Cryptocurrencies are making quite an impression in the global economic and financial landscapes. In the last couple of years, cryptocurrencies have caused quite a stir on Wall Street because of the impressive gains that they delivered in outperforming all other traditional assets on Wall Street. However, in the year-to-date period, general cryptocurrencies have been struggling to deliver decent gains.
In the chart below, you’ll observe that cryptocurrencies have mostly underperformed the general U.S. equities market. The NYSE Bitcoin index is down by an incredible 42.7% while the S&P 500, NASDAQ, and Dow Jones are marginally down or flat.
However, the current weakness in cryptocurrencies, though not particularly inspiring for current investors; it might present a unique opportunity for investors.
The general cryptocurrency market has lost almost 36% in the year-to-date period. If you haven’t bought into the cryptocurrencies before now, you may want to consider leveraging the current weakness to add a little speculatory exposure to your portfolio by buying on the dip. This piece provides an introductory insight into the top 5 cryptocurrencies by market cap.
Bitcoin (BTC) is the first cryptocurrency to debut and it still retains its position as the most popular and most valuable cryptocurrency in the market. From a humble price of around $0.002, Bitcoin is currently trading around $8,754. In 2017, Bitcoin delivered about 1,420% gains to dwarf the performance the best-performing assets on Wall Street combined.
Bitcoin is essential a decentralized peer-to-peer kind of money designed to eventually replace fiat currencies. The key selling point of Bitcoin is the fact that it is free from government control and influence; hence, inflation can’t erode its value. The price of Bitcoin will technically continue to increase inasmuch as there’s increasing demand because its supply is capped at 21 billion coins.
Ethereum (ETH) is the second most popular cryptocurrency behind Bitcoin and it is the second biggest coin by market cap. In 2017, Ethereum delivered an unbelievable 9200% gain to outperform Bitcoin and other traditional assets. Ethereum debuted as a blockchain-based operating system of sorts by serving as a platform to create smart contracts and DApps (decentralized applications). Ethereum’s value proposition lies in its ability to attract Enterprise clients into the blockchain ecosystem to ultimately drive the mass-market adoption of cryptocurrencies. Many people strongly believe that Ethereum has a better long-term value proposition that Bitcoin because of its Enterprise value.
Ripple (XRP) prides itself on being a frictionless platform for sending money globally by leveraging the decentralized nature of cryptocurrencies. In 2017, Ripple delivered more than 34,000% gains to clinch the spot as the best-performing cryptocurrency of the year. Like Ethereum, Ripple is focusing on being a blockchain solution for Enterprise clients but it is focusing most of its attention on traditional financial institutions such as banks. Ripple is reportedly more efficient, faster, and cheaper means of sending money than the SWIFT network that banks currently use.
Bitcoin Cash (BCH) is simply a nimbler version of Bitcoin that closely represents the original idea that Satoshi Nakamoto had for Bitcoin. BCH was birthed after an internal crisis in the Bitcoin Community made it impossible for the ecosystem to reach a consensus on how to solve some of the biggest problems of the network.
Bitcoin Cash prides itself on a being a smarter way to send money because of its relatively lower transaction fees and faster confirmations. Nonetheless, the fortunes of Bitcoin Cash appear to be tied to Bitcoin. In 2017, Bitcoin cash delivered gains of 343% between when it debuted in July 2017 to the end of the year.
EOS (EOS) is the youngest of all the cryptocurrencies in the top five list; yet, it remains the best performing coin of that class in the year-to-date period. EOS is the brainchild of Block.one and veteran blockchain evangelist Dan Larimer, who had created Steem and Bitshares. If you’re thinking about investing, we recommend reading this guide on how to buy EOS. EOS is simply a revolutionary platform for creating DApps without the technical limitations of the Ethereum network.
To start with, EOS could potentially process 10,000 transactions per second; hence, it’s network could be faster and practically feeless in relation to other DApps platform in the market. EOS also offers the flexibility of freezing and fixing faulty DApps while using a delegated proof-of-stake consensus protocol. Since starting its ICO last year, EOS has delivered 1,076% gains –an incredible performance for a token that is yet to complete its ICO.