The upward price movement in Bitcoin’s (BTC) value has created more awareness about investing in this space. While BTC is the most popular and has the largest market cap, investors should be aware that other digital coins can be added to a cryptocurrency portfolio. Learning about these opportunities can help create a more informed decision about taking advantage of alternative choices.
Why Have Cryptocurrencies Become Popular?
Using crypto allows a person to send digital currency to other individuals anonymously and quickly. Each transaction is recorded on a blockchain and can’t be changed. This new form of money allows transactions to be sent worldwide and pay for goods or services with merchants who accept BTC and other cryptocurrencies. Investing in cryptos can also help fight currency devaluation as most have a limited supply and can’t have extra units printed like the US dollar. The volatility in price action also makes them attractive to several investors. However, the lack of price stability can also pose more risk.
In early 2021, Bitcoin moved past the $1 trillion market cap level for a brief period when its price per coin became worth $55,000. Since then, it has traded below that level but will likely top $60,000 per coin if it continues its long uptrend. Adding this bellwether to a cryptocurrency portfolio is probably warranted as it’s a leader in the sector.
Another cryptocurrency with a high market cap, reaching close to $200 billion is Ethereum (ETH). Investing in this digital coin is probably advisable due to its ability to run smart contracts. Decentralized applications, known as dApps, operate on the blockchain, which makes it similar to a computer. Being one of the first cryptos to offer this ability has given it an advantage over other digital currencies. In the future, it will also allow an investor to stake their coins and make a specific percentage off of their investment.
Chainlink (LINK) is also worth adding to a list of investable cryptocurrencies. It’s working on solving a significant challenge in the crypto space. Blockchains are immutable, meaning the transactions can’t be changed. While this is a positive element, it also creates difficulties. When information needs to be sent to and from a blockchain, LINK helps ensure the data is not corrupt. Doing so helps keep the integrity of the network intact.
Adding Litecoin (LTC) to a person’s crypto holdings is also a popular way to diversify and take advantage of its strengths. According to the experts at SoFi Invest, “It offers faster transaction times than other leading digital currencies.” It is also one of the cryptocurrencies having a wide acceptance by vendors and can be used as payment for goods or services. This element makes it more widely used than other digital coins.
Utilizing one or more of these cryptocurrencies can give an investor a good start for their digital wallet. Purchasing these cryptos at various prices may be best to help avoid buying at too high of a price. Over the long-term, a person may become pleased with the returns they receive as more developments occur on both macro and micro levels.