investments is crucial. You should be cautious of scams, use secure wallets, enable two-factor authentication, and stay informed.
