Exploring the most commonly traded cryptocurrencies and their importance

The crypto landscape has expanded considerably over the years, with tech advancements, integration into mainstream finance, economic opportunities, shifting financial dynamics, greater regulatory clarity, and increased institutional adoption as the main driving factors. People have also become more comfortable engaging with digital assets, especially the younger generations who have been brought up in a digitally powered society. 

That’s how the crypto market has come to encompass over 26,000 different cryptocurrencies. This is a staggering figure considering that little over a decade ago, the total number of cryptocurrencies in circulation was likely in the single-digit or low double-digit range. However, many of the tokens and coins available today are either dormant, discounted or don’t see much action in terms of trading activity. 

If you take the time to analyze the market, it becomes obvious that pairs like ETH/BTC, BTC/USDT, ETH/USDT dominate the trading scene while other tokens are hardly ever mentioned. Despite the large number of crypto projects that saw the light of day in the past years, only a handful are of interest to traders. 

So, if you want to invest in crypto and feel overwhelmed by the amount of options available, it helps to know which assets are most coveted by traders and investors and why. This will make it easier for you to figure out which digital assets are worth trading and make informed decisions. 

Bitcoin (BTC)

The fact that Bitcoin is traders’ favorite asset doesn’t come as much of a surprise. The asset is the creator of the crypto industry and has been in the lead for its entire existence, so its first-mover advantage and high valuation are reasons enough for market players to trust in its potential and add it to their portfolios. 

Apart from its long track record and the massive appreciation it experienced, traders also appreciate Bitcoin’s strong fundamentals. Bitcoin’s investor(s), operating under the mysterious pseudonym Satoshi Nakamoto, had a clear purpose in mind when they created the project. They wanted to provide people with a digital alternative to fiat money and thus help combat the issues stemming from the conventional monetary systems controlled by governments and banks.    

By removing the involvement of third-parties in the issuance, management and distribution of units of value, Bitcoin could address problems such as the lack of trust in centralized institutions, limited access to financial services, slow and expensive cross-border transactions, financial instability, lack of transparency, fraud and identity theft, and so on. 

Although Bitcoin’s adoption as a payment solution is hindered by its technical complexity and lack of infrastructure, these qualities helped the asset gain popularity as a store of value. Therefore, Bitcoin represents not just a token, but a vision, embodying all the values and principles that crypto stands for. 

Ethereum (ETH)

Ethereum being among the most traded cryptocurrencies is also something to be expected. Although Ethereum emerged much later than Bitcoin and has a completely different story from the main crypto, the asset has other features that propelled it to the top, ensuring its spot in the limelight and in investors’ hearts and portfolios.    

Unlike its predecessor, Ethereum has a more innovative approach to crypto and can do a lot more than serve as a payment or investment option. The blockchain was the first to integrate smart contract functionality and thus give developers the possibility to create decentralized applications (dApps). This attracted a large number of users to the platform and gave rise to a thriving ecosystem of dApps supported by it. 

Ethereum’s innovative spirit, also highlighted by the numerous updates it continues to roll out every year, and the wide range of use cases it supports are its main strengths and the reason why so many traders and investors love its native asset, Ether.    

Tether (USDT)

Tether is part of a distinct crypto subclass known as stablecoins. This means that, compared to its crypto counterparts that don’t have any correlation to conventional money, Tether is pegged to fiat, more specifically, the US dollar. This helps Tether maintain a more stable value than other digital currencies, hence the name stablecoin, making it more attractive to risk-averse traders and investors. Tether is also the main asset in its category, which adds to its appeal. 

Binance Coin (BNB)

Binance Coin is part of the Binance ecosystem, being the native token of the BNB Chain (formerly Binance Chain), and being directly tied to the Binance exchange, which holds the largest market share in crypto trading. Initially hosted by the Ethereum network, BNB later migrated to its proprietary blockchain, where it serves several purposes. Its utility and the association with one of the most prominent names in crypto trading make BNB a worthwhile investment and a go-to option for many traders. 

Ripple (XRP)

Ripple has a long and complicated history, marked by various rebranding efforts and a high-profile lawsuit against the US Securities and Exchange Commission (SEC). Despite its challenging journey, Ripple and its native token XRP managed to establish itself as a crypto powerhouse through its ability to facilitate fast and cost-effective cross-border transactions. As a result, Ripple has become a viable solution employed by many banks and financial institutions looking to enhance their operations.    

Cardano (ADA)

Cardano shares several key traits with Ethereum, being invented by one of the main altcoin’s co-founders. Both blockchains support smart contract functionality and use a proof-of-stake (PoS) mechanism to verify transactions and ensure security. However, Cardano is promoted as a third-generation blockchain, being superior in terms of scalability, sustainability, and versatility. This enhances its appeal among traders, making it a good option for those looking for an upgraded version of Ethereum. 

Obviously, these are not the only crypto coins that find their way into traders’ pouches. Other notable mentions include Solana, Litecoin, Dogecoin, TRON, Polygon, etc. No matter which of these assets you have your sights on, make sure you research them thoroughly and take into account your own needs before you make a decision.