Strongly Coming Digital Currency
The courage and confidence of the initial Bitcoin investors enabled them to reap huge profits as the asset grew and prospered. Now let’s get to know the next digital currency.
Cryptocurrency may have started as a type of high-risk investment with questionable validity and reliability, but in recent years it has been able to prove itself as one of the best types of investment and ways to reap quick and large profits. The digital currency market has boomed a lot in terms of prices and market capitalization, especially with the leading Bitcoin currency despite the great fluctuations that you know. Many institutional investors and major banks have begun to deal with this currency as a very serious asset, despite the fluctuations that it witnessed at the beginning of this year and the regulatory campaigns against it in China and some other countries.
In 2021, Bitcoin was able to achieve a very qualitative price jump, as it moved from the level of $28,893.62 to its all-time high of $68,789.63. This volatility, which supports reaping large profits and multiplying gains, is what always drives investors to search for the next digital currency that will cause an explosion in prices.
What is the next digital currency?
There are many digital currencies that have high growth potential that makes them eligible to be the next digital currency. Here is a list of these currencies:
Ethereum is the second largest cryptocurrency in the world after Bitcoin, even outperforming Bitcoin itself over the past year in terms of price gains, according to CoinTelegraph. Last year, Ethereum experienced a major update that included a supply reduction of 119.35 billion coins. This update also allows the Ethereum network to execute more transactions per second, improve platform scalability, and lower transaction fees.
Compared to Bitcoin, Ethereum lacks scarcity and the supply of Bitcoin has been fixed at only 21 million coins, making it the best store of value while gaining widespread acceptance by businesses and governments. However, unlike Bitcoin, Ethereum is not just a store of value. It is also a basic infrastructure on which applications can be created and developed and it also houses many cryptocurrencies, US News has reported that there are many other cryptocurrencies being issued on the Ethereum network. This makes it a foundation for decentralized finance.
Binance is the most successful digital exchange in terms of trading volumes. Like bitcoin, bitcoin, the official currency of the Binance platform, maintains a set number of coins in circulation, and has a supply of 200 million coins. This helped the coin’s price increase significantly in 2021. In addition, Binance puts about a fifth of its profits each quarter into the process of permanently dumping or “burning” BNB coins which drives up the value of remaining Binance coins.
The Binance network has two types of blockchains and this reduces the pressure experienced by the Ethereum network. It’s also fast and scalable, and Binance is working to make its coin platform more regulatory-friendly, a feature that could be critical to support its viability and widespread adoption.
Tether is a type of “stablecoin” designed to provide a less volatile alternative to Bitcoin because it is pegged to a real-world currency. In the case of Tether, it is pegged to the US dollar. In terms of valuation, one Tether coin represents the value of one dollar. This means that it is less volatile and volatile than other currencies such as Bitcoin and Ethereum. With a market capitalization of $78.182 billion, it is the largest digital stablecoin and the third largest digital currency overall.
The big advantage of Tether is that it allows you to perform digital transactions with traditional currencies instead of having to dive into the details of complex cryptocurrency transactions. You can also lend them to crypto platforms at double-digit interest rates (annually) without worrying about fluctuations that can lead to losses.
Decentraland is a virtual reality game based on the Ethereum blockchain. MANA is used as the game’s internal currency, with which users and players can purchase goods and services, buy land, visit other players, and create and invest in their own properties. MANA’s current price of $3.29 represents an increase of more than 2% from what it was at its inception.
MANA is the second largest gaming cryptocurrency by market capitalization. Although it has strong competition from other gaming currencies such as The Sandbox, Axie Infinity and other expensive assets, it has many advantages that may push its price forward. For example, users retain ownership of the digital assets they create in Decentraland in the form of non-fungible tokens, revolutionizing the gaming industry.
Algo, which was founded by the famous computer scientist Silvio Micali, has positioned itself as a strong competitor to Ethereum. Many companies use this coin and this coin got a big boost last year when El Salvador said it would build its infrastructure on the blockchain using Algorand. Recently, venture capital firm Borderless Capital launched a $500 million fund to invest in digital assets that support decentralized applications in Algorand, Blockworks reported. In addition to this, the Marshall Islands central bank’s digital currency, Sovereign (SOV), also uses Algorand.
One of the biggest advantages of ALGO is its Proof of Stake algorithm, which offers a high degree of security, scalability, and requires less electricity than Bitcoin and other platforms. This feature will become more important as other currencies start to get more criticism and potentially strict regulation – for their huge power consumption.
How do I know and determine the next digital currency?
Before you start trying to figure out which cryptocurrency could be the next big winner, it’s a good idea to first understand why so many investors are attracted to cryptocurrencies in the first place. This mainly relates to a fundamental change in how people are beginning to perceive digital assets, said Jeff Dorman, chief investment officer at Arca, a financial services firm that specializes in digital assets. He then added that he believed that the world had entered a real transition towards digital assets, as the evolution shifted from an analog world to a digital world during the COVID-19 pandemic and is likely to remain so forever.
Dorman also says that this asset class has “now evolved far beyond cryptocurrencies,” as we are now starting to talk about decentralized finance, non-fungible tokens, and a wide range of other digital investment vehicles.
When trying to determine the next big cryptocurrency, there are two things you should keep an eye on as a stock investor should. Here we are talking about market value and price.
The market capitalization shows the amount that has been invested in a particular network. As a general rule, the higher the market value, the more stable the asset. Although this also means that the currency has less room to grow. It is also important to monitor the price to determine whether investors are going bullish or bearish in the cryptocurrency you are investigating.
How do I buy digital currencies?
Buying cryptocurrency is relatively easy. Here’s how to do it in a few steps:
First, open an account on one of the cryptocurrency exchanges:
You will have to open a trading account, just as you open a brokerage account to trade stocks. You can choose from a wide range of digital platforms such as Coinbase, Binance.US, and Gemini, which match buyers with sellers or you can even choose a broker like Robinhood or SoFi, who take on the task of executing trades for you. Interchange fees are usually low on digital exchanges, but they also feature complex interfaces. Brokers have much simpler interfaces, but may charge higher fees and offer a limited range of cryptocurrencies.
Second, fund your account:
Before you can trade cryptocurrencies, you will need to select a method to pay for your purchases, such as a linked bank account, wire transfer, debit card, or credit card.
Third, place your buy or sell order:
Select the cryptocurrency you want to buy and select the number of coins you want to buy. To buy fractional shares of cryptocurrency, specify a dollar amount instead of the number of coins.
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