FTX Token (FTT)
Investing in nascent industries is notoriously difficult: During the dot-com bubble, countless promising companies ended up crashing and burning – you were much more likely to put your money in the equivalent of a Pets.com or a GeoCities, both of which failed miserably, than a success story like Amazon.com Inc. (AMZN) or PayPal Holdings Inc. (PYPL). Even despite 2022’s sell-off, crypto seems destined to be around for a while, and by extension, so will crypto trading. FTT, the native token of the FTX cryptocurrency derivatives exchange, is like BNB in that it’s another way to bet on the growth of the evolving crypto trading environment. Owning a little BNB and FTT gives investors less focused exposure to a growing pie via two early leaders in the area. Crypto derivatives, where FTX specializes, have the opportunity to become truly gargantuan if traders take to them like they have derivatives on other assets: a market already worth tens or possibly hundreds of trillions of dollars.
Last and least by market cap is STEPN, which earns a spot as one of the best cryptocurrencies to buy in part due to its relative newness. With a market cap around $675 million on May 12, the currency, whose ticker is GMT, would be small enough to qualify as a small-cap stock if it were an equity. GMT is unique because it’s a move-to-earn token that incentivizes real-world exercise by rewarding users with tokens. You must buy digital sneakers in the form of a non-fungible token, then level up (through physical movement and subsequent accumulation of utility token GST) those sneakers to Level 30 before receiving GMT for your sweat equity. Whether move-to-earn tokens are a fad or here to stay remains to be seen, but one thing is certain: GMT is sharply higher from its debut price mere months ago. The tradeable GMT launched March 9 at less than 14 cents per coin. By May 12, even after giving up a lot of its gains, that price had already soared eightfold to $1.12.
Binance Coin (BNB)
Excluding stablecoins, Binance Coin, or BNB, is the third-largest cryptocurrency by market cap. The market cap stood around $45 billion on May 12. BNB offers investors a nice way to bet on the flourishing Binance ecosystem, which includes the world’s largest cryptocurrency exchange. Binance is off to an early – and commanding – lead in the buying and selling of digital assets, with May data showing trailing 24-hour volume of more than $47 billion, compared with about $8 billion in trailing volume for the likes of Coinbase Global Inc. (ticker: COIN). A deflationary token, 99% of BNB’s maximum supply is already in circulation, and Binance also burns a percentage of BNB-based transaction fees on its network.
The native cryptocurrency of the Ethereum blockchain is called Ether, or ETH. After hitting an all-time high of $4,891.70 in November 2020, the second-most-dominant cryptocurrency in the world has come back to earth, bouncing around the $3,000 level before plunging below $2,000 in the recent sell-off. The most actively used blockchain in the world, Ethereum pioneered the idea of decentralized finance, or DeFi – a disruptive new system of finance that cuts out traditional intermediaries and middlemen like banks, brokers and centralized exchanges. Although a number of upstart rivals are gunning after Ethereum’s leadership position, Ether is one of the best cryptocurrencies to buy now not only because of the wide adoption of its network, but also because of the upcoming event known as “The Merge.” Once known as Ethereum 2.0, The Merge is expected to launch in the second half of 2022 and will bring the current Mainnet Chain together with the Beacon Chain, changing the network from the expensive, slow and energy-intensive proof-of-work protocol to the far more efficient proof-of-stake system. This should hypothetically help re-accelerate the Ethereum ecosystem and buoy Ether.
Unlike stocks, cryptocurrencies don’t have underlying revenue or earnings that investors can use to arrive at a valuation. This makes things like the cachet of founders and a project’s mission important factors in determining whether any given crypto is worth buying. Celo, a layer-1 blockchain, was created in 2020 by a team of folks from prominent academic and corporate institutions, including the Massachusetts Institute of Technology, Harvard, Block Inc. (SQ) and Bank of America Corp. (BAC). Celo’s mission is arguably the project’s most impressive feature: Celo is aimed at expanding blockchain access for smartphone users in an effort to bring decentralized finance to areas with little computer access or banking options but solid smartphone penetration. Celo uses a proof-of-stake system, with participants using phone numbers as public keys. The coin has a roughly $690 million market cap as of May 12.
Among the world’s top cryptocurrencies to buy, it’s essentially Bitcoin, Ether and then everything else. Among the so-called altcoins – everything outside of BTC – is where the big opportunity lurks, and Ethereum competitor Solana is a promising up-and-comer that’s managed to muscle into the world of DeFi and claim meaningful market share. Many currencies are built on top of the dominant Ethereum network, but not Solana, which has its own blockchain that uses the native SOL token. While BTC debuted in 2009 and ETH in 2015, SOL is just a baby, having debuted in 2020. The following year, Solana took the world by storm, soaring from about $1.50 to more than $170 by the end of 2021. Things have cooled off dramatically since then, with SOL at around $45 on May 12. Still, Solana’s low transaction fees should continue to poach users from Ethereum until The Merge is complete.
Created in 2009 by someone under the pseudonym Satoshi Nakamoto, Bitcoin (BTC) is the original cryptocurrency. As with most cryptocurrencies, BTC runs on a blockchain, or a ledger logging transactions distributed across a network of thousands of computers. Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, Bitcoin is kept secure and safe from fraudsters.
Bitcoin’s price has skyrocketed as it’s become a household name. In May 2016, you could buy a Bitcoin for about $500. As of March 1, 2022, a single Bitcoin’s price was over $44,000. That’s growth of about 7,800%.
Unlike some other forms of cryptocurrency, Tether is a stablecoin, meaning it’s backed by fiat currencies like U.S. dollars and the Euro and hypothetically keeps a value equal to one of those denominations. In theory, this means Tether’s value is supposed to be more consistent than other cryptocurrencies, and it’s favored by investors who are wary of the extreme volatility of other coins.
Terra is a blockchain payment platform for stablecoins that relies on keeping a balance between two types of cryptocurrencies. Terra-backed stablecoins, such as TerraUSD, are tied to the value of physical currencies. Their counterweight, Luna, powers the Terra platform and is used to mint more Terra stablecoins.
Terra stablecoins and Luna work in concert according to supply and demand: When a stablecoin’s price rises above its tied currency’s value, users are incentivized to burn their Luna to create more of that Terra stablecoin. Likewise, when its value falls compared to its base currency, this encourages users to burn their Terra stablecoins to mint more Luna. As adoption of the Terra platforms grows, so too does the value of Luna.
From Jan. 3, 2021, when its price was $0.64, to the beginning of March 2022, Luna has risen over 14,200% to $92.
Created by some of the same founders as Ripple, a digital technology and payment processing company, XRP can be used on that network to facilitate exchanges of different currency types, including fiat currencies and other major cryptocurrencies.
At the beginning of 2017, the price of XRP was $0.006. As of March, 2022, its price reached $0.80, equal to a rise of more than 12,600%.