Since the introduction of bitcoin in 2008, bitcoin has inspired an explosion of other cryptocurrencies. These ‘alternative’ cryptocurrency coins – altcoins – now over 5,000 in numbers.
If you want to invest in cryptocurrency, one option is to diversify by holding a selection of coins beyond bitcoin, taking into account the functionalities they offer.
Below are the 10 best and reliable altcoins with the highest market capitalization at time of writing.
1. Ether (ETH)
Ether is the cryptocurrency native to Ethereum, the global software platform that runs applications including smart contracts, games and financial transactions through blockchain technology, as well as minting and storing NFTs (non-fungible tokens).
Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization.
Ethereum was conceived in 2013 by programmer Vitalik Buterin and has accrued a market capitalisation of over $199 billion, as of March 2023. Each Ether token is worth around $1656. The crypto saw its all-time high of $4811 in November 2021.
2. Tether (USDT)
Tether is an asset-backed cryptocurrency stablecoin. It was launched by the company Tether Limited Inc. in 2014. Tether Limited is owned by the Hong Kong-based company iFinex Inc., which also owns the Bitfinex cryptocurrency exchange.
A stablecoin is tied to fiat currency, in this case, the US dollar. For every Tether coin issued, its creators keep $1 in reserve, and for every dollar cashed out, one Tether coin is destroyed.
In theory, Tether retains a value of around $1 at all times. This stability makes Tether a good option for transferring value between exchanges, since Tether holdings are more likely to retain a stable value than other, more volatile, coins.
However, stablecoins are not infallible. In early May 2022 another stablecoin, Terra USD crashed – dropping from $1 to a low ebb of just $0.30 a coin. In response, investors cashed out millions of dollars they had put into other stablecoins, including Tether.
In the following weeks, Tether’s market capitalization dropped from $83 million to $73 million.
3. Binance Coin (BNB)
Binance coin (BNB) is the exchange token of the Binance crypto exchange. It was launched originally on the Ethereum blockchain in 2017 but later migrated to the Binance Smart Chain, now called BNB Chain.
During its initial coin offering (ICO), Binance issued 200 million BNB coins, but the platform periodically buys back and destroys – ‘burns’ – some of these coins, increasing the value of those left in circulation.
As a utility token, BNB can be used to trade through Binance.
The coin was valued at $303 as of March 2023 and still my favorite coin in all altcoins.
4. USD Coin (USDC)
USD Coin is digital stablecoin pegged to the United States dollar. USD Coin is managed by a consortium called Centre, which was founded by Circle and includes members from the cryptocurrency exchange Coinbase and Bitcoin mining company Bitmain, an investor in Circle. It was first issued in 2018, by peer-to-peer payment platform, Circle.
USD Coin (USDC) is also a stable coin pegged to the value of one US dollar.
For each USDC in circulation, one dollar is held in reserve. Whenever a coin is exchanged for fiat currency, it’s destroyed – ensuring the number of coins issued and dollars held in reserve remains the same.
5. Ripple (XRP)
Ripple (XRP) is a real-time gross settlement system, currency exchange and remittance network created by Ripple Labs Inc., a US-based technology company.
The cryptocurrency was first launched in 2012 on its own ledger. Unlike bitcoin, XRP transactions are not verified through proof-of-work or proof-of-stake. Instead, transfers are processed by network participants known as validators.
Making a transaction through Ripple incurs a small fee – a tiny fraction of one XRP token, which is destroyed.
In May 2022, XRP had the sixth highest market capitalization of all cryptocurrencies. Each coin is worth around $0.38 as of March 2023.
The number of CRP tokens that can ever be in circulation is capped at 100 billion.
6. Cardano (ADA)
Cardano is a public blockchain platform. It is open-source and decentralized, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency, ADA. Cardano’s development began in 2015, led by Ethereum co-founder Charles Hoskinson.
Proof-of-stake blockchains require considerably less energy than their proof-of-work counterparts, since this process uses an algorithm to select just one device in the decentralised network to verify each block of transactions, rather than having every device compete every time.
As of March 2023, one Cardano is worth $0.36. Its all-time high was $3.1, which it reached in September 2021.
7. OKB Coin
OKB Coin is one of the fastest growing altcoins in 2023 so far. Moving from range of 20$ to 51$ per unit in the last 90 days.
OKB is the native token of the OKX cryptocurrency trading platform. OKX was founded in 2017 as OKEx, with OKB released a year later. OKB is classified as a utility token that gives holders benefits like reduced trading fees, access to the OK Jumpstart Initial Exchange Offering platform, and voting rights on which coins are listed on the exchange.
Additionally, OKB will reportedly be used to pay transaction fees on the OKChain blockchain and the decentralized exchange (DEX) OKDex. OKB price is updated and available in real time on the cryptocurrency platform.
As of March 2023, each OKB coin was worth around $51.
8. Dogecoin (DOGE)
What began as a tongue-in-cheek meme currency quickly became a crypto asset.
Dogecoin is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a “joke”, making fun of the wild speculation in cryptocurrencies at the time. It is considered both the first “meme coin”, and, more specifically, the first “dog coin”.
Dogecoin was created in late 2013, using blockchain technology derived from Litecoin, and accompanied by a Shiba Inu dog logo. The coin is known for its humorous origins and unlimited supply, which has made it an attractive entry point to crypto for new investors.
Dogecoin saw its value rocket to an all-time high of £0.58 in 2022, partly in response to Elon Musk’s tweet about buying Tesla merchandise with Dogecoin.
As of March 2023, Dogecoin’s value has fallen to about $0.082.
9. Polygon (MATIC)
Launched in 2017, MATIC is the native cryptocurrency of Polygon – a ‘sidechain’ that runs parallel to the Ethereum blockchain.
It was created in response to rising transaction fees – and decreasing transaction speeds – on the main Ethereum blockchain, triggered by its increasing popularity and usage.
Sidechains run parallel to an existing blockchain, and are connected to it by a ‘bridge’. This means users can move assets held on the Ethereum blockchain to the Polygon sidechain, and benefit from lower fees and faster speeds when making transactions.
Like Ethereum, decentralised apps can run on the Polygon sidechain.
As of March 2023, each MATIC coin was worth around $1.25.
10. Binance USD (BUSD)
Binance USD (BUSD) is a stablecoin issued by Binance, which runs on the Paxos blockchain.
The coin is pegged to the value of $1 US, and can be used to purchase other cryptocurrencies on the Binance platform.
Like other stablecoins, BUSD maintains its value by holding $1 in cash for each coin issued, and destroying coins when they are exchanged for fiat currency.
BUSD is regulated by the New York State Department of Financial Services.