Cryptocurrencies are virtual currencies without any central authority they are worthy because the user agrees to that worth. Without national authority, the price of these currencies is extremely high and volatile. These currencies have taken the form of digital coins or tokens. It is based on blockchain technology.
When talking about the worth of cryptocurrencies some cryptocurrencies hold huge value like Bitcoin and Ethereum and others hold comparatively fewer values as per the market capitalization data. Bitcoin holds $923.2 billion while Ethereum holds $470.6 billion market capitalization. The third one Binance coin holds $88.6 billion in market capitalization. Now approx. 8000 cryptocurrencies are there. But Some of them have few values and are neither treated. The worth of Bitcoin is holding far more value than Ethereum and while Binance holds very less value relative to Ethereum.
Reference : www.coinmarketcap.com
Bitcoin is the most traded cryptocurrency and it holds a huge market capitalization. Bitcoin is the first trendsetter and brings the revolution in the field of virtual money. The craze of holding digital currency started with Bitcoin. Bitcoin is appearing as a standard cryptocurrency because it holds huge value and price is also highly volatile.
Now, investors started investing in Bitcoin as it can achieve huge gains just like shares. The price of bitcoin is nothing but decided by the buyer. Sometimes investors may see these as an opportunity but it may be fumbling them with paying extremely high prices for no value.
The value of Bitcoin is highly volatile. On 17 December 2017, the price of one bitcoin was $19783.06 while on 5 February 2018 the price was $6200. So within 2 months, bitcoin took a dip of 30%. So, investors must protect themselves from these huge dips and ups.
Behind Bitcoin, Ethereum is the second-largest digital currency as per the market capitalization. It is an open-source software-based blockchain technology where developers can develop applications to work efficiently without any fraud and downtime. Ethereum is based on a decentralized structure system and enables smart contracts.
The value of one Ethereum in December 2021 is around $4000 and which is quite low from Bitcoin but overall we can say it has huge worth compared to other cryptocurrencies.
At present, Ethereum is more popular compared to bitcoin as it is supported by DAOs. The future path of Ethereum looks much hopeful. Bitcoins are limited in numbers but Ethereum is a software-based program where no limit of applications and any central authority to regulate it. DAOs are specific groups that hold kinds of Non-fungible assets and are ready to accept similar kinds of supporters. Ethereum has wide scope in retails and other industries. Another acceptance is on gaming, crypto exchanges, insurance etc.
Similar to Bitcoin, the price of Ethereum is highly volatile. So investors can buy Ethereum if they are expecting profits in future. Moreover, Ethereum is widely accepted as the price is quite affordable and many groups and games accept Ethereum as a single currency so in that case also investment happens. Another way is to invest in Ethereum stocks. These are funds and companies which invest in Ethereum on behalf of you. These companies have vast exposure to these currencies.
Binance coins are ranked #3 in cryptocurrencies as per the market capitalization data. It has a market capitalization of around $100 billion. It supports trading fees, exchange fees, listings fees etc. In simple terms, These coins allow you for rebates in various fees. It also helps in trading other cryptocurrencies. Binance coins are utilized in credit card payments, hotel bookings, payments processes where acceptance is allowed by the authorities. Right now it is traded at $554 US. So, the worth of Binance coin is comparatively less than Bitcoin and Ethereum. But yet as a rank 3, it has the potential to be accepted in various sectors.
Investors are expecting that the price of these currencies increases in future. So, they want to buy now to earn huge profits in future. The current scenario is of collecting more and more coins to earn huge profits later.
Some of the groups support the decentralized structure of virtual money. They predict there is no requirement of a central authority for daily operation. Blockchain technology can replace the centralized authority structure.
Some believe that the Blockchain technology associated with cryptocurrencies are safer to deal with compared with the traditional one. The confidential data of investors, buyers and sellers are completely secure in blockchain technology.
During this talk have you noticed? The cryptocurrencies are traded without any boundaries of location, people and community. The system is very transparent as it has removed the necessity of central authority. Investors may seem as favorable to invest and worth.
So, till now Bitcoin and Ethereum are two major game players in the cryptocurrencies market. Binance coins are also favorable for some sectors. Moreover, people are procrastinating on the acceptance of cryptocurrencies as the national legal currency. After approval, it may stabilize and reduce overvalued prices. However, it may take time for legal approval till that the worth of cryptocurrencies is highly volatile and unpredictable.