The best cryptocurrency to buy in 2023 is no longer a choice between Bitcoin, Bitcoin and Bitcoin. There’s a whole stable of altcoins and stablecoins that are giving Bitcoin a run for its virtual money and chipping away at Bitcoin’s dominance as the world’s most popular cryptocurrency.
There is such diverse choice at the moment, how do you decide which cryptocurrency is the best one to buy in 2023?
The largest which is Bitcoin? The fastest growing which is Ethereum? Or the most affordable which is Litecoin? And then there are several hundred others that have been created as hardforks of the blockchain and offer digital coins or tokens that can be traded on the forex market.
Did you know?
It’s estimated there are more than 3 000 cryptocurrencies in the world. Some reports say there are as many as 5 000 cryptocurrencies in the crypto space but it’s impossible to nail down the exact number.
As at November 2020, the cumulative market capitalisation of cryptocurrencies was estimated to be about 237 billion US Dollars. Up to 2016, the total market cap was below 18 billion US Dollars. This spiked to over 500 billion US Dollars in the big Bitcoin boom period.
The largest cryptocurrency in the world by market cap is Bitcoin. Then there’s a steep drop-off to the rest in the top 10 cryptocurrencies in the world.
Top 10 cryptocurrencies by market capitilisation in mid-2020**
|1||Bitcoin (BTC)||US$ 125 to 130 billion|
|2||Ethereum (ETH)||US$ 40 to 50 billion|
|3||Ripple XRP (XRP)||US$ 20 to 25 billion|
|4||Tether (USDT)||US$ 15 to 20 billion|
|5||Bitcoin Cash (BCH)||US$ 4 to 5 billion|
|6||Bitcoin SV (BSV)||US$ 2.5 to 3 billion|
|7||Litecoin (LTC)||US$ 2.5 to 3 billion|
|8||EOS (EOS)||US$ 2.5 to 3 billion|
|9||Binance Coin (BNB)||US$ 2 to 2.5 billion|
|10||Tezos (XTZ)||US$ 1.5 to 2 billion|
** rounded up
Market capitalisation is one method used to rank the relative size of a cryptocurrency. Market cap is calculated by multiplying the Price by the Circulating Supply:
Price X Circulating Supply = Market capitalisation
Launched in 2009
Total market capitalisation: US$ 125 to 130 billion
When you think of cryptocurrencies, Bitcoin will be the first one you think of. Launched in 2009 by a mysterious programmer called Satoshi Nakamoto, Bitcoin was the first modern digital currency and took the world both by surprise and by storm.
The digital phenomenon is built on an electronic payment system that uses the complex blockchain technology and was designed to be totally independent of central authority or servers.
Bitcoin caused a big rumble when it was launched but had a fairly slow start. Then it literally exploded in 2017 and hit a record price high of nearly US$ 20 000. This was followed by 3 years in a price slump.
On the back of the Covid-19 pandemic and the fact that the digital coin is gaining traction as a method of payment, Bitcoin experienced another dramatic spike in 2020 and hit an all-time price high of US$23 000 in December 2020.
Comparing it to Ethereum which is its main competitor, Bitcoin transactions take minutes while Ethereum takes seconds. However, Bitcoin is much more widely accepted as an alternative currency to fiat and more and more merchants are accepting Bitcoin over any other cryptocurrency as a method of payment.
The fact that Bitcoin is the most famous cryptocurrency in the world means the digital coin has a lot of credibility and worldwide acceptance among merchants, despite how volatile the demand is for Bitcoin. It’s still the best cryptocurrency to buy in 2023, particularly by investors who are new to trading cryptocurrencies.
2. Ethereum (ETH)
Launched in 2014
Total market capitalisation: US$ 40 to 50 billion
Ethereum originated as a hardfork off the Bitcoin blockchain. It was designed for the development of decentralised applications (dApps) and the coding of smart contracts. dApps are built and run without any downtime, control, interference or fraud form third parties.
Basically, Bitcoin is a cryptocurrency and Ethereum is a software platform. Bitcoin has a store of value while Ethereum transactions are mostly executable code. While Ethereum was never designed to compete with Bitcoin, it now does through its digital token called Ether.
Ether is the digital token of Ethereum. It’s used as the fuel that runs the Ethereum network. Ether is a platform-specific cryptographic token as opposed to a digital coin like Bitcoin. On the forex market, Ether (ETH) is one-tenth the size of Bitcoin by market cap but it’s the second-largest and one of the fastest-growing digital currencies in the world.
Ether has become one of the most popular cryptocurrencies to buy and sell on the Binance exchange or trade on the forex market, particularly as a currency pair with Bitcoin. What makes Ethereum all the more attractive as the best cryptocurrency to buy in 2023 is the recent launch of DeFi and the speed at which Ethereum process transactions. Ethereum transactions are processed in seconds while Bitcoin is in minutes.
3. Ripple (XRP)
Launched in 2012
Total market capitalisation: US$ 20 to 25 billion
Like Ethereum, Ripple (XRP) is a software programme that originated as a hardfork of the blockchain technology. It offers users instant, guaranteed and low-cost international payments. Banks can use the technology to settle cross-border payments in real-time with end-to-end transparency, all at a lower cost than traditional cross-border transactions.
Ripple XRP does not require mining due to its consensus ledger. This method of conformation means all Ripple’s XRP tokens were pre-mined before the launch and supply and demand for XRP is driven by the introduction and removal of XRP tokens from the market supply. Market supply is determined by the network’s guidelines.
Bitcoin is a cryptocurrency while Ripple’s XRP is an altcoin. However, XRP is different to other altcoins because the vast amount of power needed for mining coins has been eliminated.
Ripple (XRP) is one of the most exciting altcoins on the market at the moment, more so for what it’s software programme can do for cross-border international payments than as a method of payment.
Large traditional institutions are paying keen attention to Ripple (XRP) and looking at how they can harness the benefits of Ripple to revolutionise traditional ways of making payments across international borders.
4. Tether (USDT)
Launched in 2014
Total market capitalisation: US$ 15 to 20 billion
Tether is part of a group of cryptocurrencies known as stablecoins. A stable coin is a new class of digital currency that is designed to offer price stability. It’s pegged to the market value of a reserve asset (USD) or other financial instruments in order to reduce volatility.
Tether was the first of its kind and is the most popular stablecoin in the group. Unlike Bitcoin which has experienced extreme ups and downs in pricing, Tether smooths out price fluctuations which is why it has become one of the best cryptocurrencies to buy in recent years.
Tether is different to Bitcoin and other cryptocurrencies because there is the supply of the digital coin is not limited or released on a fixed schedule. Rather, Tether is released based on market conditions and the economic environment.
The stability of Tether’s pricing makes it a popular choice for beginner forex traders and new investors dipping their toes into the cryptocurrency market. It’s the least volatile cryptocurrency to trade and it more or less performs like fiat (national currency).
You can buy Tether through the Binance exchange and trade it at parity with US Dollars. It can also be used to buy other cryptocurrency coins or tokens. Tether is the best cryptocurrency to buy if you want to avoid the volatility of Bitcoin and use it as an accepted method of payment.
5. Bitcoin Cash (BCH)
Launched in 2017
Total market capitalisation: US$ 4 to 5 billion
Bitcoin woke up to the fact that hardforks such as Ethereum, Litecoin and Tether were a threat to its dominance as the most popular cryptocurrency to invest in and the preferred method of digital payment. Thus, Bitcoin Cash was Bitcoin’s own hardfork on the blockchain to overcome scalability and allow faster transaction times.
Bitcoin Cash was created to accommodate a large block size compared to Bitcoin. This would allow more transactions into a single block and speed of the transaction processing time. Bitcoin and Bitcoin Cash share the same consensus mechanism and supply is capped at 21 million digital coins.
Bitcoin Cash is pretty much the ‘hidden sibling’ in the Bitcoin family but its scalability has great potential for growth. It’s newer and less popular but keep an eye on Bitcoin Cash. It won’t be long before it’s one of the best cryptocurrencies to buy in the near future.
6. Bitcoin SV (BSV)
Launched in 2018
Total market capitalisation: US$ 2.5 to 3 billion
The SV in Bitcoin SV (BSV) stands for ‘Satoshi Vision’. This little-known but fast growing cryptocurrency is a hardfork of Bitcoin Cash and a ‘fork of a fork’ of the original Bitcoin. It originated through an upgrade in 2018 after a drawn out debate between mining and developing factions in the Bitcoin Cash community.
This hardfork is said to restore the original blockchain protocol and is more true to Satoshi Nakamori’s vision for a truly decentralised cryptocurrency. Modifications have increased the coin’s stability and allowed for greater scalability. Security has also been prioritised and transaction processing times are faster.
Is Bitcoin SV a good investment? Time will tell. Word in the crypto space is Bitcoin SV will be a good long-term investment. The price is expected to increase steadily over the long term and the digital coin is less likely to experience the volatility of Bitcoin. You could buy now while the price is affordable and hang on to it for the predicted price increase.
7. Litecoin (LTC)
Launched in 2011
Total market capitalisation: US$ 2.5 to 3 billion
Litecoin was one of the first cryptocurrencies to launch as a challenger to Bitcoin dominance. It’s seen as the silver coin to Bitcoin’s gold status. Litecoin was created by Charlie Lee, an MIT graduate and former Google engineer, as an open-source global payment network that is not controlled by any central authority.
Litecoin uses ‘scrypt’ as a proof of work which is decoded on Central Processing Units (CPUs). It originated as a hardfork of Bitcoin’s blockchain technology and modifications made by Lee have helped it scale more effectively.
The name Litecoin essentially is a spoof on the fact that Charlie Lee developed it as a ‘lite’ version of Bitcoin. However, Litecoin’s popularity is surging, mainly because its speed of transactions are a lot faster than Bitcoin.
Litecoin has a faster block generation rate than Bitcoin which makes Litecoin transaction confirmation times much faster. A Bitcoin transaction that takes about 10 minutes can be done via the Litecoin network in about 3 minutes. For this reason, more and more merchants are accepting Litecoin as an alternative to national currency and Bitcoin.
Litecoin is also a lot ‘cheaper’ to mine because it has far lower system requirements than Bitcoin. Actually, all you need is an ordinary PC to mine Litecoin. If you’re interested in investing in Litecoin or mining Litecoin in 2023, you’ll find it one of the more rewarding cryptocurrencies on the market.
8. EOS (EOS)
Launched in 2018
Total market capitalisation: US$ 2.5 to 3 billion
EOS is the new kid on the block and has only just made it onto the list of best cryptocurrencies to buy in 2023. That’s mainly because the current price is low and highly affordable and its prospects as a long-term investment are looking good.
EOS operates in direct competition as Ethereum. The blockchain-based software programme enables the development of decentralised applications (dApps) and the coding of smart contracts. Businesses and individuals create dApps in the same way as they do web-based apps but the difference is no-one can change the workable code in the dApp without consensus.
EOS also offers a web-based toolkit for interface development. It works in much the same way as Google’s Play Store and Apple’s App Store and offers users hassle-free software to develop smart apps.
A big advantage of EOS is it does not require mining to produce coins. Rather, producers generate blocks and are rewarded in EOS tokens based on their production rates.
The EOS token is the cryptocurrency of the EOS network and acts like the fuel that powers the network. To use the EOS network to build and run dApps, developers need to hold EOS coins. People who trade EOS tokens rather than use them to develop apps can allocate or rent their bandwidth to other participants who need them.
Is EOS a good investment? The price of EOS is affordable and the demand for EOS tokens is likely to increase purely because of how valuable the software programme is for industry. The more developers convert to platforms like EOS and Ethereum to build and run dApps, the greater the demand will be for the tokens.
9. Binance Coin (BNB)
Launched in 2017
Total market capitalisation: US$ 2 to 2.5 billion
Now we’re getting to names on the Top 10 list of best cryptocurrencies to buy in 2023 that you might not have heard of but this is a new coin that’s worth paying attention to.
Binance Coin is a very popular cryptocurrency that was created by the Binance digital exchange (DEX). The exchange is the largest cryptocurrency exchange in the world by volume and boasts a daily trading volume of US$ 1.5 billion.
Binance Coins are almost exclusively used to pay transaction fees on the Binance exchange. Fees paid in Binance Coin receive a discount and this one of the reasons Binance Coin has become so popular. Binance DEX itself has been instrumental in driving the popularity of the less-known cryptocurrencies.
Binance Coin was originally hosted on the Ethereum platform until the Binance decentralised exchange (DEX) went online. The decentralised platform allows users to trade in dozens of different cryptocurrencies. Users can buy and sell Binance Coins on the platform or convert the Binance Coins they hold to other cryptocurrencies.
Is Binance Coin a good investment? For as long as the Binance exchange continues to use Binance Coin as a discount coupon and doesn’t change its discount protocol, Binance Coin will remain popular and one of the best cryptocurrencies to buy in 2023. If the discount offered to Binance uses is decreased or stopped, there’s no real incentive to buy Binance Coins.
10. Tezos (XTZ)
Total market capitalisation: US$1.5 to 2 billion
Now here’s a name you probably haven’t heard of but it’s one of the up-and-coming crypto brands that finds itself on the list of the best cryptocurrencies to buy in 2023.
Tezos is not a digital coin like Bitcoin, Instead, it’s a decentralised, open-source blockchain network that’s used to for the development of decentralised applications (dApps) and the coding of (smart contract).
Tezos completes with the likes of Ethereum and EOS but it’s unique in that it uses a liquid proof-of-stake consensus mechanism. The platform also has incorporated an agonistic native-middleware known as a Network Shell. This means developers can use modules during the construction of dApps.
Tez is the digital token of Tezos and is used to fuel the peer-to-peer network. To participate on the Tezos network, developers need Tez tokens. As the Tezos platform grows in popularity for the development of dApps and smart contracts, the demand for Tez will increase. You can buy Tez tokens on the Binance exchange or trade them as part of a currency pair.
What is the difference between a cryptocurrencies and an altcoin
Cryptocurrencies – or rather Bitcoin and altcoins – are either be a digital coin or a token. For example, Bitcoin is a coin and Ether (Ethereum) is a token. The crypto part of cryptocurrency comes from cryptography which is the complex science of coding which is used to secure computer networks, online systems and digital data.
Cryptocurrencies is the broad term for all virtual or digital money. However, altcoin is the term used for anything other than Bitcoin. Altcoins are hard forks off blockchain technology and may only be a mining-based cryptocurrency and used for enterprise solutions such as smart contracts. Ethereum and Ripple (XRP) are the two largest altcoins by market capitalisation.
The popularity of cryptocurrencies have boomed and waned since Bitcoin exploded on the market in 2009. Bitcoin spiked in All indications are that cryptocurrencies popularity will gain traction as world events like the 2020 pandemic and increased access to the Internet provide people around the world with greater access to money that’s not fiat.
FOREX TRADING AFRICA DISCLAIMER
Trading cryptocurrencies carries a high level of risk and may not be suitable for all traders and investors. Before you start trading cryptocurrencies on the forex market, set your investment objectives and consider your appetite for risk. Fiat and currency trading could lead to you losing a large amount of money, particularly if you trade on leverage.