Cryptocurrencies: What You Need to Know in 2018
When it comes to cryptocurrencies, bitcoin is the first thing that pops into people’s minds. But there are a lot of other cryptocurrencies out there, and in 2018, they could provide a lot more upside potential than bitcoin.
Bitcoin continues to capture all of the cryptocurrency attention. It was the first cryptocurrency and it has been a gold mine for early investors. Currently trading hands at around $10,550, bitcoin prices have climbed more than 725% since the start of 2017. Since the start of 2016, bitcoin prices have soared more than 1,700%.1
It’s pretty tough to find that kind of growth with stocks. But with those kinds of rewards come the same kind of risks. It’s not uncommon for bitcoin prices to experience double digit swings on any given day.
Cryptocurrencies like bitcoin are also difficult to explain. But the potential for triple and quadruple digit gains is hard to ignore.
Case in point: On May 22, 2010, a bitcoin developer traded 10,000 bitcoins for two large pizzas. It was the very first bitcoin transaction. And quite possibly, for the pizza maker, the greatest investment of all time.
In 2010, those 10,000 bitcoins were worth around $25.00. Fast forward to 2017, and those same bitcoins are now worth $105.5 million!
In March 2013, a Canadian man in Alberta listed his house for sale in exchange for 5,362 bitcoins. At the time, bitcoins were valued at $73.00, this implies a property value of $395,000. If that transaction actually went through, the seller would be sitting on a princely $56.5 million.2
Thanks to the meteoric rise of bitcoin, mining, investing, and trading cryptocurrencies have created unparalleled dreams of wealth. For many, decentralized cryptocurrencies have also usurped gold as the go-to investment to hedge against uncertainty.
With bitcoin trading at $10,500, investors may be wondering if there is any upside potential left or if there are other, less well-known cryptocurrencies, following a similar trajectory.
The fact is, there are a lot of other cryptocurrencies out there. Most don’t deserve your attention though. But the price charts of some look eerily similar to bitcoins in the early days.
Ripple was released in 2012 and trades under the symbol “XRP”. Right now, each token is worth $0.242214 and it is the fourth largest cryptocurrency in the world with a market cap of $9.35 billion. Over the first 11 months of 2017, Ripple’s value has surged more than 3500%.
While bitcoin and Ripple both use the same underlying technology, they operate differently. Unlike bitcoin, which was created to undermine the global banking system, Ripple wants banks to be their customers.
Another cryptocurrency that is in the altcoin shadows is IOTA (MIOTA). It is the seventh largest cryptocurrency in the world by market cap at $2.7 billion and has a value of $0.982491. It is also one of the youngest, having only started traded in June of this year. Since then, IOTA’s value has increased by 53%.
Again, IOTA looks a lot like bitcoin, but its underlying technology is quite different. Where bitcoin uses traditional blockchain technology, IOTA claims to use a “revolutionary” upgrade to blockchain architecture.
IOTA is still in its infancy, is less developed than bitcoin, and, not surprisingly, is more volatile. It will take some time to mature. That said, there is a lot of upside with IOTA.
Bitcoin is king when it comes to cryptocurrencies, but for how long? And what cryptocurrencies could come along and take its place at the top of the altcoin blockchain? Or at the very least, reward investors in 2018 who can stomach the volatility?
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Some people only invest in what they understand. That would put digital coins like bitcoin, Ripple, and IOTA on the back burner. That’s because cryptocurrency is difficult to explain. Fortunately, the trading professionals at Learn-To-Trade.com can help.
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- “Bitcoin Market Cap,” coinmarketcap.com, last accessed November 20, 2017; https://coinmarketcap.com/currencies/bitcoin/
- “Canadian house first on sale for Bitcoin currency,” reuters.com, March 25, 2013; https://www.rt.com/news/house-for-sale-bitcoins-781/
- “Ripple Market Cap,” coinmarketcap.com, last accessed November 20, 2017; https://coinmarketcap.com/currencies/ripple/
- “IOTA Market Cap,” coinmarketcap.com, last accessed November 20, 2017; https://coinmarketcap.com/currencies/iota/
Photo Credit: iStock.com/pinglabel
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