Cryptocurrencies are becoming increasingly popular among the masses. People are actively looking for the best cryptocurrencies to invest in for high profit. One of the main reasons for the popularity of cryptocurrencies as an option for investment is their decentralised nature and potential for high returns.One thing that investors need to keep in mind is that the price of these cryptocurrencies tend to fluctuate everyday.
Unlike traditional currencies, cryptocurrencies are not backed by the government or physical assets. Instead, they are based on complex mathematical algorithms by a decentralised network of computers. But before heading towards the best cryptocurrencies to invest in, let us look at what cryptocurrency is and how it works.
What is Cryptocurrency?
Cryptocurrency is a digital or virtual currency designed to be used over the Internet. It is secured by cryptography, which makes it difficult to counterfeit. They enable secure online payments without the use of third-party intermediaries. “Crypto” refers to encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, private and public key pairs, and hashing functions.
How Cryptocurrencies Work ?
Cryptocurrencies work on a distributed public ledger which, in simpler words, is known as a blockchain (A record of all the transactions updated and held by the currency holders). Cryptocurrencies are generated through a process which is called mining. This process involves computer power to solve complex mathematical problems that create coins. Users can also reach out to brokers to buy digital currencies and store and use them through cryptographic wallets.
Best Cryptocurrencies to Invest
There are thousands of cryptocurrencies in the market, which makes it a bit overwhelming when you are first getting started in the world of cryptocurrencies. Now that we know about the basics of cryptocurrencies, it’s time to know some of the best cryptocurrencies to invest in based on their market capitalization and the total value of all the currently circulating coins.
1. Bitcoin (BTC)
Bitcoin is considered the oldest well-known cryptocurrency in India. Experts often refer to Bitcoin as the “gold standard’ of cryptocurrencies. Bitcoin forms up to 46% of the overall cryptocurrency market capitalization. Bitcoin was developed for individuals to send money easily over the Internet. This virtual currency provides an alternative payment system that operates free of any regulating body.
Here are some trends and historical data on Bitcoin’s performance that may be useful while investing in BTC:-
Current Price:- Rs 23,77,185
Market Capitalization:- Rs 46.6 Trillion
5-year returns:- 128%
3-year returns:- 122%
1-year returns:- 37.06%
2. Ethereum (ETH)
Ethereum comes second in the list of best cryptocurrencies for potential growth. It works based on a blockchain network powered by Ethan Token that allows users to make transactions and earn interest on their holding through the trade of cryptocurrencies, use of and store of NFTs (non-fungible tokens), games, etc.
The market trends of ethereum are as follows:-
Current Price:- Rs 1,60,642
Market Capitalization:- Rs 19.5 Trillion
5-year returns:- 77%
3-year returns:- 485%
1-year returns:- 37%
3. Tether (Luna)
Tether is a cryptocurrency that maintains a value equal to an underlying currency such as the dollar or euro. It makes this cryptocurrency a stablecoin, meaning the coin’s value is less volatile. This coin is popular among investors wary of investing in volatile cryptocurrencies but still want to participate in the crypto market. Since Tether is a stable crypto whose value does not fluctuate as often, it is also used as an exchange medium.
Tether Market trends showcase the following performance:-
Current Price:- Rs 82.19
Market Capitalization:- Rs 6.66 Trillion
3-year return :- -0.11%
1 year :- -0.05%
6 months :- -0.04%
4. Ripple (XRP)
XRP came into the limelight towards the end of 2017. It is an open payment network under which you can transfer various currencies. This coin has ties with a private company – Ripple. It aims to overcome the limited mode of financial networks. The coin uses a distributed mechanism to confirm different types of transactions. This feature makes it one of the best cryptocurrencies to invest in.
Checkout, the market trend associated with XRP, are as follows:-
Current Price:- Rs 40.45
Market Capitalization:- Rs 4.08 Trillion
5-year returns :- -64.12%
3-year returns:- 18.74%
1-year returns:- 14.26%
5. Litecoin (LTC)
Litecoin came into existence two years after the launch of Bitcoin by Charlie Lee. It is a decentralised crypto that is based on blockchain technology. The primary idea behind the creation of this coin was to address the limitations of Bitcoin. Despite many similarities with Bitcoin, this cryptocurrency features a faster transaction speed. In addition, the significant overall stock of Litecoin makes it a lucrative investment. You can use this coin to purchase goods and services, send money overseas, and much more. You can conduct all such transactions on this platform without intermediaries.
Litecoin Market performance based on historical data:-
Current Price:- Rs 7466
Market Capitalization:- Rs 576 Billion
5-year returns :- -56.53%
3-year returns:- 19.24%
1-year returns:- 41.69%
Although investing in cryptocurrencies is risky, it allows you to diversify your portfolio from traditional financial assets such as stocks and bonds to digital assets. Investors who are willing to experiment and take risks can choose these best cryptocurrencies to invest in these coins . However, it is always advisable to conduct extensive market research before making any decision.