The basic of Crypto
As of 2023, the world of cryptocurrency has made a significant comeback after a challenging period, often referred to as the 'crypto winter', that occurred in 2022. This period was marked by a substantial market crash which wiped out over two-thirds of the market's value, fraud revelations about FTX's CEO, Sam Bankman-Fried, and multiple company bankruptcies. However, the entire crypto market cap has recovered to $1.14 trillion as of this year, still significantly below its peak of an estimated $3 trillion.
The top three cryptocurrencies currently are Bitcoin, Ethereum, and Ripple's XRP. Bitcoin, the largest cryptocurrency with a market cap of $537.5 billion, has seen a growth of 63% this year, despite fluctuations due to recent political events such as the debt-ceiling crisis. Bitcoin is currently trading around the $27,000 mark. Looking ahead, the upcoming Bitcoin 'halving' in 2024 is anticipated by some to potentially trigger another significant increase in Bitcoin's value.
Ethereum, with a market cap of $233 billion, has been stable, hovering around the $1,800 mark. Despite being 60% down from its all-time high, Ethereum's efforts to reduce energy usage by 99% and its positioning for DAOs and dApps may set the stage for its long-term growth.
Ripple's XRP is considered a riskier investment due to an ongoing legal battle with the SEC. However, there has been a recent shift in the case which could lead to a victory for Ripple and subsequent increase in XRP's value, which has already seen a 48% lift since the start of the year to $0.51.
Meme coins like Dogecoin and Pepecoin are also part of the current crypto landscape. While they are not generally considered solid investments, they can be a fun addition to an existing crypto portfolio. For instance, Dogecoin is down 90% from its all-time high from 2021, and Pepecoin, a newcomer that launched in April, has achieved a market cap of around $700 million after a strong initial performance.
Apart from the cryptocurrencies themselves, investments in the wider crypto industry, such as Bitcoin miners and crypto exchanges, have shown promising returns. Companies like Marathon Digital Holdings and Riot Platforms have seen their stocks rise significantly in 2023, while Coinbase, despite legal threats from the SEC, has had its stock upgraded by analysts.
The cryptocurrency market remains unpredictable and volatile. It's crucial for potential investors to conduct thorough research and consider diversifying their holdings across different cryptocurrencies to mitigate risk.