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Bitcoin, with its first-mover advantage and robust security, is the best cryptocurrency to invest in today.
There are other cryptocurrencies worth putting some money into - and we'll look at some of those in a moment.
But Bitcoin (BTC) has emerged as the blue chip of the bunch.
In a nutshell, here's why Bitcoin remains the best cryptocurrency to invest in despite all the competition:
- First-mover advantage: Bitcoin is the granddaddy of digital currencies. It gained traction - and notoriety - before most other cryptocurrencies were created. The relatively large user base means Bitcoin benefits from a "network effect." As more people use Bitcoin, its utility increases, which in turn attracts more new users.
- Biggest market cap: The total value of all bitcoins is about $41 billion, more than twice that of second-place Ethereum. It's a reflection of the lofty Bitcoin price, which is about $2,500 now, although it hit $3,000 in June. A large market cap makes it easier for wealthier players to invest, adding to demand that helps push prices higher.
- Capped supply: The code that runs the Bitcoin network specifies that only 21 million bitcoins will ever be created and that the rate of creation declines over time. Nearly 16.5 million bitcoins already have been mined. The tight supply, combined with steadily rising demand, is bound to drive prices up. Most other cryptocurrencies aren't nearly so restrictive in regard to supply.
- Most secure network: The more computing power the network has, the more difficult it is for a hacker to break into it. Lured by the Bitcoin reward - currently 12.5 bitcoins for each block mined - and rising transaction fees, Bitcoin miners have thrown increasing amounts of computing power into the network. That fact, and that it uses the SHA-256 cryptographic protocol designed by the National Security Agency, make Bitcoin virtually unbreakable.
And despite the big gains Bitcoin has enjoyed - more than 180% just in 2017 - it's not too late to invest. The price of Bitcoin is likely to double by the end of the year. And over the next decade or so, the Bitcoin price could reach $100,000 or even $1 million.
Trending: Should I Sell My Bitcoin Now That It's Above $10,000?
But what about Ethereum? The No. 2 cryptocurrency is also a very good bet...
Why Ethereum Is a Good Cryptocurrency to Invest in
Having launched in 2015, Ethereum (ETH) is not only younger than Bitcoin, it's younger than hundreds of other cryptocurrencies.
And yet it quickly surged to the No. 2 spot, giving you some idea of how much potential Ethereum has.
That potential is reflected in the huge gains in the Ethereum price. Even with its recent pullback to just under $200, the price of Ethereum is up 2,300% this year alone.
Some mistakenly believe Ethereum is in a rivalry with Bitcoin, but their differences make them complimentary.
These are also the traits that make Ethereum the next-best cryptocurrency to invest in:
- It's a computer: The Ethereum network can actually run programs on a global scale. These programs are called Dapps (distributed applications). It is this ability that has attracted a lot of attention from major investors as well as many of the world's top tech and financial companies.
- The Enterprise Ethereum Alliance: This consortium of more than 150 companies includes such powerhouses as JPMorgan Chase & Co. (NYSE: JPM) and Microsoft Corp. (Nasdaq: MSFT). The EEA's goal is to harness the Ethereum network's programmability to create "enterprise-grade software." Only launched in February, the EEA has the potential to push the price of Ethereum much higher.
- Foundation of ICOs: Most of the initial coin offerings that have launched over the past year, which can raise millions of dollars in a matter of minutes, have been based on Ethereum. With the ICO trend accelerating, this will be another powerful catalyst for the Ethereum price.
These are the primary reasons why Ethereum price predictions for the end of 2017 go as high as $500.
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Still, some investors want to venture beyond Bitcoin and Ethereum into the wider world of cryptocurrencies...
Investing in Cryptocurrencies: Fantasy vs. Reality
Of the more than 1,000 cryptocurrencies that have been launched, all but 26 trade for under $5.
It's easy for investors to believe a cryptocurrency they pick up for $0.50 each will go to $100 or $1,000 and make them rich, even starting with modest sums of a few hundred dollars.
While not impossible, such an outcome is not likely. Apart from Bitcoin and Ethereum, only a handful of the hundreds of cryptocurrencies out there will enjoy substantial gains.
Think of cryptocurrencies today in terms of the dot-com boom of the late 1990s. Many of the overhyped Internet-based companies of the day went belly up in the dot-com bust of 2000-2001, taking billions of investor dollars with them.
But those with sound business concepts - Amazon.com Inc. (Nasdaq: AMZN), eBay Inc. (Nasdaq: EBAY), and Priceline Group Inc. (Nasdaq: PCLN) - went on to realize the promise of the dot-com hype.
The challenge is to figure out their latter-day equivalents among the cryptocurrencies.
For those willing and able to bear the risk, we've put together this list of the 10 best cryptocurrencies to invest in outside of Bitcoin and Ethereum...
The 10 Best Cryptocurrencies Not Named Bitcoin or Ethereum
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.
Awesome report – exactly what people want to know right now – As always David, you've hit the nail on the head with this report – Great job!
Please could you give me information on how to purchase Crypto currencies? Can this only be done through a Broker account? Or can they be purchased directly with a credit card?
Cannot be bought through any brokerage account-yet. You must buy bitcoin first then buy other currencies with bitcoin. Buy bitcoin through private person or an exchange like Coinbase allows you to deposit fiat USD to buy bitcoin via CCard or bank account
I have used Coinbase.com for 6 months on someone's suggestion. It has worked for me and they don't charge huge service prices. They will be accepting bitcoin cash in January. they have the customer security in mine.
I would suggest to have a private wallet like Blockchain Wallet to keep things safe.
Can you tell me more about ONECOIN
Onecoin was a scam. Which is why investors need to be cautious about which cryptocurrencies they buy.
-Dave Zeiler, Associate Editor, Money Morning.
Hi Dave,
Any word on Plexcoin?? Worth it or another Scam?
Dhruv,
Canadian regulators shut down the Plexcoin websites. It appears to be a scam. I recommend that investors interested in putting money into cryptocurrencies stick with the top 20 or 30 names and avoid the rest. And approach ICOs with caution. Hopefully we'll get more clarity from the SEC on IPOs within the next year. Until then, they represent excessive risk.
-Dave Zeiler, Associate Editor, Money Morning
hi, what are the 10 Best Cryptocurrencies Not Named Bitcoin or Ethereum? i don't find them on the page
thank you,
how long should you hold on to these coins
As long as you can.. Treat it as a long term investment. It will go up and down and the long term is up.
Christella,
I would say two to three years at minimum. Cryptocurrency is at a very early stage. IT may take longer, say five to seven years, for many of these cryptocurrencies to realize their potential.
-Dave Zeiler, Associate Editor, Money Morning
I'm interested in buying or investing in cryptocurrency. Need info and guidance to proceed.
Verry well
How do I buy crypto currecies when in Africa,Uganda to be specific. I don't want to be left behind when the 10 year prediction comes to pass! Please advice.
Guda,
Buying Bitcoin and other cryptocurrencies in many developing countries can be difficult because of the scarcity of places where local currency can be exchanged for cryptos. Apparently Paxful is one place to obtain Bitcoins in Uganda. Or if you have BitPesa, you can use that. Or you can use localBitcoins, but that means you'll have to meet up with another Bitcoin user in person and buy from them. However, once you have obtained Bitcoin you should be able to transfer that to a cryptocurrency exchange like Poloniex or Bittrex. There you'll have access to many cryptos.
Good luck.
-Dave Zeiler, Associate Editor, Money Morning
Great article Dave, well organized! I wonder what do you think about Publica.io – they are building a platform that aims to bring the publishing economy into the blockchain revolution.
John,
I've always thought that publishing is a great use case for blockchain technology. Time will tell if Publica has the answer. I'm also following the Brave browser project, which incorporates the Basic Attention Token (BAT) in a similar way.
-Dave Zeiler, Associate Editor, Money Morning
Good question.
I like to learn about Bitcoin
i like to invest in Cryptocurrency
any thoughts on GVT, OMG, EOS, LUNYR?
I put $9,000 into USIUSA-Int, they've seemed to have stopped giving those of us who invested in them their money back, after running in to problems, supposedly because those of us in Europe and the USA were overselling the product. Can you give me any insight into this company, as they say they are going to honor their promises because they don't want anyone to be hurt by the problem they said they had, (and maybe their on the up and up), and I don't know if I should buy other bitcoin to make certain I don't loose out completely, or trust them.
Thanks,
Steve
Steven,
Thanks for reading Money Morning. I had not heard of USI USA before, but it appears to be a Ponzi scheme. See this article. I'm afraid your money may have been stolen. Sorry I can't provide better news.
Dave Zeiler, Associate Editor, Money Morning
What’s the best crypto to buy right now apart from BTC and ETH ?