Best Cryptocurrencies for May 2024 – Forbes Advisor Canada

From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, which makes it overwhelming when you’re first starting out in the world of crypto. To help you get your bearings, here are the top 10 cryptocurrencies based on their market capitalization, or the total value of all the coins currently in circulation.

What are cryptocurrencies?

A cryptocurrency is a digital asset that can circulate without the centralized authority of a bank or government. To date, there are more than 19,000 cryptocurrency projects out there representing the entire $1.6 trillion ($1.3 trillion USD) crypto market.

1. Bitcoin (BTC)

Market cap: $1 trillion CAD ($759 billion USD)

Created in 2009 by Satoshi Nakamoto, Bitcoin (BTC) is the original cryptocurrency. As with most cryptocurrencies, BTC runs on a blockchain, or a ledger that records transactions distributed across a network of thousands of computers. Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, Bitcoin is kept safe and secure from fraudsters.

Bitcoin’s price soared as it became a household name. In May 2016, you could buy one Bitcoin for about $500. As of November 28, 2023, a single Bitcoin’s price was around $37,427. This is a growth of 7.385%.

Related: How to Buy Bitcoin

2. Ethereum (ETH)

Market cap: $340 billion CAD ($252 billion USD)

Both a cryptocurrency and a blockchain platform, Ethereum is a favorite of software developers because of its potential applications, such as so-called smart contracts that execute automatically when conditions are met and such as non-fungible tokens (NFTs).

Ethereum has also experienced tremendous growth. From April 2016 to the end of November 2023, the price rose from about $11 to about $2,036, increasing 18,409%.

Related: How to Buy Ethereum

3. Tether (USDT)

Market Cap: $120 billion CAD ($89 billion USD)

Unlike some other forms of cryptocurrency, Tether (USDT) is a stablecoin, meaning it is backed by fiat currencies like US dollars and the Euro and hypothetically holds a value equal to one of those denominations. In theory, this means that Tether’s value is supposed to be more consistent than other cryptocurrencies, and is favored by investors wary of the extreme volatility of other coins. If you are instead looking for a stablecoin that is tied to the stability of the Canadian dollar, then QCAD is what you want.

4. Binance Coin (BNB)

Market cap: $46 billion CAD ($34 billion USD)

Binance Coin (BNB) is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. Since its launch in 2017, Binance Coin has expanded to only facilitate trading on Binance’s exchange platform. Now it can be used for trading, payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.

BNB’s price in 2017 was just $0.10. By the end of November 2023, its price had risen to around $230, a gain of 229,847%.

5. XRP (XRP)

Market cap: $44 billion CAD ($32 billion USD)

Cby some of the same founders as Ripplea digital technology and payment processing company, XRP can be used on that network to facilitate exchanges of different currency types, including fiat currencies and other major cryptocurrencies.

At the beginning of 2017, the price of XRP was $0.006. As of November 28, 2023, its price reached $0.61, equivalent to an increase of 10.058%.

Related: How to Buy Cryptocurrency

6. Solana (SON)

Market cap: $34 billion CAD ($25 billion USD)

Developed to help power decentralized finance (DeFi) uses, decentralized applications (DApps) and smart contracts, Solana uses a unique hybrid proof-of-stake and proof-of-history mechanisms to execute transactions quickly and securely process. SOL, Solana’s native token, powers the platform.

When it launched in 2020, SOL’s price started at $0.77. By the end of November 2023, its price was around $56.29, a gain of 7,210%.

7. USD Coin (USDC)

Market cap: $33 billion CAD ($24 billion USD)

Like Tether, USD Coin (USDC) is a stablecoin, meaning it is backed by US dollars and aims for a 1 USD to 1 USDC ratio. USDC is powered by Ethereum, and you can use USD Coin to complete global transactions. There is one stable coin that is pegged at a one to one ratio to the Canadian dollar called QCAD, but if you want to transact according to the current US dollar value, USDC is definitely a main option.

8. Cardano (ADA)

Market cap: $18 billion CAD ($13 billion USD)

Somewhat later on the crypto scene, Cardano (ADA) is notable for its early embrace of proof-of-stake validation. This method speeds up transaction time and reduces energy consumption and environmental impact by removing the competitive, problem-solving aspect of transaction verification present in platforms like Bitcoin. Cardano also works like Ethereum to enable smart contracts and decentralized applications, which ADA, its original coin, powers.

Cardano’s ADA token has seen relatively modest growth compared to other major cryptocurrencies. In 2017, ADA’s price was $0.02. As of November 28, 2023, its price was at $0.38. This is an increase of 1,810%.

9. Dogecoin (DOGE)

Market Cap: $15 billion CAD ($11 billion USD)

Known as a joke in 2013, Dogecoin quickly developed into a prominent cryptocurrency thanks to a dedicated community and creative memes. Unlike many other cryptos, there is no limit to the number of Dogecoins that can be created, making the currency susceptible to devaluation as supply increases.

Dogecoin’s price in 2017 was $0.0002. By November 2023, its price was at $0.08, up 39,589%.

10. TRON (TRX)

Market Cap: $12 billion CAD ($9 billion USD)

Just like Solana, TRON is a blockchain designed to run smart contracts and other DeFi applications. TRX is the platform’s native cryptocurrency, which powers its proof-of-stake consensus algorithm.

TRON was founded in 2017, and TRX was initially valued at $0.0019 per token. At its peak in 2018, TRX rose as high as $0.2245, for a gain of 11.715% in a matter of months. TRX is currently valued around $0.10.

What are cryptocurrencies?

Cryptocurrency is a form of currency that exists solely in digital form. Cryptocurrency can be used to pay for online purchases without going through an intermediary, such as a bank, or it can be held as an investment.

How does Cryptocurrency work?

Cryptocurrencies are various forms of digital money that are usually based on blockchain technology. Blockchain technology allows most cryptocurrencies to exist as “trustless” forms of transactions. This means that there is no centralized authority that oversees the transactions on a cryptocurrency’s blockchain.

The world’s first cryptocurrency, Bitcoin, was created in 2009 by the pseudonymous computer programmer Satoshi Nakamoto.

Why are there so many cryptocurrencies?

Cryptocurrency is an emerging field with over 22,000 crypto projects in existence as of June 2023.

While some cryptos function as currencies, others are used to develop infrastructure. For example, in the case of Ethereum or Solana, developers build other cryptos on top of these platform currencies, and this creates even more possibilities (and cryptos).

How to Invest in Cryptocurrency?

You can buy cryptocurrencies through crypto exchanges, such as Coinbase, Kraken or Gemini. In addition, some brokers, such as Wealthsimple and Interactive Brokers, also allow consumers to buy cryptocurrencies.

How to Report Crypto on Taxes

If you buy and sell coins, it’s important to pay attention to cryptocurrency tax rules.

Cryptocurrency is treated as a capital asset, like stocks, rather than cash. This means that if you sell cryptocurrency at a profit, you have to pay capital gains tax. This is the case even if you use your crypto to pay for a purchase. If you receive a greater value for it than you paid, you will owe tax on the difference.

*Market cap and prices obtained from coinmarketcap.com, valid as of June 20, 2022.

Crypto FAQ

How is trading cryptocurrencies different from trading stocks?

Although you can invest in cryptocurrencies, they are very different from traditional investments, such as stocks. When you buy stock, you are buying a share of ownership of a company, which means you are entitled to do things like vote on the direction of the company. If that company goes bankrupt, you may also receive compensation once its creditors have been paid from its liquidated assets.

By buying cryptocurrency, you are not giving ownership over anything but the token itself; it is more like exchanging one form of currency for another. If the crypto loses its value, you will not receive anything afterwards.

There are several other key differences to keep in mind:

Trading Hours: Shares are traded only during stock exchange hours, generally 9:30 a.m. to 4:30 p.m. ET, Monday through Friday. Cryptocurrency markets never close, so you can trade 24 hours a day, seven days a week.Regulation: Shares are regulated financial products, meaning that a governing body verifies their credentials and their finances are matters of public record. In contrast, cryptocurrencies are not regulated investment vehicles, so you may not be aware of the inner dynamics of your crypto or the developers working on it. Volatility: Both stocks and cryptocurrency involve risk; the money you invest may lose value. However, stocks are directly linked to companies and usually rise and fall based on those companies’ performance. Cryptocurrency prices are more speculative – no one is quite sure of their value yet. This makes them much more volatile and affected by something as small as a celebrity’s tweet.

Are there cryptocurrency exchange-traded funds (ETFs)?

Given the thousands of cryptocurrencies that exist (and the high volatility associated with most of them), it’s understandable that you might want to take a diversified approach to investing in crypto to reduce the risk of losing money. reduce.

There are several Cryptocurrency ETFs you can invest in, including the Purpose Bitcoin ETF, the Purpose Ether ETF, and the Evolve Bitcoin ETF, among others.

What are altcoins?

When we first think of crypto, we usually think of Bitcoin. This is because Bitcoin represents more than 45% of the total cryptocurrency market. So if we talk about any cryptos outside of Bitcoin, all those cryptos are considered altcoins.

For example, Ethereum is considered the most popular altcoin.

Why is Bitcoin valuable?

Part of what makes Bitcoin so valuable is its scarcity. Bitcoin’s maximum supply is limited to 21 million coins. Currently there are 19 million coins in circulation.

To create supply, Bitcoin rewards crypto miners with a set amount of Bitcoin. (To be precise, 6.25 BTC is issued when a miner has successfully mined a single block.). To keep the process in check, the rewards given for mining Bitcoin are cut in half almost every four years.

Why are cryptocurrencies important?

While the initial premise of cryptocurrency was to solve the problems with traditional currencies, there is now a whole host of utility cryptocurrency that has emerged, thanks to the creation of the blockchain.