The financial crisis led to the worldwide distrust in the financial system. To help solve this problem, an anonymous person – or group – known as Satoshi Nakamoto published a paper on a decentralized currency. According to the paper, the currency would not be issued by a central bank. It would also be used worldwide, removing the barriers of the fiat currencies. The currency was known as bitcoin.
In 2008, the global financial system fell, ending eight years of a continuous bull run. The sudden reversal came after the bubble in housing prices burst. Before the bubble, investment banks created complex financial products known as Mortgage Backed Securities (MBS) and Collateralized Debt Obligations (CDOs). In this, the banks gave loans to anyone that came calling to finance the spending on housing. Most of the people they gave money to were not able to pay the money back. As a result, major banks such as Lehman Brothers and Bear Sterns failed with the former going bankrupt. Bear Sterns was acquired for less than $10 a share.
Welcome cryptocurrencies:
The financial crisis led to the worldwide distrust in the financial system. To help solve this problem, an anonymous person – or group – known as Satoshi Nakamoto published a paper on a decentralized currency. According to the paper, the currency would not be issued by a central bank. It would also be used worldwide, removing the barriers of the fiat currencies. The currency was known as bitcoin.
When it was launched, bitcoin found its early success in the dark web. These are sites where people go to buy illicit items like drugs and guns. With bitcoin, it was impossible to track the people who bought the products. At the time, one bitcoin was equal to less than a dollar. Today, one bitcoin is worth more than $8,000.
The launch of bitcoin led to the formation of other cryptocurrencies.
Where to trade cryptocurrency?
Today, there are more than 1,800 cryptocurrencies, which have a combined market capitalization of more than $390 billion. To put this into perspective, the cryptocurrencies are worth more than General Electric, IBM, and NVIDIA combined. Bitcoin has a market cap of more than $143 billion.
With the cryptocurrencies industry being little regulated, chances are that most of these currencies have no long-term value. In cryptocurrency trading, you should consider the following currencies.
Bitcoin is without a doubt the top cryptocurrency right now in terms of worldwide awareness. It has become synonymous with the entire blockchain industry. Bitcoin has a market capitalization of more than $140 billion. At this size, the currency has a similar valuation to IBM and Snapchat combined. With its scale, you can trade bitcoin in any bitcoin exchange or in traditional brokers that offer its futures.
Ethereum is the second largest cryptocurrency with a market valuation of $70 billion. It is currently trading at $705. Ethereum is different from bitcoin in that, while bitcoin is a currency, ethereum provides a decentralized system that allows app developers to offer smart contracts. It is a very popular currency that was recently given the best ratings by Weiss Ratings.
Ripple is another currency you can try. It is also different to ethereum and bitcoin. Its technology is useful in the remittance industry. It is now being tested by major remittance companies like Western Union and MoneyGram to reduce the time and cost of remittances. Ripple has a market valuation of $28 billion.
Bitcoin Cash was formed from bitcoin last year through a process of forking. In this, software developers created a similar code to bitcoin and allowed people to mine a similar currency, which was called bitcoin cash. Today, bitcoin cash has a market valuation of $23.5 billion and is considered the best alternative to bitcoin.
While these are the most recommended cryptocurrencies, you can also give other new and upcoming cryptos a chance. These are Cardano, EOS, Stellar, TRON, and Monero. However, you need to be very careful because very little is known about these currencies.
