Cryptocurrencies are becoming a new normal for financial institutions. It’s more than a trillion-dollar industry. Multiples companies have joined hands with these virtual currencies, and it’s part of our everyday new conversation.
This year, the king of Bitcoin has been shadowed by altcoins. This perfectly makes sense when we look at their returns for the year 2021. Bitcoin rose by 60% while altcoins rose by 11000% and 12000%. Altcoins managed to make a three-fold return this year as well.
Moreover, with each increasing day, the virtual currency market is adding new coins. These new coins normally add up to cope with the existing challenged or minimize the potential gaps of previous coins in the market.
We have gathered a list some known coins in the crypto market. Moreover, we have discussed different aspects of these coins individually.
There are hundred of cryptocurrencies in the market. We have gathered some popular coins which you need to familiar with, or at least which remains the part of most of the news. If you have specific questions about Crypto Tax, check out our Crypto Tax FAQ.
Analyzing the crypto market is a bit hard. More specifically, preferring one coin over another is hard. It mostly depends upon the subjective needs of any consumer.
For example, if an investor wants to invest in a crypto coin, he will probably make some fundamental analysis and will use some consumer trends as well. Using this method, he can prefer one cryptocurrency over another.
Our methodology is a bit different. We have gathered a list of all virtual currencies with the most market capitalization presently. Using this standard metric, we can at least assume which currencies are mostly preferred by consumers for long-term investments.
|Binance Coin||BNB||Ethereum Blockchain|
|USD Coin||USDC||Ethereum Blockchain|
Created by an unknown person (Satoshi) in 2009, Bitcoin has still been the king of the crypto market. Followed by effective blockchain technology, it offers a promise of the secure transaction by using cryptography.
Bitcoin has been associated with many risks as well. A sharp increase in prices since 2019 has made more insecure as well. From almost $8000 to $68000, the market has gotten speculative eyes. Some referred is as a bubble as well.
Moreover, other risks associated with this coin are related to govt. regulations, security, and a huge presence of altcoins in the market.
Ethereum is the second most popular cryptocurrency in the market. Like Bitcoin, ETH also uses blockchain technology to be secure for safe transactions across the world. Moreover, in recent times, it transitioned to proof-of-stake protocol.
ETH has also been mentioned and compared with Bitcoin several times before. There are huge debates about comparing both coins.
Several large financial institutions considered ETH the most reliable cryptocurrency as well. However, some consider altcoin as a preference over ETH as well.
Tether is also blockchain cryptocurrency and categorized into the stable coins. Normally, the crypto market remains in great fluctuations. The market constantly see a great risk of moving upside and down.
However, these stable coins (Tether) normally are backed by U.S dollars which makes it stable at the price of $1.
It is used by crypto traders as a medium of exchange as well. Tether offers them the stability in the volatile market of crypto.
Binance Coin (BNB)
Binance coin is a cryptocurrency offered by the Binance exchange itself. With its exchange being the most popular among crypto traders, its coin is no different. The latest market-cap makes it one of the most popular cryptos as well.
To minimize the supply in the market, Binance has been burning its coins lately. So, the supply keeps on decreasing. For example, the supply for BNB coin has decreased from 170,532,825 to 169,432,937.
USD Coin (USDC)
USD is also one of the stable coins to fight fluctuating crypto market. The coins maintain a stability with the U.S dollar prices and is largely used as a medium of exchange for crypto trading.
While it offers stability in the market, mostly this coin is not preferred for market trading to make any gains. Some people also use it as a hedge to fight against inflation.
Released in 2012, Ripple is a digital payment network and remittance system. Ripple is identified with the symbol XRP, and its main purpose comes with being intermediate between the networks.
Other than Blockchain mining, Ripple uses different groups of bank serves to legalize and proceed with a transaction.
In recent times, most cryptocurrencies like Bitcoins were considered as being associated with consuming a lot of energy. However, Ripple is different. It consumes very little energy and seconds for a transaction to proceed. As mentioned before, it ranks as one of the top coins in terms of market capitalization.
Terra is considered one of the many stable coins in the destabilized crypto market. The market remains mostly in a great fluctuation. Some coins get an increase and drop by almost 5000% as well.
In these uncertainties, Terra jumps in to provide a stable ground for your crypto assets. It’s also fascinating that like Luna, Terra is also an algorithmic-backed stable coin in the market.
It also measures different fiat currencies in the market and offers some stability. It uses supply and demand variables to control stability in the market.
With Solana being considered as one of the top coins in terms of market capitalization, it is designed in a way that makes it capable of hosting different scalable applications.
People often compare this coin with Ethereum (ETH). However, Solana has been able to do more per second than his competitors with less transactional fee. Solana is reported to use proof-of-stake and proof of history technology.
Cardano is considered one of the popular cryptocurrencies in the market. Investors, innovators, blockchain enthusiasts can’t complete their conversations without mentioning its name.
The coin has a goal to become a decentralized development platform. It also aims to develop its technology using multi-ledger and verified contracts.
Cardano runs on the Proof-of-stake Ouroboros consensus protocol and is largely symbolized as ‘ADA’. Moreover, it’s assumed to be built in five stages:
3) Smart Contracts
Being titled as one of the popular cryptocurrencies, the Avalanche blockchain platform is associated with a native currency called AVAX. It’s also considered as one of the competitors to different cryptocurrencies which promise to offer scalability and efficient transactional fees. Its rates are determined by using governance models.
Other Popular Coins Are As Follows
Looking for a Cryptocurrency Accountant?
With cryptocurrency still being a new system under scrutiny by the IRS, it’s important to work with a CPA who is monitoring the industry and knows the ins and outs of cryptocurrency accounting.
Our in-house cryptocurrency accounting experts are here to help you navigate these investments. See Cryptocurrency Tax and Accounting Services for details.