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Forbes Advisor provides this content for educational purposes only and is not intended to assist you in deciding whether to invest in cryptocurrencies or any other investment. If you decide to invest in cryptocurrencies or any other investment, always seek proper financial advice and only invest amounts you can afford to lose.
From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, which can seem overwhelming for those looking to enter the high-risk world of crypto for the first time.
These are some of the top cryptocurrencies, picked based on market cap (the total value of all coins currently in circulation).
What are cryptocurrencies?
Cryptocurrencies are high-risk digital assets that can circulate without the centralized control of banks or governments. To date, there are over 26,000 cryptocurrency projects, accounting for £917 billion of the total cryptocurrency market.
1. Bitcoin (BTC)
- Market capitalization: £1.06 trillion
Created by Satoshi Nakamoto in 2009, Bitcoin (BTC) is the original cryptocurrency. Like most cryptocurrencies, BTC runs on a blockchain, a ledger that records transactions distributed across a network of thousands of computers. Any addition to the distributed ledger must be verified by solving a cryptographic puzzle, a process called proof-of-work, and Bitcoin is designed to be safe from scammers.
The price of Bitcoin has risen and fallen sharply throughout its history. In May 2016, one Bitcoin was worth around £370. As of June 3, 2024, that figure is around £54,156.
Bitcoin Price
2. Ethereum (ETH)
- Market capitalization: GBP 360 billion
Ethereum, both a cryptocurrency and a blockchain platform, is favored by some program developers because of its potential uses, such as so-called smart contracts and non-fungible tokens (NFTs), which execute automatically when conditions are met.
The price of Ethereum has also experienced significant fluctuations.
From April 2016 to June 3, 2024, the price increased from approximately £8 to approximately £2,997. The peak price in November 2021 was £3,400, showing the high volatility.
Ethereum Price
3. Tether (USDT)
- Market capitalization: £88.1 billion
Unlike other forms of cryptocurrency, Tether (USDT) is a stablecoin, meaning it is pegged to a fiat currency like the US Dollar or Euro and maintains a value virtually equal to its face value of either of those.
In theory, this means Tether's value should be more stable than other cryptocurrencies, making it popular with some investors wary of the extreme volatility of other coins, though it has fallen below its $1 peg in the past.
4. Binance Coin (BNB)
Binance Coin is a cryptocurrency. It was launched in 2017 and sold for less than 10 pence. It peaked at around £484 in July 2017 and is worth £492 as of 3 June 2024.
5. Solana (SOL)
Developed to power decentralized finance (DeFi), decentralized apps (DApps), and smart contracts, Solana operates on a unique hybrid proof-of-stake and proof-of-history mechanism aimed at processing transactions quickly and securely. Solana's native token, SOL, powers the platform.
When it was launched in 2020, the price of SOL started at £0.57. It peaked at around £191 at the end of October 2021. Then, on June 3, 2024, the price dropped to around £129.
6 US Dollar Coin (USDC)
Like Tether, USD Coin (USDC) is a stablecoin, meaning it is theoretically pegged to the US Dollar currency and aims for a ratio of 1 USD to 1 USDC. USDC is powered by Ethereum and can be used to complete global transactions.
7. Ripple (XRP)
Created by some of the same founders as digital technology and payment processing company Ripple, XRP can be used on its network to facilitate the exchange of many different types of currencies.
At the beginning of 2017, the price of XRP was £0.004. At the end of April 2021, the price peaked at around £1.19 and as of June 3, 2024, it is at £0.40, showing its volatility.
XRP Price
8. Dogecoin (DOGE)
Dogecoin famously began as a joke in 2013, but quickly evolved into a well-known cryptocurrency thanks to its dedicated community and creative memes. Unlike many other cryptocurrencies, Dogecoin has no limit on how many can be created, which means that an increase in supply could cause the currency to depreciate in value.
The price of Dogecoin was £0.00016 in 2017. It peaked at around £0.45 in May 2021. Then, by June 2024, the price was £0.12, revealing its volatility.
Dogecoin Price
9. Cardano (ADA)
- Market capitalization: £12.7 billion
A bit of a latecomer to the crypto world, Cardano (ADA) is notable for being an early adopter of proof-of-stake verification, a method designed to speed up transaction times, reduce energy usage and environmental impact, aiming to eliminate the racing and problem-solving aspects of transaction verification on platforms like Bitcoin.
Cardano works similarly to Ethereum to enable smart contracts and decentralized applications run by its native coin, ADA.
In 2017, the price of Cardano's ADA token was around £0.015. Cardano's price peaked at around £2.06 as of August 2021. As of June 3, 2024, the price is at £0.35, showing its volatility.
Cardano Price
10. Toncoin (TON)
- Market capitalization: £12.5 billion
Launched in 2021, Toncoin is the native currency of TON (The Open Network), a decentralized, open internet platform created by the Telegram messaging platform.
Prices rose between February and April 2024. TON is currently trading at GBP 5.21, down from a high of GBP 5.77 on April 12. It has a market capitalization of GBP 12.5 billion.
Cryptocurrencies are not regulated in the UK, and the UK regulator, the Financial Conduct Authority, has repeatedly warned investors that buying cryptocurrencies means they risk losing all their money, with no possibility of compensation.
Frequently Asked Questions (FAQ)
What are cryptocurrencies?
Cryptocurrency is a type of currency that exists only in digital form and is a high-risk investment. Cryptocurrency can be used to pay for online purchases or held as an investment.
How is trading cryptocurrencies different from trading stocks?
While it is possible to invest in cryptocurrencies, it is very different from traditional investments such as stocks.
When an investor buys stock, they are buying part of the ownership of a company, which gives them rights such as voting on company policies. If the company goes bankrupt, the investor may also get paid after creditors have been paid from the liquidation assets.
Purchasing cryptocurrency does not give investors any ownership rights other than the token itself. It is like exchanging one currency for another. If the value of a cryptocurrency declines, cryptocurrency holders will suffer the loss of the decline in price.
There are some other important differences to keep in mind:
- Trading hours:Shares are only traded during the stock exchange's opening hours – for example, the London Stock Exchange trading hours are Monday to Friday from 8am to 4:30pm – the cryptocurrency market never closes, so trading takes place 24 hours a day, 7 days a week.
- Regulation:Stock trading is subject to regulation and the finances of publicly traded companies are matters of public record. In contrast, cryptocurrencies are not regulated investment vehicles, meaning investors may not know about the inner workings of cryptocurrencies or the developers working on them.
- Volatility:Investing in both stocks and cryptocurrencies involves risk, and both carry the potential for loss as well as the potential for profit. But stocks are directly tied to companies and generally rise and fall based on the company's performance. Cryptocurrency prices are more speculative; no one is sure of their value yet. That's why they are much more volatile and can be affected by even the smallest things, like a celebrity tweet.
Are there taxes on cryptocurrencies?
Tax treatment will vary depending on individual circumstances and may change in the future.
The content of this article is for informational purposes only and is not intended to be, and does not constitute, tax advice.
It is important to be aware of tax laws that may apply to cryptocurrencies.
Cryptocurrency is not treated as cash, but as a capital asset like stocks, which means that if you sell your cryptocurrency at a profit, the gain is subject to capital gains tax.
This is true even if cryptocurrency is used to pay for the purchase: if an investor receives more value than he or she paid, he or she may be liable to pay tax on the difference, which is subject to normal tax deductions.
Are there any cryptocurrency exchange-traded funds (ETFs)?
Given the existence of thousands of cryptocurrencies (and the high volatility associated with most of them), investors have the option to take a diversified approach to cryptocurrency investments and minimize the risk of losing more money.
Cryptocurrency ETFs began appearing at the end of 2021.
