Bitcoin outperformed stocks in September: Here are the top five digital coins
Bitcoin outperformed the market indices in September. The tech-heavy Nasdaq composite fell 10.5% for the month while the S&P 500 dumped 9.3%. However, Bitcoin was down just 1%.
X
The major indexes are down more than 20% for the year while Bitcoin has lost a staggering 54.7%. However, September’s relatively strong performance could mark the beginning of a reversal for cryptocurrencies.
There are hundreds of digital coins on the market these days, which makes analysis a huge task.
So what are the top five coins to know about right now?
Top coins updated
Ethereum, Solano, Cardano, Doge Coin and Bitcoin are the best coins to know as we enter the fourth quarter.
Ethereum is a leading blockchain and leader in decentralized finance, allowing people to transact directly, without using a bank. Its native coin ether, or ETH, has a market capitalization of $161.5 billion, second only to Bitcoin, according to Coinmarketcap. ETH trades on leading digital exchanges that include Coinbase, Binance and Huobi.
ETHs are used to complete transactions on Ethereum.
Ethereum has also emerged as a leader in staking after it switched to a new way of completing blocks called proof-of-stake on September 15. This allows validators to confirm transactions without using more energy. Before and after the merger, staked ETHs have increased in volume and now account for 11% of total ETHs. ETH deposits on the stake layer are $14 million.
Why is this important?
Staking is a way to participate in a blockchain that requires less energy and time while earning rewards. Participation has remained at a very healthy rate of over 95% since the move.
You can lock your ETHs when betting, but there are ways to avoid it. As an example, some staking pools issue floating derivative tokens for trading and other uses.
Although a minimum of 32 ETHs is required to participate in the network, you can stake fewer ETHs in staking pools. Stakers share the rewards based on their contribution.
Solana’s lightning speed
Solana is known as the Ethereum killer due to its faster speed and lower fees. It ranks 9th in market capitalization at $11.7 billion.
Unlike Ethereum, Solana uses a proof-of-stake validation that is more robust, and uses a proof-of-history method that checks the timing of each transaction. This makes transactions faster. Solana is capable of pushing 250,000 transactions per second compared to Ethereum’s 15 transactions per second. The transaction fee is also much lower and can sometimes be only a fraction of a krone.
Solana is vulnerable to power outages, which increases the risk. The last power outage happened last week. The risk of power outages is surprising since decentralized networks like Solana are supposed to be more resilient to this type of failure.
Cardano is also a proof-of-stake network that supports decentralized applications. Transaction rewards depend on the number of native ADA coins that have been staked. It has a market value of $14.5 billion, slightly higher than Solana. It recently went through an upgrade that will improve speed and security.
Top Coin: Bitcoins Meme
Meme coins were very popular in 2021.
Dogecoin ranks 10th with a market cap of $7.9 billion. This Elon Musk favorite is used to tip users on Reddit and Twitter. Although it uses the expensive and time-consuming proof-of-work mechanism, it completes 30 transactions per second, much faster than the leading proof-of-work coin Bitcoin.
Miners can get DOGE mining rewards when mining for other coins. DOGE is set up to have unlimited supply which will always drive the price of the coin down.
Bitcoin, the best coin for now
Bitcoin, the world’s first cryptocurrency, has been called digital gold and a store of value. It has a total supply cap of 21 million bitcoins, or BTC. 18.5 million have been mined so far.
Most coins adopt proof-of-stake or other cheaper ways to earn rewards, leaving Bitcoin as the only leading proof-of-work coin.
However, the leading crypto has a market cap of $373.9 billion. According to the latest report from the Bank of International Settlements, their exposure to cryptocurrencies is only 0.01%. However, there are now nearly 35,000 crypto ATMs in the United States.
Bitcoin mining has increased recently, a bullish signal for the cryptocurrency. In international currency markets, it has risen against the British pound as the latter fell almost to parity with the US dollar last week.
Finally, remember that cryptocurrencies are volatile, emerging asset classes. It is important to be ready to cut your losses when investing in these digital assets.
YOU MAY ALSO LIKE:
Why should you use IBD’s relative strength rating?
How relative strength line can help you judge a stock
See how you can reduce risk, increase profits with swing trading
MarketSmith: Research, charts, data and coaching in one place
