Australian investors are increasingly adding cryptocurrency to their portfolios in a bid to diversify during times of economic uncertainty. However, with hundreds of different cryptocurrencies to choose from, it can be difficult to know where to invest your money.
This guide to the best cryptocurrency to invest in explains the key options at your disposal, the pros and cons of the leading cryptocurrencies and where to buy crypto currency online. Our top recommendations include Bitcoin, Ethereum, Litecoin, and Ripple. Be sure to use our exchange comparison to see where you can invest in these cryptocurrencies.
Pseudonymous investor Satoshi Nakamoto kickstarted the crypto revolution when he mined the genesis block of Bitcoin (BTC) in January 2009. It has gone on to become the largest cryptocurrency by a considerable margin.
Bitcoin is the original decentralized online currency, which facilitates quick, safe and cost-effective peer-to-peer transactions between wallet holders. It can be used to buy houses, cars, luxury goods, food, drinks, services and much more. Some people even use it to pay for their funerals.
Yet many investors now treat Bitcoin more like gold than a digital currency. Nakamoto capped the total supply at 21 million coins, and that has led to Bitcoin growing increasingly valuable as supply dries up.
Miners need to confirm transactions by grouping them into blocks, keeping the blockchain consistent, complete and unalterable, with recipient nodes verifying the blocks. The reward for mining a block is halved roughly every four years, and that will continue until the last Bitcoins are issued in 2140.
Increasing scarcity theoretically pushes the prices up if demand remains high, and demand has increased in recent years after institutional investors jumped aboard the bandwagon. That instils confidence in the future of Bitcoin, and many consider it the best crypto to invest in.
Rivals have sought to improve upon it. For example, Bitcoin Cash, created in a hard fork in 2017, allows for quicker transactions. However, Bitcoin is far more widely adopted than any other cryptocurrency, and legions of Australians buy Bitcoin every day, so it is likely to remain prominent while altcoins fall by the wayside.
All cryptocurrencies are volatile and prone to wild fluctuations in price, but many consider Bitcoin to be the best cryptocurrency to invest in 2023, due to its large market cap, broad range of backers and increasing popularity with institutional investors. Some fear a regulatory crackdown, but others argue that increased regulation would be good for the coin’s future health.
If you are seeking to buy cryptocurrency Australia, or wondering, should I buy crypto, it is advisable to include Bitcoin in your crypto portfolio. There have been long bull runs and bearish periods over the past decade, but the broad trajectory is upwards and many believe it will end up with a far larger market cap than gold.
Ether (ETH) is the native token on the Ethereum network, a popular open-source blockchain that facilitates smart contracts. Ether is the second largest cryptocurrency by market cap, and it is actually larger than the next 20 combined.
It began life in 2013 as the brainchild of Russian-Canadian programmer Vitalik Buterin. The Ethereum blockchain went live in July 2015, with 72 million ETH coins pre-mined. Unlike Bitcoin, there is no limit to the amount of Ether that can be issued, which potentially makes it more scalable.
Ether is an interesting option for anyone seeking the best cryptocurrency to invest in. You can buy Ethereum at all the leading exchanges that allow you to buy cryptocurrency online Australia, and it has a number of real-world uses.
However, its greatest strength is arguably its inextricable links to the Ethereum blockchain, which has very broad acceptance and authenticity. Its stated goal is to allow users to “codify, decentralize, secure, and trade just about anything”, and it does have the potential to upgrade entire economies if its full potential is reached.
Ether itself offers very quick transaction times. Its value has also increased significantly over the past five years, and many of the leading whales that buy cryptocurrency Australia regularly hit up cryptocurrency exchanges to increase their Ether holdings.
There have been a couple of security breaches that dented its reputation – the DAO hack and Parity bug deterred crypto trading in ETH for a while – but many in the crypto community now feel that Ether is the best crypto to buy right now.
Litecoin (LTC) was an early spinoff from Bitcoin. Creator Charlie Lee said he never intended it to compete with BTC, but to complement it by allowing smaller transactions. Many therefore refer to Litecoin as the silver to Bitcoin’s gold.
It is identical in many ways to Bitcoin, featuring a proof-of-work crypto mining ecosystem. However, the supply cap is four times larger, with 84 million coins in total up for grabs. The circulating supply surpassed 65 million in 2021. Litecoin also supports faster transaction times than Bitcoin, and it uses a different hashing algorithm, so it could prove more useful for small, everyday transactions.
However, its market cap is tiny compared to Bitcoin, and Litecoin trading plummeted when Lee sold the majority of his holding in 2017. Yet Litecoin still retains a band of devotees that argue convincingly that it is the best cryptocurrency to invest in 2023. It has been adopted as a payment method by many retailers, service providers and progressive financial institutions.
Its price remains volatile, but it is cheap compared to other coins, and investors that missed out on Bitcoin when it was the best crypto to invest in due to its low valuation now believe that Litecoin is the best crypto to buy now, declaring that it has huge upside.
Ripple is another innovative network that facilitates transfers, asset exchange, and remittance on its open-source developer platform. XRP is the native token for the Ripple network, and it has been on quite the journey since it was released for the first time in January 2013.
XRP trading skyrocketed in popularity during 2017, and it briefly became the world’s second largest cryptocurrency. However, its status has been hampered ever since the U.S. Securities and Commission filed a lawsuit against it in December 2020.
The SEC argues that XRP is a security as opposed to a cryptocurrency, as it is not decentralized. XRP is verified by consensus among users instead, and issued by Ripple Labs on a periodic basis. The SEC claimed that Ripple Labs executives knew it had little use case, yet proceeded with selling the crypto for their own enrichment.
The leading exchanges – places where you can buy crypto currency online – froze XRP for American investors, but Australian investors could continue to buy XRP if they felt it was the best crypto to invest in. Its value decreased sharply after the SEC lawsuit, but if you think Ripple Labs can prevail, emerge with its reputation intact and rally, XRP might well be the best cryptocurrency to invest in now.
Bitcoin Cash was created in a hard fork from Bitcoin in 2017. It stemmed from a dispute over the future of Bitcoin, as some people felt it was straying from Nakatomo’s initial vision. Bitcoin Cash is designed to be quicker and cheaper to use the Bitcoin, as the maximum block size is 8MB, compared to just 1MB in the previous Bitcoin blockchain.
Some people therefore consider it to be more suitable for online transactions than Bitcoin, which is more akin to an asset like gold. The community remains polarized, with the majority supporting the smaller blocks of Bitcoin, but a dedicated group championing Bitcoin Cash’s larger blocks.
You can take part in Bitcoin Cash trading at all the leading cryptocurrency exchanges, and many retailers accept it as payment. It also has a maximum supply of 21 million coins, and those that claim it is the best crypto to invest in now point to the improvements it has made upon Bitcoin in terms of speed and price.
This is an interesting cryptocurrency that serves as the native token on Binance, the world’s largest crypto exchange. You can buy it on other sites, but most people buy Binance Coin at Binance.
If you hold Binance Coin, you can benefit from cheaper fees when buying and selling other cryptocurrencies on the Binance exchange. The Binance crypto buy and sell platform covers a huge range of coins, many people that buy crypto currency online will hold some Binance Coin.
Binance Coin (BNB) was launched through an initial coin offering in 2017, with a total supply capped at 200 million coins. Binance uses a fifth of its profits each quarter to buy Binance Coin. It then burns them, meaning the overall supply is continually diminishing.
This would in theory push the price up in future if demand remains strong. That could largely be dependent on how Binance performs, but right now it is flourishing and many therefore see Binance Coin as the best crypto to invest in.
Tether is another interesting coin featured in many crypto reviews. It differentiates from most cryptocurrencies, as it aims to track the price of the US dollar. Tether is therefore referred to as a stablecoin amid a sea of volatility.
There was some controversy in 2019, when it was revealed that Tether was only backed 74% by cash. It previously claimed that it held US$1 in reserve for every Tether coin (USDT) issued, but it was forced to admit that Tether was actually backed by cash plus loans to affiliate companies.
That damaged Tether’s reputation, but it has actually charted a pretty stable course. It has occasionally dropped to US$0.90, or indeed increased to US$1.20, but it generally returns to US$1 pretty quickly and stays there in the longer term.
The big consideration for Australian investors is how USD will perform against AUD. If you think USD will outperform AUD under the Biden administration, Tether might be among the best cryptocurrency to invest in 2023, but if you think weakness in the US dollar will persist, you might want to look elsewhere.
You can buy crypto currency online from exchanges like Binance, Coinbase and Kraken. Most of these crypto trading sites offer you a broad range of altcoins to buy and sell. It is not advisable to keep crypto in your account – transfer it to one of your crypto wallets once you have made your purchase or sale – but you can trade a variety of coins 24/7.
We have already mentioned the most prominent altcoins – Ether, Tether, XRP, Litecoin, Bitcoin Cash and Binance Coin – but there are hundreds more on offer. Many people searching for the best cryptocurrency to invest in will weigh up the relative strengths and weaknesses of the various altcoins before making their decisions.
Polkadot (DOT) is a cryptocurrency that has recently gained a lot of attention. Ethereum co-founder Gavin Wood created its protocol in 2017 and it raised US$144.3 million in an initial coin offering. It is designed to be a scalable, heterogeneous, multi-chain technology, and many investors admire this scalability. In 2020, Polkadot overtook the likes of XRP, Litecoin and Bitcoin Cash to become the fourth largest cryptocurrency by market cap.
Stellar, Cardano, Monero, Chainlink, EOS, TRO, Neo, Dash, Dogecoin and Zcash are also popular among Australians searching for the best crypto to invest in. Just remember to conduct thorough research before you buy crypto currency online, as these coins are new and volatile, and some will probably fall by the wayside in the years ahead.
There are thousands of different cryptocurrencies to invest in, but the smaller coins are risky investments. Make sure you conduct thorough research before buying any of them. Most Australians stick to Bitcoin and Ether, which makes sense, as the future outlook for both coins looks strong.
No other coin has come close to matching Bitcoin’s dominance over the sector. It is by far the most decentralized and most censorship-resistant monetary system in the world. It has achieved finite, digital scarcity, and many intelligent investors are convinced by its future potential. Of all the alternatives, Ether appeals because the Ethereum blockchain has real-world utility.
They can complement one another and thrive in tandem in the years ahead. Bitcoin and Ether have high chances of being used in the future, and that is not the case with a lot of altcoins.
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