Top 10 cryptocurrencies in July 2023 – Forbes Advisor UK

From Bitcoin and Ethereum to Dogecoin and Tether, there are thousands of different cryptocurrencies out there, which can make it potentially overwhelming when you first start out in the world of crypto.

To help you find your way around, these are the top 10 cryptocurrencies based on their market capitalization – the total value of all coins currently in circulation.

What are Cryptocurrencies?

A cryptocurrency is a digital asset that can circulate without the centralized authority of a bank or government.

To date, there are approximately 23,000 cryptocurrency projects representing the entire £954 billion crypto market.

The UK financial regulator, the Financial Conduct Authority, has repeatedly warned of the risks faced by those who invest in cryptocurrency, stating that all funds are at risk and investors could lose everything. Cryptocurrency trading is largely unregulated in the UK and there are no compensation schemes.

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1.Bitcoin (BTC)

• Market Capitalisation: £470 billion

Bitcoin (BTC), created in 2009 by Satoshi Nakamoto, is the original cryptocurrency. As with most cryptocurrencies, BTC runs on a blockchain or ledger that records transactions distributed across a network of thousands of computers. Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, Bitcoin is secured and protected from fraudsters.

The price of Bitcoin has skyrocketed as it has become a household name. In May 2016, you could buy one Bitcoin for around £370. On July 5, 2023, the price of a single Bitcoin was approximately £24,207.

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2.Ethereum (ETH)

• Market Capitalisation: £183 billion

Ethereum is both a cryptocurrency and a blockchain platform and is a favorite of program developers because of its potential applications, such as so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).

Ethereum has also experienced tremendous growth. From April 2016 to the end of July 5, 2023, the price went from about £8 to about £1,523.

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3. Chain (USDT)

Unlike some other forms of cryptocurrency, Tether (USDT) is a stablecoin, meaning it is backed by fiat currencies such as the US dollar and the euro and hypothetically holds a value equal to one of those denominations. In theory, this means that Tether’s value should be more consistent than other cryptocurrencies, and it is favored by investors wary of the extreme volatility of other coins.

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4. Binance Coin (BNB)

Binance Coin (BNB) is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. Since its launch in 2017, Binance Coin has expanded beyond just facilitating transactions on Binance’s exchange platform. Now it can be used for trading, payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.

In 2017 it was priced under 10p. By July 5, 2023, the price had increased to around £191.56.

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5. US Dollar Coin (USDC)

Like Tether, USD Coin (USDC) is a stablecoin, meaning it is backed by US dollars and aims for a ratio of 1 USD to 1 USDC. USDC is powered by Ethereum and you can use USD Coin to complete global transactions.

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6. XRP (XRP)

Created by some of the same founders as Ripple, a digital technology and payment processing company, XRP on that network can be used to power exchanges of various types of currencies, including fiat currencies and other major cryptocurrencies.

At the beginning of 2017, the price of XRP was £0.004. As of July 5, 2023, the price has reached £0.38.

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7.Cardano (ADA)

A little later on the crypto scene, Cardano (ADA) stands out for its early embrace of proof-of-stake validation. This method speeds up transaction time and reduces energy consumption and environmental impact by removing the competitive, problem-solving aspect of transaction verification in platforms like Bitcoin. Cardano also works like Ethereum to enable smart contracts and decentralized applications, which powers ADA, its native coin.

Cardano’s ADA token has experienced relatively modest growth compared to other major crypto coins. In 2017, the price of ADA was about 1.5 pence. As of July 5, 2023, the price was £0.23.

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8. Dogecoin (DOGE)

Dogecoin started as a joke in 2013, but quickly evolved into a prominent cryptocurrency thanks to a dedicated community and creative memes. Unlike many other cryptos, there is no limit on the number of Dogecoins that can be created, making the currency susceptible to devaluation as the supply increases.

The price of Dogecoin in 2017 was £0.00016. In July 2023, the price was £0.05.

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9. Litecoin (LTC)

Litecoin (LTC) was designed as a fast and cheap way to make payments using blockchain technology. LTC is based on Bitcoin but has a block time of only two and a half minutes with extremely low transaction costs.

LTC has increased in value from £41.70 last year this time to £82.58 on July 5, 2023, likely as the August halving approaches – when the reward for Litecoin miners is reduced from 12.5 LTC to 6.25 LTC, effectively halving the rate of supply.

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10. Solana (SOL)

Solana was developed to enable decentralized finance (DeFi) usage, decentralized apps (DApps) and smart contracts and runs on a unique hybrid proof-of-stake and proof-of-history mechanism to process transactions quickly and securely. SOL, Solana’s native token, powers the platform.

When it launched in 2020, SOL’s price started at £0.57. On July 5, 2023, the price was around £15.20.

*Market caps and prices sourced from coinmarketcap.com, as of July 5, 2023.

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Crypto FAQs

What are cryptocurrencies?

Cryptocurrency is a form of currency that exists exclusively in digital form. Cryptocurrency can be used to pay for online purchases without going through an intermediary, such as a bank, or it can be held as an investment.

How is trading cryptocurrencies different from stocks?

While you can invest in cryptocurrencies, they are very different from traditional investments such as stocks and shares. When you buy stock, you buy an ownership share of a company, which means you have the right to do things like vote on the company’s direction. If that company goes bankrupt, you can also receive compensation once creditors are paid from the liquidated assets.

Buying cryptocurrency does not give you ownership over anything other than the token itself; it is more like exchanging one form of currency for another. If the crypto loses its value, you will not receive anything afterwards.

There are several other important differences to keep in mind:

• Sales hours: Shares are only traded during trading hours. For example, trading hours for the London Stock Exchange run from 8 a.m. to 4:30 p.m., Monday through Friday. Cryptocurrency markets never close, so you can trade 24 hours a day, seven days a week.
• Regulation: Stock trading is subject to regulation and the finances of listed companies are public records. Cryptocurrencies, on the other hand, are not regulated investment vehicles, so you may not be aware of the inner dynamics of your crypto or the developers working on it.
• Volatility: Investing in both stocks and cryptocurrency involves risk; the money you invest may lose value. However, stocks are directly linked to companies and generally rise and fall based on the performance of those companies. Cryptocurrency prices are more speculative – no one is quite sure of their value yet. That makes them much more volatile and influenced by something as small as a celebrity’s tweet.

Do you have to pay taxes on cryptocurrency?

When buying and selling coins, it is important to pay attention to cryptocurrency tax rules.

Cryptocurrency is treated as a capital asset, like stocks, rather than cash. That means if you sell cryptocurrency for a profit, you will have to pay capital gains tax. This is the case even if you use your crypto to pay for a purchase. If you receive a greater value for it than you paid, you owe tax on the difference.

Are There Any Cryptocurrency Exchange-Traded Funds (ETFs)?

Given the thousands of cryptocurrencies in existence (and the high volatility associated with most of them), it’s understandable that you’d want to take a diversified approach to investing in crypto to minimize the risk of losing money.

Cryptocurrency ETFs started appearing in late 2021.

How do you buy cryptocurrency?

You can buy cryptocurrencies through crypto exchanges, such as Coinbase, Kraken or Gemini.