Narrowing down the best cryptocurrency to buy in 2018 depends on how deep into the crypto roster you're willing to go.
Investing in cryptocurrencies is already a highly risky proposition - any one of them could quickly collapse to zero - but the more established cryptocurrencies such as Bitcoin, Ethereum, and Ripple are somewhat less risky.
And while these better-known cryptocurrencies are expected to rise significantly in 2018, they aren't likely to deliver the kind of percentage gains they delivered in 2017. Bitcoin rose 1,318% last year, Ethereum 9,162%, and Ripple a stunning 36,018%.
But some of the newer cryptocurrencies could achieve similarly monster gains, particularly those that trade for relatively low prices (in many cases under $1). Plus, it's wise to diversify your crypto holdings just in case one does suffer an epic collapse.
To determine the best cryptocurrencies to invest in, I've looked for those with the strongest use cases and those with the best prospects to appreciate over the course of the year.
Today, 11 out of the 12 are winners - most of them big winners. Monero has led the way; it's now more than 6.5 times its July 28 price. The smallest gainer was Golem, which is up 50%. The only loser was Gnosis, which is down 34%.
Had an investor put $100 into each of those cryptocurrencies then, for a total initial stake of $1,200, they'd now have $3,859 - a gain of 221.6%.
With that in mind, here are my top 10 cryptocurrencies for this year - five re-recommendations from my July list, and five new ones...
The 10 Best Cryptocurrencies to Buy in 2018
Bitcoin (BTC)
Year launched: 2009
Feb. 22 price: $10,100
Market cap: $169.7 billion (Rank: 1)
Monthly volume in U.S. dollars: $250.9 billion (Rank: 1)
Where to trade it: Bitfinex, GDAX, Bitstamp, Kraken, Bittrex, Binance, Gemini, Poloniex
Key feature: As the first cryptocurrency, Bitcoin has the most secure network and the best-known "brand."
Use case(s): The relative scarcity of Bitcoin and its robust network have made it a "store of value," akin to gold. But new technologies in development, such as Lightning, will make Bitcoin viable for everyday transactions again. And many businesses planning to use blockchain technology may need to revisit the Bitcoin network because of its unmatched security.
December 2018 price estimate: Bitcoin price predictions for this year range from $24,000 to $250,000. A Finder.com survey of several experts puts the average at $43,472, which I consider very reachable.
Monthly volume in U.S. dollars: $100.6 billion (Rank: 2)
Where to trade it: Bitfinex, GDAX, Bitstamp, Kraken, Bittrex, Binance, Gemini, Poloniex
Key feature: Ethereum is Turing complete, which means it can function as one giant global computer.
Use case(s): Ethereum's ability to function as a computer means it can run "distributed applications," or "Dapps." Ethereum is also the foundation of many other cryptocurrencies that have launched via initial coin offerings (ICOs).
December 2018 price estimate: Building on last year's momentum, it's likely the Ethereum price will at least double to $1,800-plus. The respondents to the Finder.com survey were more optimistic, with an average prediction of $3,083 by year's end.
Ripple (XRP)
Year launched: 2012
Feb. 22 price: $0.937
Market cap: $36.55 billion (Rank: 3)
Monthly volume in U.S. dollars: $42.9 billion (Rank: 4)
Where to trade it: Bitfinex, Bitstamp, Kraken, Bittrex, Binance, Poloniex,
Key feature: Ripple offers banks a way to settle cross-border payments in real time.
Use case: Naturally, the ability to streamline cross-border payments to save time and money appeals to banks and large financial institutions. An increasing number of banks are experimenting with Ripple to see how it could be used to integrate the tech into their money transfer operations.
December 2018 price estimate: Ripple benefits from its low price, which lowers the psychological barrier for investors. But the large supply - 30 billion coins - restricts how high it can go. Still, XRP traded as high as $3.75 in early January. Ripple should at least get up to $2.50 by the end of the year and has a good chance to revisit those January highs.
Litecoin (LTC)
Year launched: 2011
Feb. 22 price: $197.3
Market cap: $10.9 billion (Rank: 5)
Monthly volume in U.S. dollars: $24.38 billion (Rank: 5)
Where to buy/trade it: Poloniex, Bittrex, Bitstamp, Kraken, Bitfinex, Coinbase, Binance
Key feature: Litecoin is an adaptation of Bitcoin's code base but designed for faster payments, higher transaction capacity, and near-zero fees.
Use case: Litecoin's features were targeted at making it ideal for day-to-day use. It's about to get a leg up on all other cryptos when LitePay launches on Feb. 26. LitePay makes it possible to spend Litecoin with a Visa-compatible pre-paid card. Because of its similarities to Bitcoin's code, Litecoin has also become a de facto test bed for new Bitcoin technologies like SegWit and Lightning.
December 2018 price estimate: The Litecoin price got a recent boost from the successful Litecoin Cash hard fork. But LTC will be energized by LitePay and other developments, pushing it at least to $400, with $500 possible.
Monero (XMR)
Year launched: 2014
Feb. 22 price: $286
Market cap: $4.5 billion (Rank: 11)
Monthly volume in U.S. dollars: $2.33 billion (Rank: 24)
Where to trade it: Poloniex, Kraken, Bitfinex, Bittrex, Binance
Key feature: Monero was specifically created to facilitate untraceable, truly anonymous transactions.
Use case: While this has appeal to libertarians and other anti-government folks, it has obvious uses for criminals and black markets. In some recent ransomware attacks, the hackers demanded to be paid in Monero, not Bitcoin. Proponents of XMR say its anonymity has legitimate applications, such as a business wanting to hide a particular transaction from the prying eyes of competitors.
December 2018 price estimate: The Monero price average on Finder.com is $450, with the highest estimate coming from Joseph Raczynski, the technology manager at Thomson Reuters, who's calling for an XMR price of $650.
Now let's take a look at my five new cryptocurrency recommendations, one of which could soar as much as 13,400% in 2018...
Monthly volume in U.S. dollars: $9.67 billion (Rank: 10)
Where to trade it: Bitfinex, Bittrex, Binance
Key feature: Like Ethereum, China-based Neo is Turing complete, which means it can run smart contracts and Dapps. But it also has a built-in identity feature that enables new uses while making the cryptocurrency more appealing to an authoritarian Chinese government uncomfortable with anonymous transactions.
Use case: Neo is designed to be the foundation for many projects related to cryptocurrency. And because the developers appear to have the tacit blessing of the Chinese government, Neo is likely to become the focal point of blockchain tech in China.
December 2018 price estimate: The Finder.com consensus puts the Neo price at $294, although one participant, Spendher founder Skye Dunworth, sees it going as high as $500.
Stellar (XLM)
Year launched: 2014
Feb. 22 price: $0.3667
Market cap: $6.77 billion (Rank: 8)
Monthly volume in U.S. dollars: $6.42 billion (Rank: 14)
Where to trade it: Bittrex, Binance, Poloniex, Kraken
Key feature: Stellar's transactions close in seconds at fractions of a penny, and the network allows users to convert fiat currencies, such as euros, to U.S. dollars.
Use case: International Business Machines Corp. (NYSE: IBM) has adopted Stellar as part of a project to create a cross-border payment network. This highly adaptable crypto also has much potential as a platform for ICOs.
December 2018 price estimate: The Finder.com consensus is $0.66. Raczynski thinks the Stellar price could reach $1.10 this year.
NEM (NEM)
Year launched: 2015
Feb. 22 price: $0.418
Market cap: $3.76 billion (Rank: 13)
Monthly volume in U.S. dollars: $1.99 billion (Rank: 28)
Where to trade it: Bittrex, Poloniex
Key feature: Not only is NEM designed for scale and speed, it's "Smart Asset System" is customizable, making it easier for developers to adapt it to multiple uses.
Use case: NEM's suggested use cases on its website include financial payments, mobile payments, a settlement layer for equity markets, and escrow services.
December 2018 price estimate: The NEM price consensus at Finder.com is $1.51, more than three times the current price.
IOTA (MIOTA)
Year launched: 2017
Feb. 22 price: $1.61
Market cap: $4.47 billion (Rank: 12)
Monthly volume in U.S. dollars: $1.75 billion (Rank: 31)
Where to trade it: Bitfinex, Binance
Key feature: The German-based IOTA is the rare cryptocurrency that dispenses with the blockchain, opting instead for a technology called "Tangle." To conduct a transaction on the IOTA network, a device first needs to verify two randomly chosen existing transactions. Thus the cost of making an IOTA transaction is near zero and actually reduces with scale.
Use case: IOTA's ability to swap data across the Internet at scale means it is ideally suited to serve as a conduit for the Internet of Things, which envisions the day when most if not all the electronic devices are connected to each other - and share data - through the Internet. So far, 35 companies are experimenting with IOTA, including T-Mobile U.S. (Nasdaq: TMUS) and Accenture Plc. (NYSE: ACN).
December 2018 price estimate: WalletInvestor.com has forecast an IOTA price of about $5.75, a gain of more than 250%.
Cardano (ADA)
Year launched: 2017
Feb. 22 price: $0.3347
Market cap: $8.67 billion (Rank: 6)
Monthly volume in U.S. dollars: $15.1 billion (Rank: 8)
Where to trade it: Bittrex, Binance
Key feature: Cardano is a third-generation cryptocurrency. It has a robust proof-of-stake system to verify transactions and stores data associated with a transaction in a separate layer of code. It's also designed to combine privacy with regulation. These features make Cardano faster, more efficient, and capable of handling more sophisticated transactions than Bitcoin and other cryptocurrencies.
Use case: The Cardano team says it has designed this crypto to run financial applications for individuals, organizations, and governments. The roadmap has Cardano running distributed applications and running smart contracts, but more efficiently than cryptocurrencies like Ethereum.
December 2018 price estimate: Cardano is just getting started, so there is huge potential here. The Finder.com consensus for the Cardano price is $10.63 - a 3,000% gain. Sky Dunworth thinks it could hit $50, which would be a gain of more than 14,800%.
Man Crushes S&P 500... Now He's Taking on Crypto
Last year, Tom Gentile used his pattern-trading software to help give his readers a shot at beating the S&P 500.
Now he's using that technology to help pinpoint recommendations in a market that grew 164 times faster than stocks: cryptocurrencies.
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.