Top five altcoins of February 2023
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Bitcoin spawned an entire market of alternative cryptocurrencies. Today there are over 5,000 of these ‘altcoins’.
Altcoins can be a good way to diversify your crypto holdings, especially considering the additional functionalities they provide.
Cryptocurrency trading is not regulated in the UK. If something goes wrong, you will not get any compensation. Your capital is at risk, which means that you may lose some or all of your investment.
1. Ether (ETH)
Ether is the native token of Ethereum and the second largest cryptocurrency in the world. Ethereum is a global software platform that supports decentralized applications, smart contracts, and financial transactions, as well as mining and storing non-fungible tokens (NFTs).
Launched in 2015, ETH has accumulated a market cap of over £164.5 billion by February 2023. The crypto’s value peaked at £3,815 in August 2021, and each token is now worth £1,344.
2. Litecoin (LTC)
Launched in 2011, Litecoin was one of the earliest competitors to Bitcoin. It was developed by entrepreneur and computer scientist Charlie Lee.
Litecoin uses a proof-of-work consensus mechanism like bitcoin, which means miners are rewarded for validating transactions using raw processing power instead of making stakes. However, Litecoin is faster than Bitcoin.
As of 3 February 2023, one Litecoin was worth £80.43. The crypto reached its all-time high in May 2021, with each coin worth £326.41.
3 Dogecoin (DOGE)
Dogecoin is the world’s most famous memecoin, ie a crypto asset that was created as a kind of joke.
Dogecoin was created in 2013 using blockchain technology derived from Litecoin. There is an unlimited supply of coins.
Dogecoin sees its value rocket to an all-time high of 58p in 2022, partly in response to Elon Musk’s tweet about buying Tesla merchandise with Dogecoin.
By January 2023, the value of Dogecoin has fallen to around 7p.
4. Bitcoin Cash (BCH)
Bitcoin Cash was created in 2017 as a fork of the original bitcoin because a group of users wanted blocks to allow more transactions to occur in the blockchain.
Functionally, BCH is otherwise identical to bitcoin. It uses the same Proof of Work consensus mechanism and limits its supply to a total of 21 million.
As of 3 February 2023, one bitcoin cash token is worth £112.
5. Tether (USDT)
Tether is a stablecoin – a crypto asset tied to a fiat currency, in this case, the US dollar. For every Tether coin issued, its creators reserve $1, and for every dollar cashed out, a Tether coin is destroyed.
In theory, Tether maintains a value of around $1 (82p sterling) at all times. This stability makes Tether a good choice for transferring value between exchanges, as Tether holdings are more likely to retain stable value than other, more volatile, coins.
However, stable coins are not always stable. In early May 2022, Terra USD crashed – falling from $1 to just $0.30 per coin. Investors cashed out millions of dollars that were put into other stablecoins, including Tether. As a result, Tether’s market capitalization dropped from £65.6 million to £57.7 million.