Cryptocurrency is a digital money that is not managed by a central system such as a government. Instead, it is based on blockchain technology, with Bitcoin being the most popular. As digital money continues to gain traction on Wall Street, more and more options are becoming available. There are currently more than 5,000 cryptocurrencies on the market, and each one has its own unique characteristics and potential.
Polkadot (DOT) and Bitcoin Cash (BCH) are two of the most popular cryptocurrencies. Polkadot is a blockchain-based token that has a different purpose than money, such as representing a stake in a blockchain project or defi. Bitcoin Cash holds an important place in the history of altcoins because it is one of the first and most successful hard forks of the original Bitcoin. Dogecoin, which was created as a joke coin based on a meme, rose to fame when Tesla CEO Elon Musk promoted the token on social media.
Other major coins include Ripple (XRP), Solana, USD Coin and Tezos. Bitcoin Gold and Bitcoin SV are two other bitcoin forks that have gained some traction in recent years. When it comes to choosing which cryptocurrency to buy, it's important to consider your risk tolerance and investment goals. Bitcoin is the granddaddy of cryptocurrencies, the world's first digital currency and still the leader by market capitalisation.
It may not sound exciting, but Bitcoin has already survived several market crashes and is likely to survive future crashes as well. Moreover, Bitcoin's price already influences the prices of smaller cryptocurrencies, making it a solid first buy for those who are risk-averse or new to investing in digital currencies. Ethereum adds more risk with more upside potential than Bitcoin, while larger altcoins like Cardano or Solana (or smaller ones like Polygon or Cosmos) offer a high-risk, high-reward option for risk-tolerant investors. Stablecoins also offer an attractive option for those who want to benefit from high interest rates without taking on too much risk.
In general, smaller market cap cryptocurrencies are more volatile than larger, more established cryptocurrencies such as Bitcoin and Ethereum.