What are the top cryptocurrencies in January 2022?
CRYPTOCURRENCIES are set for another blockbuster year as risk-taker investors hunt for high returns.
Here are the top cryptocurrencies for January 2021.
Cryptocurrency valuations hit record highs last year, helped by high-profile backing and mainstream interest from investment banks.
The sometimes-astonishing returns they can bring buyers attract brave and bullish investors looking for better pay-offs than savings accounts and stock markets.
But cryptos are also extremely volatile compared to reliable, lower-return investments.
And while there have been some huge spikes in value over the past year and more, there have been some cliff-edge collapses too.
Valuations can swing wildly depending on sentiment, celebrity backing or regulatory crackdowns - and there are far fewer investment fundamentals than usually apply to banking shares or funds.
Cryptocurrencies are also unregulated, so there's a much higher risk of getting scammed.
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It's important to do your research so you understand who is behind the coins and what their use is.
City of London watchdog the Financial Conduct Authority has warned that this is a high-risk investment and investors should be prepared to lose all their money.
Cryptocurrencies have two important figures.
There is the value of an individual coin and its market capitalisation.
The market capitalisation is worked out by multiplying the price or value of a single coin by the number of coins in supply.
Here is how cryptos rank by market capitalisation as of January 4.
Bitcoin
Bitcoin is the original and largest cryptocurrency with a market capitalisation of $887billion and market share of almost 40%.
The cryptocurrency was launched in 2009 by a mysterious founder called Satoshi Nakamoto who wanted to create a peer-to-peer online currency that could be discovered or mined online and used without banks' oversight.
The price of a single Bitcoin hit record highs last year as cryptos boomed, aided by backing from Elon Musk, interest from major financial institutions and support from major tech finance firms including PayPal.
Its value hit a record high of more than $68k per coin in August, but has now fallen to under $47k after bans in China and India.
Ethereum
Ethereum is the second largest cryptocurrency and was launched in 2014 to rival Bitcoin with more user-friendly blockchain technology that can be used by other cryptocurrencies.
It has a market capitalisation of $458billion and the price of a single Ether is $3,859.
Ethereum also hit record highs last year but there have also been steep drops due to regulatory clampdowns.
Still, some analysts predict that Ethereum could one day overtake Bitcoin.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
Binance Coin
Binance Coin was launched in 2017 by cryptocurrency exchange Binance, which is the world's largest crypto platform.
It was initially founded for Binance users to get discounted trading fees.
But now it can be used to pay transaction fees on Binance and to pay for items on websites such as Crypto.com.
The value of a single Binance Coin is currently $517 and it has a market capitalisation of $86.2billion.
Tether
Tether is a different type of cryptocurrency to Bitcoin and Ethereum.
It is known as a stablecoin as its price is pegged to regular "fiat" currency such as the dollar.
Users are said to be able to store, send and receive digital tokens mirrored against their chosen currency.
Tether claims to keep its values steady by holding reserves in that currency in a bank.
It has a market capitalisation of $78.2billion and the price of a single Tether or USDT is $1.
Solana
Solana is a relatively new cryptocurrency, having only launched in March 2020.
It has generated excitement and investor interest by claiming that its blockchain technology is faster and more efficient than Ethereum's.
The cryptocurrency has a market capitalisation of $53billion and is priced at $172.
What is cryptocurrency?
CRYPTOCURRENCIES are a form of payment that can be exchanged for goods and services.
They work using a technology called blockchain.
Blockchain is a decentralised technology spread across computers that manages and records transactions. Find out more about cryptocurrencies below..
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Cardano
Cardano was set up in 2017 by Charles Hoskinson, who was one of the eight co-founders of Bitcoin rival Ethereum.
It aims to be more transparent by giving its investors a say in how the cryptocurrency is run.
Cardano, which has a market capitalisation of $44.9billion, hit its highest ever level on May 17, when its US dollar conversion hit $2.3091.
The jump came after reports that its parent company, Input Output, had partnered with World Mobile Group - a mobile network built on blockchain.
Celebrity backing has also drawn attention to Cardano.
Gene Simmons from rock band Kiss threw his support behind it in March, tweeting that he'd purchased $300,000 (£216,223) worth.
The price of a single Cardano or ADA coin is currently $1.34.
USD Coin
The USD Coin (USDC) is another stablecoin that is pegged to the value of the US dollar.
Every unit of USDC that is purchased is backed up by $1 that is held in reserves either through cash or short-term Treasury bonds.
The digital currency was launched in 2018 by fintech firm Circle and the Coinbase crypto exchange.
It recently overtook XRP to take seventh spot in the crypto ranking in market capitalisation.
Its $42.68billion market cap and $1 price make it one of few major cryptos to have gained over the past few months.
XRP
XRP is form of digital currency that can be used to transfer money between individuals or banks using the Ripple network.
For example, if you need to send euros to someone who uses dollars, the Ripple network would convert this into XRP to speed up and lower the cost of the transaction.
It was launched in 2012 and has hit a market capitalisation of $39.8billion.
The price of a single XRP is now $0.836, down from a $1.84 high in April 2021.
Luna
Another recent riser in the crypto top 10, Luna has overtaken popular cryptos such as Dogecoin and Shina Inu in recent weeks to climb into the big leagues.
It is the main token used on blockchain technology run by Terra, which launched in 2019 to rival Ethereum by offering a payments system that links cryptos to fiat money to keep values stable.
The price of a Luna is currently $88.3 and it has a market capitalisation of $31.8billion.
Polkadot
Polkadot is another of the newer cryptocurrencies on the block.
It only launched in May 2020 and supports asset and token transfers over different blockchains.
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The price of a single Poladot or Dot is $29.55, which is down from a high of $54 in 2020.
It currently has a market capitalisation of $29.2billion.
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