The cryptocurrency market involves inherent risk like many investment opportunities. But the foundations upon which this currency is built is consistently growing stronger. Thousands of new digital coins have entered the crypto market in recent years – trying to create the success of those first to market such as Bitcoin and Ethereum. Express.co.uk speaks to cryptocurrency experts about which digital currencies have the potential for real longevity amid the difficult and everchanging crypto sector.
The crypto market is subject to extensive change in the short term with many relatively unknown digital coins suddenly surging as a result of celebrity endorsements or other trending factors.
The market as a whole was worth more than the world’s most valuable company after bitcoin and several other leading digital currencies surged on Thursday.
The global crypto market cap is now $2.45trillion (£1.78tn) according to CoinMarketCap, which is more than the market cap of Apple which stands at $2.33tn (£1.69tn).
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But which cryptocurrencies have real longevity in this unusual market?
Bitcoin has been the strongest and leading digital currency in the crypto market for a long time.
Mike McGlone senior strategist at Bloomberg Intelligence said there are many primary winners as money becomes increasingly digitalised and finance progresses – the winners being Bitcoin, Ethereum and the dollar.
Mr McGlone told Express.co.uk: “Bitcoin is well on its way to becoming the digital reserve asset in a world going that way.
“Ethereum looks like a similar threat to old-guard finance as Bitcoin is to gold.”
He added the ability to transact and transmit dollars at all times of day
“The ability to transact and transmit dollars 24/7 with instant settlement and to earn interest well above eurodollars are attributes of crypto dollars. This has buoyed the greenback and trickled down to most financial assets. In a world rapidly going digital, the shift may be unstoppable.
Mr McGlone told Exprees.co.uk predominantly Bitcoin, Ethereum and Tether – which are the most stable coins in his opinion – have two key characteristics in common: robustness of use-case and widespread adoption.
So-called Ethereum killers have “pump periods” which do not last long, the expert added.
But the legacy and history of these digital coins mean they hold greater sway in the marketplace.
Mr Bifulco added: “There’s a growing demand for crypto assets that are backed by a real underlying asset, known as stable coins.
“These are likely to gain more popularity in the long run because they are less volatile and have an underlying value that cryptocurrencies simply don’t.”
John Karony CEO of SafeMoon said the longer-term success of digital currencies depends on the longer-term visions and plans for the coins and the coin’s adaptability.
Mr Karony told Express.co.uk: “The other factor is their ability to pivot and adapt quickly to the ever-changing seas that we call the blockchain space.
“I see a lot of tokens that make the mistake of seeking short term wins versus long term success.”
The SafeMoon CEO added offering the coin across different operating platforms is another key factor in ensuring long-term success.
The founder and CEO of Tally Cameron Parry said estimates suggest concentrated ownership of many crypto assets makes extreme volatility inevitable.
He told Express.co.uk: “Estimates suggest that two percent of Bitcoin wallets own anywhere between 70 to 95 percent of all coins.
“This puts the currency at the mercy of whales whose actions, and tweets in the case of Elon Musk, can have a huge impact on price.”
No viable currency can be so susceptible to the actions of a handful of players, the expert added – which is why fiat currency may not be volatile but its value is in constant gradual decline.