Market capitalization in cryptocurrency is one of the most common points of reference for newcomers when trying to familiarize themselves with some of the most used or popular cryptocurrencies. In general, market cap combined with daily trading volume can be used as an indicator of how popular a cryptocurrency is and how much money is invested in it.
There are some caveats when using market cap to rank a cryptocurrency. Often, a large amount of coins are held by developer foundations and these may inflate the market cap far above what it really is. Also, market cap cannot be used to determine which cryptocurrencies have the best characteristics and the most potential; it only indicates the market price multiplied by coin supply. Often, market price for a crypto is inflated due to speculation that has little to do with its real value. Finally, crypto ranks according to market cap are always changing.
All data in this article is from CoinMarketCap.
- Bitcoin (BTC) is the gold standard of the cryptocurrency world. It is the original cryptocurrency and was launched in 2009 by Satoshi Nakamoto. As of this writing on 16 July 2018, BTC has a market cap of USD 113.4 billion and daily trading volume of USD 4.8 billion, making it the most ideal cryptocurrency for institutional investment since it has the most liquidity and, therefore, the least slippage when making large trades. Bitcoin tends to lead the markets; when Bitcoin’s price moves up or down, most other cryptocurrencies usually follow.
- Ethereum (ETH) has gained massive popularity since it has smart contract technology, which facilitates the creation of a wide spectrum of decentralized apps from games to cryptocurrency exchanges. The development and growth of decentralized apps on Ethereum gives it strong potential to grow long term. ETH has a market cap of USD 47.8 billion and daily trading volume of USD 2.3 billion. It has enough liquidity for institutional investment.
- Ripple (XRP) is a platform that facilitates international payments. Although it has the 3rd highest market cap at USD 18.2 billion, it is not favored by cryptocurrency enthusiasts since it cannot be mined, and most of the XRP in existence is controlled by the Ripple Foundation. This makes Ripple very centralized. Its lack of popularity can be seen by its relatively low daily trading volume of USD 200 million.
- Bitcoin Cash (BCH) is simply a fork of Bitcoin that branched off in 2017 during a highly controversial debate about block size. Bitcoin implemented Segregated Witness to improve block size while Bitcoin Cash chose to increase block size to 32 mb. Bitcoin Cash claims to be more like cash because of the larger blocks and, therefore, lower transaction fees, but SegWit actually proved to be effective and transaction fees haven’t been a problem for Bitcoin since its implementation. Bitcoin Cash has a market cap of USD 13.2 billion and daily trading volume of USD 500 million.
- EOS was the biggest initial coin offering (ICO) in history, raising USD 1 billion over the course of a year. It finally launched its mainnet, but has sparked centralization fears among users since transactions can be reversed by a centralized organization of block producers. It claims to be a better platform than Ethereum for developing decentralized apps, but the centralization issues might negate any advantages. It currently has a market cap of USD 7 billion and daily trading volume of USD 600 million.
- Litecoin (LTC) is one of the original cryptocurrencies and was the first to use the Scrypt algorithm. Its popularity is derived from being the gold standard for Scrypt cryptocurrency miners, and currently has a market cap of USD 4.8 billion and daily trading volume of USD 300 million.
- Stellar (XLM) is designed for very low fee transactions and is highly scalable. It currently has a market cap of USD 4.3 billion and daily trading volume of USD 5o million.
- Cardano (ADA) claims to be an improved version of Ethereum, and claims to be the first blockchain developed from a science and research approach, which is probably debatable. It was developed by Ethereum co-founder Charles Hoskinson. It has a market cap of USD 3.9 billion and daily trading volume of USD 80 million.
- IOTA (MIOTA) is a top directed acyclic graph (DAG) cryptocurrency. DAG is different than blockchain since transactions don’t have to be verified by using all previous transactions; only a couple of transactions need to be referenced to verify a transaction. IOTA is useful for the internet of things and databases. It currently has a market cap of USD 3 billion and daily trading volume of USD 40 million.
- Tether (USDT) is the leading stable coin and its price per coin is always near USD 1. It is used as an alternative to USD on exchanges when USD is not available. Currently, Tether has a market cap of USD 2.7 billion and daily trading volume of USD 2.4 billion.
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