Analysis for 2018: Crypto-currencies with the largest market capitalization – BTC, ETH, XRP, BCH, LTC
While everyone in the crypto-currency world is waiting for the next project-beginner who will shoot, it is important to take a step back and look at the leaders who lead the whole market. These are tokens with the largest capitalization, crypto-currencies-multi-billionaires. 5 tokens with the largest capitalization – BTC, ETH, XRP, BCH and LTC. The coming year promises to be as exciting as 2017. Even more cryptocurrency will be accepted by the market, and even more, companies will adopt blockchain technology.
The top five accounts for more than 73% of the total digital currency market. Well, all these crypto-currencies kept their strong positions in 2017, but what awaits them in 2018? Will there be further corrections and market downturns? Or will growth lead them to unprecedented heights and record levels? Which of the five will be the main winner of 2018?
Bitcoin (BTC) is the first and most recognizable name in the world of crypto-currency and blockchain. In the crypto-currency markets, BTC is the most important player. Bitcoin had a remarkable run in 2017 with an increase of more than 1,000% before a significant adjustment in January. It seems that touching the bottom at $ 6,000, the BTC pushed off and went up. But there are questions – what is BTC? And how will it behave in 2018?
To understand bitcoin, you need to know its brief history. BTC created someone under the pseudonym of Satoshi Nakamoto in 2009. The goal was the decentralization of the existing financial system. Transactions were to be conducted without intermediaries, without the control of central banks, without the influence of governments on the currency. The first digital currency for blockchain-technology was created. Bitcoins can be used to buy goods anonymously because each BTC-purse consists simply of a set of numbers and can send and receive BTC to other BTC-purses. Sometimes, however, you can still install the owner of the BTC-purse by conducting an ISP-analysis. But it is still very difficult to circumvent the proposed BTC anonymity. Bitcoins can be bought on the market or obtained.
To conduct transactions in bitcoins, you must first get them. The user can receive BTC by buying them on the exchange, or by mining. Buying is the easiest way because most exchanges allow you to buy bitcoins for dollars or euros (fiat currencies). The production of bitcoins is a more complicated process, involving the use of high technologies. Modern computers with ASIC and graphics processor solve complex mathematical problems, supporting the blockchain of bitcoin. The complexity of the production of BTC is constantly growing, and the maximum amount available for production is 21 million. Given 16.9 million bitcoins in circulation, we can conclude that you can still get only 4.1 million. As far as mining is 75% of the total stock, the production process became more and more complicated. Given the cost of special equipment, more and more people prefer to buy bitcoin on stock exchanges.
Prospects of bitcoin in 2018
A couple of times in 2017 the future of the BTC looked illusory because of high commissions and long processing time of transactions compared to other crypto-currencies. This led to the appearance of a fork – Bitcoin Cash (BCH). BCH was supposed to solve the problems with the speed of transactions and growing commissions. There were some differences between the BTC and BCH developers. In the end, fork took place, and now there are two crypto-currencies – BTC and BCH. If this article were written at the time of the fork release, prior to the SegWit2x presentation, the author would insist that BTC will continue to lose market capitalization and lose to faster and cheaper crypto-currencies. However, with the new update, BTC was able to solve most of its problems, significantly reducing commissions and processing time for transactions.
BTC is the safest game for 2018, although it will not bring such high profits as other cryptocurrencies. According to forecasts, by the end of the year from bitcoin, we can expect growth of 200-400%. If this happens, the BTC will cost from $ 30,000 to $ 50,000, and this is a very realistic goal for an asset that recruited a thousand percent per year. For a “safe” investment, BTC needs to be bought and kept. Even if you bought bitcoin at a record level last year – $ 20,000, this year your investment will pay off at least 50%. BTC is the safest game in the crypto-currency world, which brings good interest returns compared to conventional financial markets.
Ethrium (ETH) is the second cryptocurrency in the market capitalization volume, which amounts to $ 87 billion. Although like BTC, ETH is a cryptocurrency, their goals are completely different.
ETH has two main tasks: first, to serve as a platform for the release of the ERC-20 token, and secondly – to give developers the opportunity to create decentralized applications (Dapp) that work on the ECH blockchain. BTC was designed to undermine established financial systems in 2009. BTC is a digital money transfer system. The main difference between ETH and BTC is that the ETH concentrates on the operation of the Dapp program code. ETH is very different from BTC because the Ethereum was designed to create conditions and opportunities for issuing new crypto-currencies in ERC-20 format, as well as developing Dapp on the ever-growing network blockchain. The way of obtaining ETH is also slightly different from the ways of obtaining BTC.
At the moment there are two options for obtaining ETH. The first one is similar to the BTC variant and any other cryptocurrency. Investors can buy ETH on the exchange. However, the process of “mining” of ETH is very different. The BTC miners solve complex mathematical problems, supporting the blockchain of bitcoins. ETH miners exclusively support the ETH blockchain system, and for every transaction on the ETH network it is used to pay commissions for Ethereum network services. These commissions are paid to the networks of mining computers that support the Ethereum.
Smart contracts are a unique option for ETH, which allows you to place transaction conditions in the transaction itself. A smart contract is performed automatically as soon as certain conditions are met. This ensures that censorship, fraud or third-party interference is impossible. Blockchain provides security and transparency of smart contracts. ETH allows developers to create any operation in a smart contract. Most blockchain can handle the code, but to a very limited extent. That is why ETH stands out against the general background and managed to become the second world’s crypto-currency market capitalization.
Thoughts of the creator and virtual machine of the Ethereum
Crypto-loans based on blockchain-system were originally developed for peer-to-peer financial transactions. Developers have faced a difficult problem of expanding the functions of existing digital currencies. The creator of ETH, Vitalik Buterin developed his own blockchain:
“I thought that other experts in the crypto-currency world wrongly approach the problem. I saw that they went by separate applications; they tried to support each use case, using the “all-in-one” protocol, like a Swiss knife. “
Such thoughts led Vitalik to create a virtual machine of the Ethereum. EVM is software of the Turing machine type, which works on ECH blockchain. EVM is unique because it allows any developer to work with the program, regardless of the programming language. EVM makes the process of creating Dapp on the blockchain air of the Ethereum very easy and efficient. Before this invention, it was necessary to develop a completely new original blockchain system or to modify the code of the existing cryptocurrency.
Perspectives of the Ethereum in 2018
ETH has many merits that will continue to shine brightly in 2018. The four main advantages of ETH:
- Protection against interference and distortion
- Zero downtime.
Immutability ensures that third parties will not be able to make changes to the data. Protection from interference and distortion is the standard of the blockchain itself, as well as security through decentralization. Zero downtime is a unique aspect of Dapp; such applications never fail, and they can not be turned off. The advantages of ETH offer excellent prospects for 2018. However, the second place in the market capitalization significantly limits the possible percentage of profits.
The biggest problems facing ETH are not internal, but external. Last year, a lot of new companies began to release tokens on the blockchain air of the Ethereum, and the Dapp platform appeared on the scene. The blockchain of ETH is increasingly overloaded, and this leads to an increase in transaction fees. This will force new developers to look for alternatives – NEO, ICX, STRAT, DRGN, etc. The only mistake ETH – revolution in the crypto-currency world of Dapp, which led to the fact that other crypto currencies began to fit into the narrow, niche market created by the Ethereum. This year, the ETH can bring a payback slightly higher than the BTC. But the risk associated with this crypto currency is also slightly higher due to the constantly growing competition.
Ripple has the third largest market – $ 42 billion, and one coin costs $ 1.09. It should be noted that XRP is not yet traded on Coinbase, but once it surpassed ETH, becoming the second coin for market capitalization. In December and January, XRP traded above $ 3.50. In the next few months, such a price can easily recover. Before predicting the movement of the price of XRP in the following months, it is important to understand what Ripple is.
Ripple is the name of the digital currency (XRP) and the network in which the XRP is sent. XRP – an open source payment system in beta, designed to help break out of the “dungeon” of financial networks. XRP wants to move away from high commissions and overcome the lack of transparency – a drawback associated with credit unions, banks and other institutions that restrict access to user funds due to commissions or delays.
XRP pays special attention to the discontent of users of banking institutions, which complicate the transfer of funds due to high commissions and delays. XRP seeks to “make the same for the money that the Internet has done for all forms of information.” The team that runs this revolutionary payment system includes Executive Director (CEO) Chris Larsen and Chief Technical Officer (CTO) Jed McCaleb. Chris Larsen was previously co-founder of E-Loan, and McCaleb was a major head of Mt.Gox before closing it. This team is backed up by prominent specialists in the crypto-currency area. A strong team and network capable of making a revolution in the financial system make XRP a confident player and the third crypto currency for market capitalization.
The partnership guarantees the distribution on the market
XRP with ease to tie the best cooperation on the blockchain-arena. While crypto currency is not beneficial, it does not cost anything. The benefit of XRP is the ability to easily, quickly and efficiently transfer funds from point A to point B, using blockchain technology that guarantees security and transparency. XRP has successfully penetrated financial markets around the world, has established reliable cooperation with banks and many other financial institutions. Among the most notable names in the list of partners XRP – American Express (AMEX), Banco Santander, SBI International and Moneygram. These are corporations of the highest echelon, known and functioning around the world. It is hardly possible to find a crypto-currency with a large percentage of acceptance among top financial institutions, given their indecisiveness in the use of a detachment.
Recently, XRP has been added to such exchanges as BitOasis (Coinbase in the UAE). Running on Coinbase, as they say, can happen already in the first half of this year. Strong partnership allocate this crypto currency among others in the market.
The Ripple Outlook in 2018
Even after a string of positive news in January and February, XRP is still 70% behind its record level. The affiliate network continues to grow. King expects that in 2018 XRP could outrun ETH and become the second Crypto currency for market capitalization. ETH has a tough competition with NEO, STRAT, ICX, DRGN and many other companies. XRP competes with other crypto currency payment systems, but it has already become firmly entrenched as the best blockchain solution for the financial sector.
Let’s imagine that a more efficient keyboard for computers was developed. Would it have spread? Most likely – no, because all of humanity has become accustomed to the existing. The world of banks, credit companies and money transfer companies chose their “keyboard”, this is XRP. XRP may not be the best, fastest or cheapest solution. But it has already gained considerable market share and is used by the largest players in the financial world, so in the near future the XRP star will not go out. King thinks that in 2018 XRP can surpass its previous record payback of investments, bypassing both BTC and ETH.
Bitcoin Cash: BCH
Bitcoin Cash (BCH) – crypto currency, which initially had a great potential. It was developed due to the fact that bitcoin has become slow and expensive to conduct transactions. This led to the appearance of fork – BCH. BCH accelerated the transaction time and lowered the commission, i.e. solved two very important problems with which the BTC fought. Now BCH is trading at $ 1,400 per coin; market capitalization is $ 24 billion.
However, most of this growth can be attributed to the addition of BCH to Coinbase (as well as those preceding the addition of HIP / insider trading). BCH is a direct result of the fork of bitcoin, which was released on August 1, 2017. The Coinbase exchange waited until the end of 2017, before releasing BCH for the owners of bitcoin on the site. The purpose of the fork was to create an alternative version of the BTC with new rules and features, as well as another development plan. Fork was successful, and the BTC was able to solve the problems in the next six months after the release of BCH.
It is not very advisable to have two coins with bitcoin with almost identical functions. As of February 2018, BCH and BTC are doing almost the same thing. BTC became faster, and commission fees for transactions were significantly lower than before, before the fork came out in August 2017. Initially, there were many reasons to transfer BTC to BCH. But then most of them evaporated, leaving the crypto-currency world with two very similar tokens. At first there was BTC, and regardless of the huge sums spent on advertising BCH, it seems that the peak of Bitcoin Cash support has passed.
Bitcoin’s Outlook in 2018
The markets will continue to recover, so BCH will grow in price accordingly. However, BCH is unlikely to outperform other crypto-currencies in this list. King will not be surprised if by the end of 2018 BCH drops out of the top five, and maybe even dozens of leaders. In 2018, a meager payback is expected, although more than in the “normal” financial markets. However, it is likely that ETH, XRP and LTC will significantly outperform BCH on the return on investment. BCH was a remarkable fork in August and brought large dividends, more than $ 1,000 (10% + dividends for BTC owners).
The remainder of 2018 should become fantastic for the crypto-currency markets. Probably, BCH will be able to keep on the wave with the rest of the crypto-currencies, but it is unlikely to outrun other major players. If we chose the “loser” of this list, unfortunately, it would be BCH.
Litecoin (LTC) is a dark horse of this list, because everyone has heard about this coin, but very few people understand the potential for its growth. Currently, LTC trades at $ 228 per coin with a market capitalization of $ 12 billion. Founded in 2011 by Charlie Lee, LTC is one of the oldest currencies on this list. So far, LTC has been of little use. Yes, LTC could be sent to the purse address, but the use of crypto currency in business and financial sector was very insignificant. Charlie Lee, the founder of LTC, sold all of his coins last December, which led to a price collapse. He promised to dedicate all working time to the development of LTC. And this can lead to a huge return on investment in 2018, starting already this week! The LTC team planned the release of Litepay on February 26, 2018, which should significantly increase the price of LTC.
Along with Litepay, in the near future LTC introduces an atomic swap (atomic exchange). Both of these events will contribute to the growth of LTC value to new record levels. Atomic exchange – the ability to trade coins between networks without involving third parties. For example, when you want to sell 50 LTC and get one BTC, you have to go to the exchange, buy and translate. And this – the commission for the transaction, commissions for exchange, commissions for trade. Atomic exchange eliminates intermediaries, such as, for example, exchanges. When this technology is introduced in LTC on different lockers, LTC users will be able to sell LTC in exchange for BTC without commissions of exchanges. This will save a lot on each transaction.
Prospects for Litecoin in 2018
LTC is a kid on our list, judging by the volume of market capitalization. First of all, it is caused by the limited usefulness of the crypto currency. ETH has grown fantastically in 2017 due to its use as a platform to launch the ICO and the network to create Dapp. With a market capitalization of about $ 12 billion, LTC has excellent growth prospects that can crowd out any currency with greater capitalization. The release of Litepay within a week, the massive spread in the market and the appearance of Atomic Swaps will create favorable conditions for LTC take-off in 2018. In 2018, many of these crypto-currencies will bring a good return on investment. But if LTC successfully launches Litepay and Atomic Swaps, then LTC will become a real star. LTC will be one of the leaders in terms of payback percentage compared to the other four crypto-currencies of this list.
While everyone in the crypto-currency world is waiting for the next project-beginner who will shoot, it is important to take a step back and look at the leaders who lead the whole market. These are tokens with the largest capitalization, crypto-currencies-multi-billionaires. 5 tokens with the largest capitalization – BTC, ETH, XRP, BCH and LTC. The coming year promises to be as exciting as 2017. Even more crypto currency will be accepted by the market, and even more companies will adopt blockchain technology.
Conclusion: LTC and XRP
All the Crypto-currencies of our list are entrenched in the leaders of the crypto-currency world. However, in 2018 there will be a reshuffle in the top five. It is expected that BCH will slowly slip from the list of coins with the largest capitalization, while LTC and XRP have a chance to rise higher. The BTC does not foresee any important events on the horizon, but bitcoin will remain the No. 1 fuel. This will strengthen the price and position of BTC as the market capitalization leader. BTC was the very first crypto currency and deserves to remain one of the most valuable assets.
The usefulness of XRP and LTC, as well as the important innovations that they have planned, offer brilliant prospects in 2018. Excessive market capitalization of the XRP slightly limits the payback period of investments in this crypto currency, and it will be difficult for it to catch up with the BTC, because this would require growth of 1000%. However, LTC can easily achieve a 1000% growth this year, which would result in LTC price of $ 2,000 while maintaining a much lower capitalization than BTC. The spread and utility of ETH in 2017 led to a sharp price increase. Now LTC and XRP are fighting for distribution and recognition of usefulness. As soon as this happens, we can expect the growth of XRP and LTC in a geometric progression, like ETH in 2017.
ETH will remain a confident player, but it will not be No. 1, because the masses will not change their “keyboard” anymore. ETH has strong competition and constant concern about the government’s regulatory decisions. In 2018, a good recovery of ETH is expected, but the payback of this crypto currency is likely to yield to the return on LTC and XRP.
BCH is the main loser of the list. The utility of the crypto currency is decreasing with the growth of BTC. The development plan does not look inspiring, and it seems that the main emphasis is on the bitter confrontation between BCH and BTC for the title of “best” bitcoin. This confrontation should not bother you, because we are striving to find the leader from the top five with the highest payback in 2018. Concentrating on public debates with BTC, the BCH team lost the usefulness of its token out of sight. The lack of a clear direction and development center makes BCH the least recommended choice from the list.
The entire crypto-currency market will continue to recover and set new records in 2018. However, among our top five leaders there are clear winners.
Here is our rating for 2018 in order of decreasing percentage of investment return: