Investing in multiple currencies — Top 10 market caps
Tags: Palettes, Cryptocurrency Investment, Top Ten, Bitcoin, Cryptocurrency

The past 12 months have witnessed some spectacular movements in the Cryptocurrency Markets. Currencies appreciated ten times and then corrected by over five times, all in a span of 12 months. Supported by blockchain technology, crypto has seen a great increase in awareness, research, regulation and acceptance. And that is why even with its volatility, many people agree that crypto markets are arguably one of the best places to put your investments — as seen in the overall crypto marketcap of over $300Billion. The two year market bull-trend provided good insight on how we should be tackling this market, to secure returns whilst minimizing risk. One of the most logical lessons learnt is that of diversifying your investment portfolio.

It is a fundamental economic and investment rule to spread capital across investments with different levels of risk in order to build a balanced portfolio. In this way, if you generate significant losses from higher-risk investments, you can balance with investments that carry smaller returns but also less risk. One of ways to do this in the crypto trading is by investing in multiple currencies at the same time. But deciding which cryptocurrency is good for investment and which is not, is not an easy task.

Investopedia reported on investing in large-cap companies or stocks. These stocks are considered more stable, therefore a correction in the market is often smaller than others.

If we apply this to the cryptocurrency investing, apart from the largest and most traded cryptocurrency, Bitcoin, there is a range of markets that are considered high-caps with large volumes of trading.

Top Ten crypto basket

If we were to look at a basket of the Top Ten by market capitilization(data from Coinbase) which can be a part of your top 10 crypto basket.

Bitcoin (BTC)

Bitcoin is the oldest and most traded cryptocurrencies. The whitepaper was written by Satoshi Nakamoto, an anonymous person or persons in 2008. With a 45% market share and market cap of $126 billion, it is trading at $7348.

2. Ethereum (ETH)

Ethereum is the second largest cryptocurrency. A platform that allows developers to build Decentralized apps (dApps) and technologies. With each new innovation on the platform, increases the adoption rate of Ethereum and hence creating a network effect, increasing its value. It grew by about 3000% in 2017.

As of 20th July 2018, Ethereum has a market cap of $47 billion and is trading at $466

3. Ripple (XRP)

Ripple is a real-time global settlement network that uses blockchain technology to make instant, secure and low-cost cross-border payments. It was one of the best performing cryptocurrencies of 2017 with a growth of over 36,000%.

Large financial institutions like American Express, JP Morgan and Santander are already using Ripple’s technology. Also, Ripple has been working with the Saudi Arabia Central Bank, China’s LianLian International and other banks from around the world.

As of 20th July 2018, Ripple has a market cap of $18 billion and is trading at $0.46.

4. Bitcoin Cash (BCH)

Bitcoin Cash is a fork of Bitcoin, supported by the largest Bitcoin mining company as well as the manufacturer of Bitcoin mining chips (ASICs) — Bitmain. Although it has only existed for less than a year, Bitcoin Cash has surged to number four in terms of market capitilization.

A fork occurs when a group of developers decide they don’t like the direction of the current roadmap and take the existing code and add their own improvements to it. This results in creation of another version of the previous blockchain, branching with its own roadmap.

Bitcoin Cash was created mainly because Bitmain didn’t like a feature called SegWit that Bitcoin recently implemented. SegWit allows for cheaper transactions and prefers bigger mining blocks (8MB vs 1MB for Bitcoin) as a solution to Bitcoin’s increasing scalability problem.

As of 20th July 2018, Bitcoin Cash has a market cap of $13.7 billion and is trading at $799.

5. EOS (EOS)

EOS uses a “Delegated Proof of Stake” (DPOS) system, which is an improved version of the regular PoS system because users can delegate their voting rights to others in the network, so that transaction verification times are significantly decreased and the network runs more efficiently. Additionally in EOS, agreement of a supermajority of users can also roll back changes to fix serious bugs.

As on 20th July, 2018, EOS has a market cap of $ 7.4 Billion and is trading at $8.5

6. Stellar (XLM)

Stellar Lumens is blockchain based, open-source distributed payments infrastructure for moving money across borders quickly, reliably, and cheaply. It differentiates from Ripple as it links to fiat currencies and allows for nearly instant exchange without any visible exchange of cryptocurrency anywhere.

Key points that make XLM attractive

IBM has partnered with Stellar to enable banks to complete instant cross-border transactions with each other, where transaction settlement will be done on the Stellar network. The partnership of Stellar Development Foundation with the secure communications platform Keybase. Stellar Lightning Network which is an off-chain payment processing setup that allows parties to interact via smart contract without directly transacting through the blockchain. This allows exchange of multiple transactions before Lightning needs to verify on the main network. This allows Stellar to handle far more activities and addresses the a key issue of scalability in blockchain projects XLM has a high chance of being added to Coinbase, as per their recent announcement.

As on 20th July, 2018, Stellar has a market cap of $5 Billion and is trading at $0.29

7. Litecoin (LTC)

Created in 2011 to improve upon Bitcoin’s technology, Litecoin is currently the 7th largest cryptocurrency. It is based on an open source decentralized global payment network that uses “scrypt” as a proof of work, which can be decoded with the help of consumer grade CPUs.

With a growth of almost 8000% in 2017, the price of Litecoin followed the general market trend, and grew from around $4 at the beginning of 2017 to a high of $358 in December 2017 and dropped to $110 in February 2018. Litecoin was a fork of Bitcoin, although like Bitcoin in many ways, it has a faster block generation rate and hence offers a faster transaction confirmation. It completes a transaction four times faster than Bitcoin and is capped at 84 million coins — four times more than the coin supply of Bitcoin.

With a market cap of $4.5 billion, Litecoin is trading around $85 as on 20th July, 2018.

8. Cardano (ADA)

Developed as a research project, Cardano is an open source and decentralized public blockchain that aims to create a platform for decentralized apps and smart contracts that can be processed with formal verification, which allows mathematical proof of the correctness of code. Its Proof of Stake consensus is peer reviewed and would probably define a new standard of consensus that other coins would follow.

Coinbase has also mentioned that it will be possibly listing Cardano soon.

With a market cap of $4.66 billion, Litecoin is trading around $0.18 as on 20th July, 2018.

9. Iota (MIOTA)

IOTA is a cryptocurrency technology made to target the Internet of Things (IoT) and doesn’t use a blockchain in order to reduce the computational needs of the network and eliminate transaction fees. IOTA aims to create an infrastructure that allows and enables machine-to-machine transactions between all the different devices connected via the Internet.

IOTA’s ledger technology, Tangle requires the Sender in a transaction to do a proof of work that approves two transactions. By eliminating the need for dedicated mining the system become more decentralized .

Opposite to other cryptocurrencies, that tend to become slower with increased usage, IOTA becomes faster with more users, as there are more users to verify other transactions.

With a market cap of $4.66 billion, Litecoin is trading around $0.18 as on 20th July, 2018.

10. Tether (USDT)

Tether is a cryptocurrency whose value in that its value is linked to the U.S. dollar. That means it allows people to store their USD in a cryptocurrency, that is much more stable as compared to the cryptocurrencies. However, you cannot convert Tether coins to USD directly, but instead to other currencies on online exchanges.

In a bearish market, when other cryptocurrencies are going down, Tether remains relatively stable due to being pegged to the USD and is a great proposition to store money in Tether. Similarly, when the market is showing signs of recovery, Tether coins can be converted into other cryptocurrencies again and traded.

Tether claims the coins are backed by USD reserves in a 1:1 ratio and its holdings are published daily and frequently audited.

Tether has a market cap of $2.7 billion, trading around $0.99 as on 20th July, 2018.