It’s impossible to make a general list of the best cryptocurrencies to invest in.
Each person has their own skill-set, risk-tolerance, and investment thesis which play a big role in deciding which cryptocurrency to buy.
To help you find the right cryptocurrencies for you, we have divided this guide into 4 main sections.
Simply scroll to the section that is the most relevant for your particular situation.
Please keep in mind that none of the content here is investment advice, and you should always do your own research.
Best cryptocurrencies for beginners
Cryptocurrencies for beginners are characterized by being simpler to understand and less risky than smaller cryptocurrencies.
They are less risky because these coins have a large market capitalization, which makes them less volatile, and because they already have a strong base of actual adoption.
These cryptocurrencies are purchased on cryptocurrency exchanges for beginners, like Coinbase or eToro.
Bitcoin was not only the first cryptocurrency to ever launch, but it is also the largest one today by market capitalization and adoption.
- Most adopted cryptocurrency
- Network is extremely secure
- Proven use-case
- On-chain transactions are not suitable for small transactions
The cryptocurrency was launched back in January 2009 by anonymous programmer Satoshi Nakamoto, in response to the 2008 financial meltdown caused by banks.
Satoshi created Bitcoin to take the power away from that banks have over the global financial system and put it back into the hands of the people.
Bitcoin’s total supply is capped at 21 Million coins, this means that there isn’t even 1 Bitcoin for every millionaire in the world. Further, Bitcoin’s hardcoded deflationary monetary policy makes it one of the most robust stores of value worldwide.
Over the years, many economists have gone as far as calling Bitcoin “Digital Gold” or “Gold 2.0”. This analogy is based on the fact that Bitcoin is extremely scarce, like Gold, while also being much easier and cheaper to transport.
If Bitcoin were to reach Gold’s market capitalization ($8 Trillion), that would equal a price of approximately $300k per BTC.
Many Bitcoin supporters see the cryptocurrency as a candidate to not only substitute Gold, but also major fiat currencies like the US Dollar, Euro or British pound.
If that were to be the case, Bitcoin’s valuation would jump north of $2M per coin.
Ethereum is a blockchain used to run decentralized and unstoppable applications. The network is fueled by ETH, the network’s native cryptocurrency.
- Most used smart contract platform
- Very big community of developers
- Network is very secure
- Demand for smart contracts in the long-term is questionable
Ethereum was founded back in 2015 by Vitalik Buterin in an effort to expand on some functionalities that he believed Bitcoin was missing.
Although Ethereum was initially designed for the creation of decentralized apps, it is now being most used for decentralized finance (“DeFi”) applications like decentralized exchanges, tokenized assets, loans, and more.
Ethereum’s native coin, ETH, serves the main purpose of paying transaction fees on the network.
However, the recent growth of Ethereum’s decentralized finance ecosystem has seen a significant amount of ETH being taken out of circulation and locked into various DeFi applications.
At the time of writing, approximately 1.7 Million ETH (out of a total supply of 100M ETH), are locked in decentralized finance applications.
The most popular Ethereum finance application, Maker, is responsible for about 90% of the demand for locking ETH.
Over time, as more ETH get locked up in DeFi applications, there will be a decreasing available supply of the coin, which can be bullish for the ETH price.
As one of the largest cryptocurrencies out there, Ethereum is listed on pretty much every single cryptocurrency exchange.
Litecoin is a fork of Bitcoin’s codebase created by Charlie Lee back in 2011 in an effort to enable faster transactions than Bitcoin.
- Among the most adopted cryptocurrencies
- Very established and strong brand
- Cheap transactions
- Does not solve any problems Bitcoin doesn’t solve
- Network is not as secure as Bitcoin/Ethereum
On the technical side, Litecoin is different from Bitcoin in 2 main aspects.
First of all, while Bitcoin has a supply cap of 21 Million coins, Litecoin is capped at 84 Million coins.
Secondly, Bitcoin’s block time is 10 minutes, while Litecoin’s is 2.5 minutes. This is the reason why Litecoin transactions are slightly faster than Bitcoin transactions.
Some investors see Litecoin as silver to Bitcoin’s gold, and others see Litecoin as a network used to test functionalities that are to be implemented in Bitcoin.
However, skeptics wonder if any of the two value propositions are really sufficient for Litecoin to accrue significant value in the long-term.
Ripple is an international settlement network which aims to enable cheap and instantaneous transactions. Transactions on the network are made in XRP, Ripple’s native cryptocurrency.
- Extremely cheap transactions
- Ripple is partnered with major financial institutions
- Very big community
- Network is not censorship-resistant
- Legal situation in the USA is uncertain
Ripple was launched as a response to high transaction fees and long waiting times on the Bitcoin network.
By using XRP, users can complete transactions costing a fraction of a cent, and which arrive in just seconds.
That said, Ripple achieves this high performance by making a decentralization and censorship resistance trade-off.
While on Bitcoin nobody can stop a transaction (or revert it), Ripple has a network of about 100 “validators” that do have the power to do so.
Ripple Labs, the company that created XRP, is partnered with countless major financial institutions in an effort to promote the adoption of the network.
Some names on the partnership list include giants like Santander, MoneyGram, and American Express. That said, many of Ripple’s partners do not necessarily use XRP for its financial activities.
Similarly to all other cryptocurrencies for beginners, Ripple is also listed on Coinbase.
Best cryptocurrencies for advanced investors
Decred was launched back in 2016 by a group of talented Bitcoin developers in an effort to solve several issues that have been plaguing Bitcoin since the beginning.
- Coin holders can participate in governance of the currency
- Stronger security model than Bitcoin
- Built by extremely talented team with longevity in mind
- Not very well-known yet
DCR is a cryptocurrency and digital store of value that is built to last. Similarly to Bitcoin, it is also capped at 21 Million coins and is deflationary in nature.
Decred differentiates itself from Bitcoin in three main aspects.
First of all, while Bitcoin’s network is purely secured by an algorithm called “Proof of Work” (PoW), Decred’s network is secured through a combination of Proof of Work and Proof of Stake.
Hence, while in Bitcoin the network is purely in the hands of “Bitcoin miners”, which are individuals running powerful computers to secure the network, in Decred the network is secured by miners and also DCR coin holders themselves.
According to a recent research piece, this combined security model makes Decred extremely secure. If Decred had the same market capitalization as Bitcoin, it would be over 20x more secure.
Secondly, while BTC holders do not have any rights whatsoever, DCR holders have the ability to directly vote and decide the future of the network. This is achieved through a Decred-native platform called “Politeia”, which means “Political Thought” in Greek.
This not only enables Decred to progress much faster than Bitcoin, but it also enables it to amend itself without risking devastating community splits (like the one Bitcoin experienced in late 2017, after the Bitcoin Cash hard fork).
And last but not least, 10% of all generated DCR are allocated to the so-called “Decred Treasury”. These funds are completely in the hands of DCR holders and DCR coin holders can vote how they are to be used.
This treasury can be the source of a powerful virtuous circle, the more DCR increases in value, the more valuable the Decred Treasury becomes, enabling Decred’s stakeholders to invest more into pushing development and adoption even further.
The best way to buy Decred at the moment is the cryptocurrency exchange Binance.
Launched back in early 2018, Ren Protocol is a solution aiming to improve liquidity in the cryptocurrency space by enabling anonymity and interoperability in all blockchains.
- Very talented team
- REN holders can generate revenue
- Powerful solution to the interoperability problem
- Small cryptocurrency and hence quite risky
At the present time, the cryptocurrency space has two major issues that need to be solved: anonymous and private transactions, and interoperability across different blockchains (for example, sending a transaction from Bitcoin to Ethereum).
On the privacy side, currencies like Monero or Zcash are trying to enable private transactions. However, they come with the limitation that the throughput of both blockchains is low (only a handful of transactions per second), and the privacy functionalities are limited to the chain itself.
And on the interoperability side, platforms like Polkadot and Cosmos are trying to bridge different blockchains between each other. However, the approach both platforms take is based on a handful of “validators” (which makes the system centralized) and only supports a handful of blockchain platforms.
Ren Protocol solves this problem by making use of a process called “Secure Multi-Party Computation” (sMPC). In this system there is a network of nodes, which Ren refers to as “Dark Nodes”, that verify transactions on the Ren network.
In order to become a Dark Node, users need to “stake” (lock-up) 100,000 REN (the cryptocurrency of the Ren Protocol) for the time that they are acting as a Dark Node. Users operating Dark Nodes are entitled to a transaction fee charged to the total volume processed by the network.
REN tokens can be purchased on Binance.
Founded by one of the co-founders of Ethereum, Cardano aims to solve the scalability and security problems that are present with Ethereum.
- Highly scalable blockchain
- Strong academic background
- The full network is still not live
- Demand for smart contracts is unproven
- Security of PoS systems is uncertain
Cardano was founded back in 2017 by Charles Hoskinson and similarly to Ethereum, is also a platform that can be used to create and run “smart contracts”.
However, while Ethereum’s blockchain is limited to 15-20 transactions per second, early Cardano lab tests have shown that the network can handle at least an order of magnitude more.
The project also has a strong academic focus and is being supported by 3 main organizations: The Cardano Foundation, IOHK, and Emurgo. This ensures that Cardano has a strong talent team constantly working on improving the platform.
The network’s cryptocurrency, ADA, is used to pay transaction fees on the Cardano platform. Further, once the network’s Proof of Stake (PoS) capability goes live, ADA holders will also be able to “stake” their coins to earn a reward in exchange for securing the network.
- Founded by creator of wildly succesful projects
- Adopted by major companies
- Integrated into a major browser
- Value accrual system for the token is highly speculative
BAT, short for “Basic Attention Token”, aims to eliminate middlemen, frauds, and frustration in the online ad industry.
Although BAT is being used on media giants like Cheddar, a site with 6.5 million visitors per month, its main use case at the moment is arguably on the Brave Browser.
Brave is a browser with over 7 million monthly active users that is fully focused on privacy and ease of use. On Brave, people earn “BAT” tokens whenever they see an advertisement.
This incentivization method aims to give users something in return for their attention when they are consuming ads.
BAT investors claim that the token obtains the majority of its value once major agencies start purchasing the token in bulk to run advertising campaigns.
Although this has not happened yet, it might become a real possibility if BAT gets integrated by more platforms and used by more users.
Among many other cryptocurrency exchanges, BAT can be purchased on Coinbase.
Best cryptocurrencies for day trading
When looking for a cryptocurrency that is ideal for day trading, there are several factors that are important to consider.
First of all, the cryptocurrency needs to be relatively large and liquid. This will enable you to get in and out of positions with ease, and reduces the risk of unexpected negative events, like an exit scam.
Secondly, the cryptocurrency needs to be available on many legitimate trading venues. Usually, most cryptocurrency traders want the coins they are trading at least to be listed on Binance or Bittrex.
And finally, there should ideally be the option to trade the cryptocurrency with leverage. Trading with leverage enables you to trade with more capital than you actually own, and is enabled by margin trading platforms like BitMEX, Deribit, FTX, or ByBit.
EOS is a smart contract platform launched in 2018 that is purely focused on solving the scalability issues of platforms like Ethereum.
- Can be traded with leverage
- Listed on all major spot exchanges
- Cheap to transfer between exchanges
- Legal status of EOS in the USA is unclear
EOS got a lot of media attention in early 2018 after raising $4 Billion in a year-long ICO.
Since then, the platform has attracted several companies and developers to build on the platform and managed to achieve a record 3,000 transactions per second.
This is in strong contrast to smart contract platform Ethereum, which is limited to 15-20 transactions per second.
That said, it’s important to note that EOS only achieved this superior throughput by making a significant decentralization trade-off. On EOS, transactions are processed by a limited group of 21 “Block Producers”.
The problem with this approach is that the Block Producers can easily collude between each other and censor or even reverse transactions.
In many ways, this defeats the point of a blockchain, whose main value proposition is to be an immutable record of data.
Some EOS critics go as far as saying that EOS is nothing more than a “glorified AWS instance”.
With all that in mind, EOS is an excellent coin for day traders due to its enormous liquidity and trading options. According to Messari.io, at the time of writing EOS has $450 million in daily trading volume.
EOS can be purchased with USD, EUR, or GBP on exchanges like Coinbase, and with BTC, ETH or USDT on exchanges like Binance
Created by Justin Sun, Tron is a smart contract platform with the aim of “decentralizing the internet”. The network is powered by its native cryptocurrency, TRX.
- Listed on many major spot exchanges
- Can be traded with leverage
- Very volatile
- Founder of Tron is being investigated by authorites
- Price highly dependent on its founder, and hence unpredictable
Tron’s goal is to offer a platform to rebuild the internet’s most successful applications, while also taking the power away from rent-seeking corporations.
Although the Tron foundation has supported the development of many of these applications, so far all of the most popular apps running on Tron are either gambling or gaming related.
Justin Sun, Tron’s founder, is widely regarded as a controversial individual in the cryptocurrency space.
He is known for his questionable marketing strategies where he often makes “announcements of announcements” in what many believe to be efforts to pump the TRX coin.
Further, in mid-2019 it became public that China issued an “exit ban” on Justin Sun and that Chinese regulators might be after him for his unorthodox promotion strategies of TRX.
This situation escalated to the point where Justin Sun posted a public apology on Chinese social network Weibo where he states that he will now exclusively focus on Tron’s technology, and not so much on the marketing side.
Bitcoin Cash is a Bitcoin fork that was created in late 2017 by a group of people believing that cheap fees need to be the main priority to push adoption forward.
- Cheap to transfer between exchanges
- Can be purchased on most major spot exchanges
- Can be traded with leverage
- Not as liquid as other major coins
- Network at significant risk of 51% attack (unpredictable)
At the end of 2017, the cryptocurrency mania made Bitcoin’s fees skyrocket to over $30 per transactions.
This made Bitcoin largely unusable for cheap transactions like purchasing small items online or buying a coffee.
In response to skyrocketing fees, a group of people got together with the plan to fork Bitcoin and increase the block size from 1 MB to 8 MB, with the aim of keeping transaction costs in check.
Among many other companies, the fork was supported by major firms like Bitcoin.com, Coinbase, and Blockchain.com.
Many early Bitcoiners disagreed with the block size increase and claimed that Bitcoin’s current use case was to be a store of value (akin to Digital Gold), and that it was too early for Bitcoin to become a currency just yet.
This disagreement resulted in a large community clash, that ended up splitting Bitcoin into “Bitcoin” (BTC) and “Bitcoin Cash” (BCH).
Although at first Bitcoin Cash got a lot of media attention and the price skyrocketed, attention around the fork started to fade as it never got the merchant adoption it was designed for in the first place.
Even though Bitcoin Cash is not widely adopted today, it is listed on most major cryptocurrency exchanges and has excellent liquidity in most cases. This makes it an attractive asset for many traders.
Best cryptocurrencies for passive income
Cryptocurrencies are not companies, so they do not generate revenue and don’t have the ability to pay out dividends in the same fashion that companies do.
That said, there are still cryptocurrencies out there that can be leveraged for passive income because they either entitle coin holders to a percentage of the network’s transaction fees, or to an inflationary reward for securing the network.
Tezos is a smart contract platform that launched with governance as its top priority to enable the network to be self-amending, without causing community splits.
- Offers relatively high staking yield
- Innovative governance approach
- Big warchest from ICO funds
- Adoption of the network is very low
- Demand for smart contracts is unproven
After raising $232 Million in an ICO in mid-2017, Tezos took significantly longer than initially planned to launch a functioning network due to some internal power struggles and regulatory concerns.
Tezos finally launched its full network in Q4 2018. From that point, users could now send transactions in the native coin of the network (XTZ), create smart contracts for the platform, and participate in governance decisions.
The first on-chain governance decision in Tezos, called “Athens”, was conducted successfully back in February. The vote saw the participation from over 25,855 community votes.
After the mainnet launch, XTZ coin holders also obtained the ability stake (also referred to as “bake”) their coins to secure the Tezos network, in exchange for a network reward.
This staking process does not require any deep technical knowledge and can be carried out by anyone holding at least 8,000 XTZ.
At the time of writing, staking XTZ yields an annual return of 7.15% (paid in XTZ).
Previously called “Antshares”, NEO has created a smart contract platform that enables the creation of a “Smart Economy”.
- Fully focused on adoption in China
- Barely adopted
- Low annual yield
- Very expensive to create smart contracts on the network
On the contrary to most blockchain platforms out there, NEO does not have 1 coin on its network, but two: NEO and GAS.
While in networks like Ethereum transaction costs are financed with the native coin itself (in Ethereum’s case, ETH), in NEO transaction costs are paid in GAS, and not in the main coin NEO.
In order to obtain GAS, NEO holders need to store their coins in the official NEO wallet.
Users that do so are entitled to an amount of GAS equivalent to approximately 0.40 GAS per day for every 1,000 NEO an individual holds. At the time of writing, this boils down to a yearly yield of approximately 1.5%.
The best way to buy NEO is on Binance.
Cosmos is a blockchain platform launched in 2019 aiming to solve the problem of interoperability between different blockchains.
- Offers a solution to the interoperability problem
- Raised a significant amount of funds
- High staking yield
- Interoperability approach is centralized
- Adoption for the network is still low
Cosmos enables blockchain interoperability by creating so-called “Hubs” that check transactions and broadcast them to one network to the other.
Although this is a simple way to solve the interoperability problem, it also poses centralization risks since the “Hubs” could potentially be corrupt and collude between each other.
The Cosmos network’s native coin is called “ATOM”. On the contrary to coins like BTC or ETH, Cosmos does not aim to be a store of value or medium of exchange.
ATOMs are purely used for staking purposes to secure the network and participate in the network’s governance.
At the time of writing, staking ATOM produces a yearly yield of 10.5% (paid in ATOM).
The easiest way to buy ATOM is on the altcoin exchange Binance.
Alexander has worked in community growth for multiple cryptocurrency companies. He is now the Sales and Operations Manager for CoinDiligent. In his free time, he writes articles sharing his industry insights. You can get in touch with Alexander on LinkedIn.