Major points:
- The first cryptocurrency, Bitcoin, was introduced in January 2009.
- On the cryptocurrency market, many coins are traded.
- The majority of cryptocurrencies have modest market caps.
The cryptocurrency market has recovered so far in 2023 following a severe crypto winter in 2022 that saw the demise of FTX and numerous other exchanges, lenders, and hedge funds that dealt in cryptocurrencies. Bulls in the cryptocurrency market think the choppy market is headed for new all-time highs and are hopeful that regulatory certainty would make it easier for institutional investors to adopt bitcoin for the first time.
Even though there are now thousands of different cryptocurrencies, bitcoin and ethereum continue to rule the crypto industry. The market capitalizations of Ethereum and Bitcoin account for more than 60% of the $1.12 trillion cryptocurrency industry.
1. Bitcoin (BTC)
Capitalization: $548 billion
Return over the prior year: 48%
The world's most well-known and valued cryptocurrency, bitcoin, is still in existence around 14 years after it was first introduced. The blockchain-based, decentralized transaction verification, and public ledger system of Bitcoin, which was developed by an unknown individual or group using the pseudonym Satoshi Nakamoto, completely changed the way that people think about digital security.
While investors and consumers find bitcoin appealing because to its decentralization and openness, detractors have expressed worries about its energy-intensive proof-of-work consensus method and highlighted challenges with network scaling. Additionally, there are already a number of sizable crypto projects that both have blockchains with unique designs that enhance the functionality of bitcoin and have faster transaction rates than bitcoin.
2. Ethereum (ETH)
Capitalization: $204 billion
Return over the prior year: 33%
One of the first cryptocurrencies, or bitcoin substitutes, was ethereum. Since its introduction in July 2015, Ethereum has become the most valued cryptocurrency besides bitcoin. The first blockchain to use smart contracts—code that powers decentralized applications, or dApps—was Ethereum's. More than 1,400 applications and developer tools are available on the Ethereum blockchain, and ether is the network's native coin. Ethereum successfully made the switch from a proof-of-work consensus method to a proof-of-stake transaction verification system in 2023, which requires a much less energy. Ethereum is currently a more environmentally friendly investment than bitcoin, but its blockchain technology is what sets it apart.
3. BNB (BNB)
Capitalization: $33 billion
Return from last year: -23%
One of the biggest cryptocurrency exchanges in the world, Binance, has its own coin called BNB. BNB was initially developed as an ethereum-based utility token that allowed customers to get lower trading costs on the Binance exchange. But since the token moved to Binance's own blockchain, BNB is now used for a variety of transactions, programs, and other use cases. Unfortunately, Binance's market share in the United States decreased in 2023 as a result of the U.S. Securities and Exchange Commission accusing the firm of breaking securities laws and suing the exchange.
4. XRP (XRP)
Market cap: $28 billion
Year-over-year return: 13%
XRP, created by Ripple, is a global payments network designed to be an alternative to the Society for Worldwide Interbank Financial Telecommunications, or SWIFT. SWIFT is the global system banks and other financial institutions use to transfer money. But Ripple claims its technology is faster, cheaper and more transparent than the SWIFT system. XRP is the native cryptocurrency designed for the Ripple network and XRP Ledger blockchain. XRP got a huge boost in July when a judge in the Southern District of New York ruled that the crypto is “not necessarily a security” in certain circumstances, potentially putting it outside the SEC’s jurisdiction.
