From the moment Bitcoin appeared on the scene, it inspired others to launch cryptocurrencies. There are now more than five thousand, and those wanting to diversify their digital portfolio might choose to hold other altcoins in addition to Bitcoin.
It used to be the case that Altcoins were simply a jacked-up version of Bitcoin – generally tracking similarly but with more volatility, so presenting the possibility of bigger gains but also of more devastating losses. That’s still the case with some altcoins, but the market has become more nuanced. The introduction of stablecoins brings a whole new angle, too.
Here we take a closer look at the five most popular altcoins in 2023.
Ethereum (ETH) – the Hertz of altcoins
Hertz, the car rental company, used to make a virtue of being second to Avis with the tagline “we try harder.” Ethereum has taken a similar posture in the crypto market. For years, it has been the second biggest cryptocurrency in terms of market cap – today is stands at $215 billion, behind Bitcoin at $670 billion but well ahead of third placed Tether at $85 billion.
Ethereum tends to follow the standard behavior of cryptocurrencies in tracking approximately with Bitcoin but with more volatility. However, its architecture means it is more scalable than Bitcoin, so for those looking to the long term, it has more potential.
Tether (USDT) – top stablecoin hitting the mainstream at payment gateways
You can’t turn around without somebody talking about stablecoins these days. Although they have been around for almost 10 years, it is Tether that has brought them into the public consciousness. The idea is that by pegging the value to some stable asset – typically USD as is the case here, users can take advantage of the benefits of crypto without being exposed to the volatility risk.
What benefits do we mean? Well, crypto transactions are fast – almost instantaneous, they are highly secure and you can preserve your anonymity. In other words, we are talking here about using crypto for payments. Stablecoins like Tether are making everyday crypto transactions less risky and payment gateways like UniPayment offer USDT payments alongside the likes of Bitcoin and Ethereum as a matter of course.
Binance Coin (BNB) buys back coins to keep the market buoyant
Trading platform Binance launched its native coin, BNB, in 2017. Binance issued 200 million BNB coins, but every now and then, the platform periodically buys back and destroys some of them, thereby increasing the value.
This has gone some way to mitigating volatility, and while it has not been as stable as stablecoins, it has proved less volatile that Bitcoin and Ethereum over the past year.
Ripple (XRP) is popular for global transfers
XRP is the cryptocurrency and Ripple is the platform on which transactions are made, but the terms are often used interchangeably.
Making a transaction through Ripple incurs a very small fee, making it a cost-effective, fast and secure mechanism for cross-border transactions. A landmark legal ruling earlier this year that XRP should not be classified as a security could open the floodgates to more businesses and even banks using it for cross-border payments and the value of the coin increased by 75 percent in the wake of the decision.
Dogecoin (DOGE) – who’s laughing now?
The world’s first meme coin was launched as a joke, poking fun at the wild crypto speculation that was going on at the time. But at some point, the furry-faced digital asset with its unlimited supply started to be taken seriously.
A large part of that transformation was down to Elon Musk’s outspoken support. In fact, he made some off the cuff comments about buying Teslas with Dogecoin, and that was enough to send the price into the stratosphere.
Last week, he did it again. Musk’s comments about X having its own coin by the end of the` year were enough to have Dogecoin fans adding two and two to get 17, and to send Dogecoin on another upward trajectory.
