Cryptocurrencies are a highly volatile asset class, and while they may present opportunities for astute investors, they remain a regulatory grey area and thus an arena for scams and hackers.
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Nevertheless, Australians are crypto-curious. According to consumer group CHOICE, almost one in five Aussies are either involved in some form of cryptocurrency trading or are interested in getting involved. Those who steer clear from crypto often do so because of the risk of crypto scams. Some 4.6 million Australians own cryptocurrency, and Australia ranks third in the world for crypto uptake.
From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies, each with different strengths, weaknesses and varying degrees of potential.
These are the top 10 cryptocurrencies based on their market capitalisation or the total value of all the coins currently in circulation. This is not a recommendation of what you should or should not buy; it is merely a list of the largest projects ranked by market capitalisation so you can get a sense of the playing field before you decide whether to roll the dice and invest in crypto.
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Related: Best Cryptocurrency Exchanges for Australians
What Are Cryptocurrencies?
A cryptocurrency is a digital asset that can circulate without the centralised authority of a bank or government. According to CoinMarketCap, there are more than two million cryptocurrency projects out there that represent the entire $US1.76 trillion crypto market.
1. Bitcoin (BTC)
- Market cap: $US896 billion
Created in 2009 by Satoshi Nakamoto, Bitcoin (BTC) is the original cryptocurrency. As with most cryptocurrencies, BTC runs on a decentralised blockchain technology, which is 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 one Bitcoin for about $US500. As of January 2, 2024, a single Bitcoin’s price was around $US45,800. That’s a growth of more than 9,060%.
Related: How To Buy Bitcoin
2. Ethereum (ETH)
- Market cap: $US290billion
Both a cryptocurrency and a blockchain platform, Ethereum is a favourite of program developers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).
Ethereum has also experienced tremendous growth. From April 2016 to the January 2024, its price went from about $US11 to around $US2,416, increasing around 21,863%.
Related:How To Buy Ethereum
3. Tether (USDT)
- Market cap: $US92 billion
Unlike some other forms of cryptocurrency, Tether (USDT) is a stablecoin pegged to the value of US$1. This is achieved by having a 1-1 backing between the token and USD which hypothetically keeps a value equal to one of those denominations because one token should always be able to be redeemed for one dollar. In theory, this means Tether’s value is supposed to be more consistent than other cryptocurrencies, and it’s favoured by investors who are wary of the extreme volatility of other coins.
4. Solana (SOL)
- Market cap: $US50 billion
Solana is a high-performance blockchain platform designed to provide fast and scalable transaction processing. It utilises a unique consensus algorithm called Proof of History, which allows it to process up to 65,000 transactions per second, making it one of the fastest blockchain networks available today. The platform supports smart contracts and decentralised applications (dApps) and is extremely popular for NFT trading.
The native token of the Solana platform is called SOL, and is used for paying transaction fees, staking, and participating in governance decisions on the network. The ICO price for SOL was $US0.22, and as of January 2, 2024, now sits at $US116, an increase of 52,627%.
5. Binance Coin (BNB)
- Market cap: $US48.5 billion
Binance Coin (BNB) is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform. Now, it can be used for trading, payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.
BNB’s price in 2017 was just $0.10. By January 2, 2024, its price had risen to around $US319, a gain of approximately 318,900%.
Related: Cryptocurrency Glossary Of Terms
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6. XRP (XRP)
- Market cap: $US34.5billion
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 $US0.006. As of the start of January 2024, its price reached $US0.638, equal to a rise of 10,533%.
Related: Ethereum 2.0: The Ethereum Merge Explained
7. U.S. Dollar Coin (USDC)
- Market cap: $US24.7billion
Like Tether, USD Coin (USDC) is a stablecoin, meaning it’s backed by US dollars and aims for a 1 USD to 1 USDC ratio. USDC is available on numerous blockchains, such as Ethereum and Solana, and you can use USD Coin to complete global transactions.
8. Cardano (ADA)
- Market cap: $US22.3 billion
Somewhat later to the crypto scene, Cardano (ADA) is notable for its early embrace of proof-of-stake validation. This method expedites transaction time and decreases energy usage and environmental impact by removing the competitive, problem-solving aspect of transaction verification in platforms like Bitcoin. Cardano also works like Ethereum to enable smart contracts and decentralised applications, which ADA, its native coin, powers.
Cardano’s ADA token has had relatively modest growth compared to other major crypto coins. In 2017, ADA’s price was $0.02. As of January 3, 2024, its price was at $0.63. This is an increase of 3,050%.
9. Avalanche (AVAX)
- Market cap: $15.8 billion
Avalanche is a high-speed blockchain platform for decentralised apps (dApps) and custom networks. The project’s goal is to surpass Ethereum in smart contract popularity. With the ability to handle up to 6,500 transactions per second, it can handle significantly more throughput than Ethereum due to it’s unique structure, which features three specialised blockchains. These chains, which are known as the X-Chain, C-Chain and P-Chain, are designed to handle different tasks, unlike the one-size-fits-all approach of Bitcoin and Ethereum.
Since its 2020 launch, Avalanche has been expanding its ecosystem with DApps and DeFi projects, including partnerships with Ethereum-based projects like SushiSwap and TrueUSD, and enhancing its connection with other blockchains through bridge developments.
From its initial ICO price of $0.5, AVAX stands at US$43.16 as of January 2nd 2024, up over 8,532%.
10. Dogecoin (DOGE)
- Market cap: $US13.3 billion
Dogecoin was famously started as a joke in 2013 but rapidly evolved into a prominent cryptocurrency thanks to a dedicated community and creative memes. Unlike many other cryptos, there is no limit on the number of Dogecoins that can be created, which leaves the currency susceptible to devaluation as supply increases.
Dogecoin’s price in 2017 was $0.0002. By the start of January 2024, its price sat at $0.093, up 46,400%.
*Market caps and pricing sourced from coinmarketcap.com, current as of January 2024
This article is not an endorsem*nt of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.
Frequently Asked Questions (FAQs)
What are cryptocurrencies?
Cryptocurrency is a form of currency that exists solely in digital form. Cryptocurrency can be used to pay for purchases online without going through an intermediary, such as a bank, or it can be held as an investment.
Do you have to pay taxes on cryptocurrency?
If you buy and sell coins, paying attention to cryptocurrency tax rules is important. Cryptocurrency is treated as a capital asset, like stocks, rather than cash, which means that you need to pay your marginal tax rates on the crypto when you register your return with the ATO. It also means that if you sell cryptocurrency at a profit, you’ll have to pay capital gains tax. You can read our guide to crypto and tax in Australia.
Don’t succumb to the misconception that cryptocurrencies are anonymous and can’t be tracked. The ATO has data-sharing agreements with all exchanges in Australia, giving them access to the list of taxpayers who own and trade cryptocurrency. Transferring from an exchange to a wallet is also relatively simple to track due to the public nature of blockchain data.
How do you buy crypto?
You can buy cryptocurrencies through Australian-based crypto exchanges, such as CoinSpot and Swyftx or platforms such as eToro Australia. You can read our review of the Best Exchanges for Australians in 2023.
What are altcoins?
When we first think of crypto, we usually think of Bitcoin first. That’s because Bitcoin represents more than 45% of the total cryptocurrency market. So when we talk about any cryptos outside of Bitcoin, all of those cryptos are considered altcoins.
Ethereum, for instance, is regarded as the most popular altcoin.
What are the 3 most popular cryptocurrencies?
Here are the top three cryptocurrencies by market capitalisation as of January 2024:
- Bitcoin (BTC): The original cryptocurrency, Bitcoin continues to hold its position as the market leader. With its price standing at around US$45,800, it boasts a market capitalisation of US$895 billion. Its widespread acceptance and status as digital gold make it a cornerstone of the crypto market.
- Ethereum (ETH): Ethereum has firmly established itself as the second most popular cryptocurrency, thanks to its versatile platform that enables decentralized applications (DApps) and smart contracts. Priced at US$2,400, its market capitalisation sits at US$290 billion. Its ongoing developments and widespread use for DeFi and NFTs contribute to its strong position.
- Tether (USDT): Tether stands out as the most popular stablecoin, pegged to the US dollar to maintain a consistent value of US$1. With a market capitalization of US$91.7 billion, it’s a favourite among investors looking for stability in the often volatile crypto market. Its primary use is to provide a stable currency for trading and hedging in the crypto space.
These cryptocurrencies represent the forefront of the digital asset world, each with unique attributes that cater to different needs and preferences within the market. Whether you’re looking for a store of value, a platform for innovation, or stability, these top three cryptocurrencies offer something for every investor.
Why is Bitcoin valuable?
Part of what makes Bitcoin so valuable is its scarcity. Bitcoin’s maximum supply is limited to 21 million coins. Currently, there are 19 million coins in circulation.
To create supply, Bitcoin rewardscrypto minerswith a set Bitcoin amount. (To be exact, 6.25 BTC is issued when a miner has successfully mined a single block.). To keep the process in check, the rewards given for mining Bitcoin are cut in half almost every four years.
Which cryptocurrency is the most profitable right now?
The cryptocurrency market is highly unpredictable and extremely volatile, with some tokens doing well one day and then falling rapidly the next.
Because of this, the most profitable cryptocurrency changes constantly. Once a cryptocurrency increases drastically in value, buying into the project expecting further gains is not always the best idea.
The profitability of investing in cryptocurrencies is affected by market conditions, supply and demand, regulatory changes, technological developments, and how you manage your investments. It is important to do your own research (DYOR) and consult with a trusted financial advisor before making any investment decisions.
Will crypto explode in 2024?
The future performance of cryptocurrencies is uncertain and depends on various factors, including the recent regulatory uncertainty surrounding the crypto space, as well as the unstable economic climate characterised by high levels of inflation and rising interest rates.
While some investors are optimistic about the potential growth of the crypto market despite these challenges, others may be more cautious or sceptical. It’s important to note that the performance of cryptocurrencies is generally volatile and unpredictable, and is often significantly impacted by external factors beyond the digital asset space. It is essential for anyone interested in this space to conduct thorough research and, if necessary, consult with a financial advisor before making any investment decisions.
How do I know which cryptocurrencies to invest in?
Figuring out which cryptocurrencies to invest in can be quite a challenge, but there are some steps you can take to increase your chances of choosing a more promising project. To make well-informed decisions, it’s essential to:
- Get familiar with cryptocurrency and blockchain technology—understanding the fundamentals is key.
- Dive into research on various cryptocurrencies, their purposes, and the dedicated teams behind them.
- Keep an eye on market sentiment and the long-term potential of each cryptocurrency you’re considering.
- Stay in the loop with the latest news, regulatory updates, and technological breakthroughs in the crypto world.
- Reflect on your personal risk tolerance and investment goals to ensure you make the right choices for you.
Don’t hesitate to consult with a financial advisor if you’re new to crypto investing or have specific concerns about your investment plan. Just keep in mind that cryptocurrencies can rise and fall in price rapidly, so investing in them comes with inherent risks.
What is the best crypto wallet?
Finding the perfect crypto wallet can be a bit tricky, as the best one for you will depend on your specific needs and preferences. Crypto wallets come in different types, such as hardware and software wallets, each with its own pros and cons. Don’t forget to consider factors like security, ease of use, and compatibility with various cryptocurrencies when selecting a wallet. To help you make an informed decision, we recommend reading our crypto wallet review of the Best Crypto Wallets for Australians.
Which crypto has 1000x potential?
Answering the question of which cryptocurrency has the potential to increase 1000x in value is complex and speculative. No one can predict the future of the crypto market with absolute certainty. Several factors can influence a cryptocurrency’s growth potential:
- Utility and Adoption: Cryptos addressing real-world problems with clear use cases are more likely to gain traction
- Regulatory Environment: Clear and favourable regulations can boost a crypto’s growth prospects.
- Community Support: An engaged community can promote awareness and adoption.
- Technological Innovations: Unique features or solutions can set a crypto apart.
- Market Capitalisation: Cryptos with a lower market cap have an easier time achieving high multipliers, simply due to their smaller size.
- Market Sentiments: Perception and overall market sentiment can swing a crypto’s value.
Always conduct thorough research and consider consulting financial experts before investing. Remember, while some cryptos show promise, predicting 1000x returns remains inherently risky.
