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Forbes Advisor has provided this content for educational purposes only and not to help you decide whether or not to invest in cryptocurrency. Should you decide to invest in cryptocurrency or any other investment, you should always seek appropriate financial advice and only invest what you can afford to lose.
Since its launch in 2008, Bitcoin has inspired an explosion of other cryptocurrencies. These ‘alternative’ cryptocurrency coins – altcoins – now number over 5,000.
If you want to invest in cryptocurrency, one option is to diversify by holding a selection of coins outside of Bitcoin, taking into account the features they offer.
Below are the 10 altcoins with the highest market capitalization at the time of writing that have been approved by the financial regulator, the Financial Conduct Authority (FCA).
Ether (ETH)
Ether is the cryptocurrency native to Ethereum, the global software platform that runs applications including smart contracts, games, and financial transactions through blockchain technology, as well as minting and storing non-fungible tokens, or NFTs.
Launched in 2015, it has amassed a market capitalization of over £210 billion, as of January 2024. Each Ether token is worth around £1,895, well below the record high of £4,022.12 it registered in November 2021 .
Tether (USDT)
Launched in 2017, Tether is one of around 200 stablecoins.
A stablecoin is pegged to fiat currency, in this case, the US dollar. For every Tether coin issued, the creators keep $1 in reserve, and for every dollar paid out, one Tether coin is destroyed.
In theory, Tether retains a value of around $1 (or £0.81 in sterling terms) at all times. This stability can make Tether a good option for transferring value between exchanges, as Tether holdings are more likely to maintain a stable value than other, more volatile coins.
However, stablecoins are not foolproof. In early May 2022, another stablecoin, Terra USD, fell – falling from $1 to a low of just $0.30 per coin. In response, investors cashed out millions of dollars that they put into other stablecoins, including Tether.
In the following weeks, Tether’s market cap fell from $83 billion (£65.6 billion) to $73 billion (£57.70). Today its market capitalization stands at around £72 billion.
Solana (SUN)
Just like Ethereum, the Solana blockchain platform was built for the purpose of hosting decentralized applications. Both the platform and its cryptocurrency were launched in 2020.
One key advantage of Solana is the platform’s low transaction fees, which work out to be considerably cheaper than its competitors. The platform can process as many as 65,000 transactions per second, mainly due to its verification through a new ‘proof-of-history’ process.
This processing method adds a ‘timestamp’ to each block, creating a permanent record of which transactions happened in which order.
As of January 2024, Solana is worth £58.62. Solana’s market capitalization is £39 billion.
Binance Coin (BNB)
Binance Coin (BNB) was launched in 2017 and runs on the Ethereum blockchain.
During its initial coin offering (ICO), Binance issued 200 million BNB coins, but the platform periodically buys back and destroys – ‘burns’ – some of these coins, increasing the value of those in circulation.
The coin was valued at £250 as of January 2024.
XRP (XRP)
XRP is a cryptocurrency best known for its use on the global money transfer network, Ripple.
The cryptocurrency was first launched in 2012 on its own ledger. Unlike bitcoin, XRP transactions are not verified by proof-of-work or proof-of-stake. Instead, transfers are processed by network participants known as validators.
To make a transaction through Ripple, a small fee is charged – a small fraction of one XRP token, which is destroyed.
The creator of the coin, Ripple Labs, recently won a court case brought against it by the Securities and Exchange Commission (SEC), the US equivalent of the Financial Conduct Authority in the United Kingdom. The suit alleged that Ripple Labs sold an unregistered security by selling XRP tokens for fundraising purposes.
Securities are financial instruments that represent ownership – such as shares in a company – but have no utility. In the US, they must be legally registered with the SEC.
In mid-July, a judge ruled that XRP should not be classified as a security, and Ripple Labs did not violate the law. The token’s value shot up 75% in the hours following the decision.
In January 2024, XRP had a market cap of £27 billion. Each coin is worth around £0.50.
The number of XRP tokens that can ever be in circulation is limited to 100 billion.
USD coin (USDC)
USD Coin (USDC) is a stablecoin pegged to the value of one US dollar.
For every USDC in circulation, one dollar is held in reserve. When a coin is exchanged for fiat currency, it is destroyed – ensuring that the number of coins issued and dollars held in reserve remain the same. USDC was first issued in 2018 by peer-to-peer payment platform, Circle.
As of January 2024, USDC’s value remains at $1 (approx. £0.78). Its market capitalization is £19 billion.
Cardano (ADA)
Cardano was created by Ethereum co-founder Charles Hoskinson in 2017. It is the native cryptocurrency of the Cardano blockchain platform, and uses proof-of-stake, rather than proof-of-work, to verify transactions and to process.
Proof-of-stake blockchains require significantly less energy than their proof-of-work counterparts, as this process uses an algorithm to select only one device in the decentralized network to verify each block of transactions, rather than each device compete every time.
From January 2024, one Cardano is worth £0.50. Its all-time high was £2.45, which it reached in September 2021. Its market capitalization stands at £17 billion.
Avalanche (AVAX)
Avalanche (AVAX) is a relatively new cryptocurrency. Despite only emerging in 2020, it has gained immense popularity as an alternative for Ethereum developers. Avalanche has become one of the larger cryptocurrencies, with a market capitalization of around £12 billion.
AVAX is currently trading at £33.77.
Dogecoin (DOGE)
What started as a tongue-in-cheek meme currency quickly became a crypto-asset.
Dogecoin was created in late 2013, using blockchain technology derived from Litecoin, and accompanied by a Shiba Inu dog logo. The coin is known for its humorous origins and unlimited supply, which made it an attractive entry point to crypto for new investors.
Dogecoin saw its value rocket to an all-time high of £0.58 in 2022, partly in response to Elon Musk’s tweet about buying Tesla goods with Dogecoin.
As of December 2023, Dogecoin’s value has fallen to around £0.07. Its market capitalization is £10 billion.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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