Cryptocurrency might have started as a Wild West of investing dominated by mavericks, but it’s now firmly in the financial mainstream. Institutional investors and big banks treat it as a serious asset despite recent volatility, the collapse of a major exchange, and regulatory crackdowns in China and elsewhere.
If you need evidence of how volatile, consider this: As of March 4, bitcoin’s value has ranged from a low of $15,599.05 to a high of $48,086.84 over the past year.
Despite that volatility, many cryptocurrency investors remain looking for the next big payoff. Keep reading to learn which cryptocurrencies might explode soon.
Which Cryptocurrency Is Set To Explode?
If you want to start buying cryptocurrency, you might wonder which will bring the most prominent potential return. Although bitcoin might be the obvious choice, there are better choices in 2023. Your chances of having a big payoff might be better with a smaller coin that institutional investors still need to pump up, like bitcoin.
Here are six cryptocurrencies that might still have a high ceiling.
Ethereum, commonly known as ether, is the world’s second-largest cryptocurrency behind bitcoin, sometimes even outperforming bitcoin. In 2021, Ethereum instituted a significant upgrade that reduced the supply of ether, currently at 122.37 million coins as of March 4. The upgrade also allows the Ethereum network to handle more transactions per second, improve the platform’s scalability, and lower transaction fees.
Compared to bitcoin, Ethereum lacks scarcity — bitcoin’s supply is capped at 21 million coins — and widespread acceptance by companies and governments. However, unlike bitcoin, Ethereum isn’t just a store of value; it also powers an infrastructure to build apps. Other cryptocurrencies are issued on Ethereum, serving as the foundation of decentralized finance.
Many metaverse projects, including Star Atlas, Axie Infinity, and The Sandbox, use the Ethereum blockchain, as do most NFTs. Another upgrade, launched in September 2022, transitioned Ethereum to a Web3-ready proof-of-stake mechanism that reduced energy consumption by about 99.95% and further increased security and scalability.
Ethereum is experiencing a significant slump, losing 40% of its value over the last year, which is about on par with other major cryptocurrencies. Some analysts say the low price presents a good buying opportunity for investors waiting for the right time to test the cryptocurrency waters. The coin also appeals to current investors who bought high and would benefit from dollar-cost averaging.
Binance is the largest cryptocurrency exchange in terms of trading volumes. Like bitcoin, BNB coin — formerly called binance coin — keeps a hard limit on the number of tokens in circulation — in its case, 157,894,409 out of a maximum of 200,000,000 tokens are currently in circulation. It helped the token price increase exponentially in 2021.
In addition, Binance puts about one-fifth of its profits each quarter into permanently getting rid of, or “burning,” BNB tokens, which raises the value of the remaining tokens. In January, it burned 2.06 million BNB tokens — over $575 million worth — and expects to burn 50% of the maximum supply eventually.
Binance has two blockchains, reducing the bottlenecks Ethereum is vulnerable to. It’s also fast and scalable, and Binance is making the platform more regulator-friendly, according to Seeking Alpha. This feature could be crucial to its longevity and widespread adoption, especially in light of the collapse of rival exchange FTX.
In addition, Binance recently launched Bifinity, a fiat-to-cryptocurrency payment platform that will help merchants prepare to accept digital assets as payments, CoinMarketCap reported. The payment processing platform supports over 50 cryptocurrencies and significant payment networks like Visa and Mastercard.
Also working in BNB’s favor is that it outperformed bitcoin and Ethereum in 2021 and 2022. With Binance expanding into Europe, with Paris as its hub, BNB could be ready to take off.
On the downside, the Securities and Exchange Commission is looking at whether Binance misbehaved in its launch of BNB. A significant fine or other sanction could hurt BNB prices.
Tether is a type of “stablecoin” designed to provide a less volatile alternative to bitcoin because it is linked to another asset. In tether’s case, that asset is the U.S. dollar. In valuation terms, tether usually has a 1-to-1 ratio with the dollar, meaning it is less volatile than cryptos such as bitcoin and ether — “usually” being the operative word.
In May 2022, tether dropped to $0.9455, its lowest price since 2018, before returning to its typical price above 99 cents. Although analysts disagree over whether the drop constituted a true “de-pegging” from the dollar, the event led to a sell-off as investors — worried that tether would plummet like another stablecoin, terra — raced to move into bitcoin and other coins now selling at what some consider to be steep discounts.
With a $71.37 billion market cap, the tether is the largest stablecoin and third-largest overall. It’s also the most traded coin — cryptocurrency investors use it to hold funds or make transactions using funds they want to protect against the price swings to which bitcoin, ether, and other non-stable cryptocurrencies are vulnerable. You can also lend it to cryptocurrency platforms in return for double-digit annualized interest rates without worrying too much about volatility erasing your earnings.
Decentraland is a virtual reality game on the Ethereum blockchain that uses the MANA token as an in-game currency. Users can purchase goods and services, buy land, visit other players, and create and monetize their content. MANA’s $0.5955 as of March 4 represents a 108% increase from its 52-week low of $0.2859 — and a 79% decrease from its 52-week high of $3.40.
MANA is the second-largest gaming cryptocurrency in terms of market cap. Although Decentraland has competition from The Sandbox and ApeCoin, and in-game assets are pretty expensive, land parcels recently listed start at 3.5 Ethereum, worth about $5,492 at current prices — it has some benefits that could push the MANA token forward.
For example, users retain ownership of the digital assets they create in Decentraland and can convert them to cryptocurrencies other than MANA.
If the Decentraland metaverse needed a legitimacy boost, it got one in May 2022, when Millennium Hotels and Resorts launched M Social on the platform. According to a press release, this is the first metaverse hotel operated by a hospitality group. Decentraland has also signed a deal to integrate the upcoming film “The Infinite Machine” and its NFT collection into its metaverse, Variety reported. In addition, Grey Goose has recreated its VIP Suite on Decentraland, and it’s gearing up to open a VIP Lounge, according to Forbes.
Algorand, founded by noted computer scientist Silvio Micali, has positioned itself as a competitor to the Ethereum blockchain. Hundreds of companies, including the International Federation of Association Football, use it, as do the El Salvador and the Marshall Islands governments.
Algorand recently appointed its first-ever chief financial officer. Matthew Commons, a Chartered Financial Analyst with over 20 years of experience building and leading blockchain companies, said in a March 1 statement, “There are tremendous opportunities for Algorand to extend its leadership across many blockchain sectors. One of my priorities will be to help identify strategic growth areas with the leadership team and ensure we have the right financial plans to go after them.”
One of Algorand’s most significant advantages is its “proof-of-stake” algorithm, which offers high security and scalability and requires less electricity than Bitcoin and other platforms. This feature will only grow in importance as cryptocurrencies face more criticism — and possible regulation — for their massive energy consumption.
RenderToken is a graphic rendering network that lets miners with excess graphics processing unit bandwidth parcel it out to artists and creative studios that need extra computing power. RNDR is the native token creators and miners used in their transactions on the Render Network.
The cloud graphics company Otoy is behind Render. To further level the graphics-processing playing field, Otoy recently launched its Octane X RNDR app for iOS. The app includes the same Otoy GPU renderer that studios like Disney and Marvel use, Fast Company reported. It could forge a path for RenderToken to become a major player in metaverse rendering.
RNDR was launched in a public sale in 2017 but recently got its listing on the Coinbase exchange. While highly speculative, RNDR could benefit from the increased exposure to Coinbase and the extraordinary rise of non-fungible tokens for digital art.
How To Spot the Next Big Cryptocurrency
Before figuring out which cryptocurrency might be the next big winner, it helps to understand why so many investors are gravitating toward cryptocurrency in the first place. Much of it has to do with a fundamental change in how digital assets are perceived, said Jeff Dorman, chief investment officer at Arca. This financial services firm specializes in digital assets.
“I believe we are in the early stages of a multi-decade secular shift towards digital assets, as the evolution from an analog to digital world has been transformed forever due to COVID-19,” Dorman told GOBankingRates in an email.
He says this asset class “has evolved far beyond cryptocurrencies” to decentralized finance, NFTs, and other investment vehicles.
Profit and Gains From Crypto
When trying to identify the next prominent cryptocurrency, two things to keep an eye on are similar to what a stock investor would keep an eye on market capitalization and price.
Market cap shows how much has been invested in a specific network. As a general rule, the larger the market cap, the more stable the asset, though it also means the coin has less room to grow. Monitoring the price to determine whether investors are bullish or bearish on the cryptocurrency is also essential.
Other Key Metrics
Here are a few other metrics that can help you evaluate a crypto.
- Volatility: The less volatile the price, the better for the crypto’s value to remain stable.
- 24-hour volume: The total dollar value of all transactions over the past 24 hours can help determine a coin’s liquidity.
- Supply: As bitcoin’s meteoric rise attests, scarcity can drive demand and prices. Increasing or infinite supply can have a dampening effect.
How Do I Buy Cryptocurrency?
Buying cryptocurrency is relatively easy.
Here’s how to do it:
Open an Account With a Cryptocurrency Exchange or Broker
You’ll have to open a trading account, just like you would for stock trades. You can use a cryptocurrency exchange that matches buyers with sellers, such as Coinbase, Binance.US, or Gemini. Alternatively, you can choose a broker like Robinhood or SoFi, which execute the trades for you.
Exchanges typically have low fees, but they feature complicated interfaces. Brokers feature much simpler interfaces but might charge higher fees and offer a limited selection of coins.
Fund Your Account
Before trading crypto, you’ll need a way to pay for your purchases, such as a linked bank account, a wire transfer, or a debit or credit card payment.
Place Your Cryptocurrency Order
Select the cryptocurrency you want to buy and indicate how many coins you wish to purchase. To purchase fractional cryptocurrency shares, specify a dollar amount instead of the number of coins.
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