The market for digital currencies has exploded in recent years. From bitcoin to Ethereum, there are now more than 1000 different digital currencies available for trading. To invest in these digital currencies, you need to buy them. There are several ways to do this – commonly referred to as ‘getting exposure’ in the world of investments. You can buy shares directly from the company or via a broker, or you can buy other assets like ETFs (exchange-traded funds) that track the performance of a particular digital currency. Here we look at some of the most popular currencies for trading.
Bitcoin: The King of digital Currencies
The original and most well-known digital currency is bitcoin. Bitcoin was the first decentralized cryptocurrency, which means it’s not regulated by a centralized government. Bitcoin is well established with the largest market cap in the world. It has been around since 2008 and has seen success in terms of awareness, acceptance, and price appreciation. This is primarily because bitcoin had a head start on many other currencies, including Ethereum and litecoin. Bitcoin also has more widespread international recognition than its competitors, which can be attributed to it being the first mainstream digital currency. As an investor, one way to gain exposure to bitcoin is by buying shares in an exchange traded fund (ETF) that tracks the performance of bitcoin – such as GBTC (Bitcoin Investment Trust). There are also futures contracts available for trading on CME Group that are based on bitcoins.
Ethereum: the most valuable digital currency.
Ethereum is the most popular cryptocurrency, as of May 6th, 2017. This is mainly because it has a huge support base and is backed by big players in the industry. Ethereum has also developed a very successful platform that many other cryptocurrencies use to build their cryptocurrency. There are more than 1000 different cryptocurrencies available and Ethereum (ETH) has been the most successful of them all. It was first launched in 2015 and was worth less than $10 at the time. All ETH coins were sold to investors for just pennies each, but today one ETH can be worth over $400!
Litecoin: Ranked 5th by market cap
Litecoin is the younger sibling of bitcoin. The two currencies share some key traits, such as the use of blockchain technology and a coin limit. However, there are also some key differences between them. The Litecoin blocks are generated four times faster than those of bitcoin – 2.5 minutes to create a block of transaction data instead of 10 minutes for bitcoin. This means that it offers more frequent rewards for miners who help verify transactions on the network. It’s also cheaper to send Litecoin than Bitcoin as it doesn’t require high-powered computers to generate new coins (the process is called ‘mining’). Litecoin was created by former Google employee Charlie Lee in 2011 and is based on an open source global payment network (the same one that Bitcoin uses). The main goal behind the currency was to improve on bitcoin’s shortcomings without breaking its core principles.
Ripple is a digital currency that has grown in popularity due to its low transaction fees, quick settlement times, and advanced payment features. The Ripple XRP coin is used by companies such as UniCredit, UBS, and Santander. Ripple was founded in 2012 and aims to provide the world with a fast and inexpensive way to transfer money. As of January 2018, it had a market capitalization of $20 billion.
Bitcoin Cash and Bitcoin SV
Bitcoin Cash and Bitcoin SV are two new forks of the original bitcoin blockchain. Bitcoin Cash was created in August 2017 by a group of developers who wanted to increase the block size limit of bitcoin to lower transaction fees. Bitcoin SV is a fork of Bitcoin Cash that has been promoted by Craig Wright as the true bitcoin and claims to offer bigger blocks, faster speeds, and more protection from centralization than Bitcoin Cash.
Dash is a digital currency that focuses on privacy and speed. Dash offers instant transactions, double-spend protection, private transactions, and a decentralized governance system.
The world of cryptocurrency is a complex one, with endless different options. For those who want to get started with trading, choosing a currency is a big decision. There are many different factors to consider, such as the currency’s liquidity, how it’s traded, and how stable it is.