Recently, the cryptocurrency market has exploded, with several coins offering multi-year FD (Fixed Deposits) returns within hours. It can appear like you missed the bus from the rally. But wait, perhaps there are still some cryptocurrencies that could provide enormous gains. Discover those crypto assets now.
An overview of cryptocurrencies
Cryptocurrencies are digital money that resembles the Dollar or the Indian Rupee more. These currencies can be used for a variety of purposes, such as a store of value, a means of exchange, a trading system, etc. Thousands of cryptocurrencies exist today, but Bitcoin launched it in 2009. Right after the 2008 global financial crisis, Satoshi Nakamoto, a mysterious person or group of people, invented Bitcoin.
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The main goal of cryptocurrencies was to have a distinct financial system independent of the established banking system. A form of decentralised network, Blockchain technology provides the foundation for Bitcoin and other cryptocurrencies. By using an internet connection, anyone can access the blockchain network. The networked data, however, cannot be altered or edited by anyone. Because of this, the technology is very safe and secure.
Underlying factor driving cryptocurrency price growth
There are many ifs and buts in the cryptocurrency equation because the notion is still in the adoption stage. Even though the technology is only a decade old, it already has a large number of practical applications. The blockchain network is already being implemented by numerous organisations, who have also integrated this technology into their operations.
The principle of supply and demand is the primary driver of the increase in cryptocurrency prices. Let’s use Bitcoin, the biggest cryptocurrency, as an example. Only 21 million Bitcoins can be mined in total, and more than 83% of those have already been done so. It is highly precious because of its scarcity.
Cryptocurrencies with a huge potential for growth
The top 3 cryptocurrencies with the most future upside potential are listed below.
Ethereum (ETH) (ETH)
In terms of market capitalization, the second-largest cryptocurrency behind Bitcoin. Vitalik Buterin introduced Ethereum on July 30, 2015. Unlike Bitcoin, Ethereum operates on a special system called Proof of Stake. When comparing transaction speeds, Ethereum is also quicker than Bitcoin. The currency is now considerably more useful as a result.
Because it is utilised in the NFT (Non-Fungible Token) arena, Ethereum has a greater use case. In addition to this, Ethereum’s network underwent a London upgrade in August. Following this, the token’s supply has been steadily shrinking, which has driven up the price. Another element that will cause a new crypto coin rally is the increase in the trend of NFTs. The value of the coin has increased by almost 21% since the beginning of October and by more than 395% since the year 2021 began.
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Cardano (ADA) (ADA)
Is a relatively new coin that Charles Hoskinson, a co-founder of Ethereum, created in 2017. Cardano has an advantage over Ethereum since it uses less energy. As a result, less computing gear is needed. It supports smart contracts like Ethereum and operates on a “proof of work” system. Since it has all of ETH’s necessary qualities and is superior to it in some ways, it is also known as the “Ethereum killer.” Since the start of the year, the coin has delivered an astounding return of more than 1077%, outperforming Ethereum by a wide margin. The potential for growth and adoption is very great because the coin is new.
Bitcoin (BTC) (BTC)
Doesn’t need to be introduced since it is the most widely used and largest coin available. If the idea of cryptocurrencies is successful, Bitcoin will be one of the main winners. Despite making enormous gains over the past ten years, Bitcoin still has a long way to go. The rising rate of international adoption is one of the elements that could set it off.
The US is in discussions to introduce Bitcoin futures and ETFs, which will multiply demand for the cryptocurrency. Bitcoin is accepted and invested in by multibillion dollar businesses like Tesla, Space X, and institutional investors.
In the immediate term, this should be quite optimistic for bitcoin. Although Bitcoin’s Year-to-Date return is only 114%, it has produced more than 51% in the past month. Going forward, Bitcoin will continue to be the most dependable and dominant player in the digital currency market. As a result, Bitcoin is open to wagers from all types of investors.
In addition to the three cryptocurrencies mentioned above, Ripple (XRP) and Litecoin (LTC) are two additional coins that may experience a boom in the near future. The fact that all of the coins mentioned have practical use makes them so precious. In addition to these, there are a few dangerous and extremely speculative coins like Dogecoin and Shiba Inu. These can be a choice for investors or traders who take severe risks. Amazingly, Dogecoin has returned 4680% so far this year. These coins are highly speculative investments mainly because they are sentiment-driven.
Serious investors can only invest a small amount of money in such high-risk cryptocurrencies for the profits. For safety and diversification, remaining investors might stick to the top 5 cryptocurrencies.