There are two very important aspects to consider when choosing a cryptocurrency to trade:
Market capitalization
This is the total market capitalization of a cryptocurrency and is usually expressed in US dollars. It indicates the level of investor and trader interest in the cryptocurrency. New traders often start with the larger cryptocurrencies. Bitcoin is the cryptocurrency with the highest market capitalization ($378.57 billion as of September 16, 2022) and controls about 40% of the market.
Price gains
Traders prefer to start trading cryptocurrencies with coins that have a good history rather than trading relatively new ones. The increase in the price of a cryptocurrency over a period of time is a good indicator of its future growth potential. For example, Bitcoin was officially launched in 2009. The value of one bitcoin has risen from less than $400 in 2015 to around $20,000 in 2022. Although trading time frames are much shorter, long-term growth is an indicator of the strength of a cryptocurrency.
Distinctive factors
The technology or strategy that underpins a cryptocurrency plays a major role in determining its performance in the market. For example:
Bitcoin introduced blockchain technology to the world. The king of cryptocurrencies also introduced the concept of a digital currency with a limited supply.
Ethereum has launched smart contracts that allow transactions to be made automatically once pre-defined conditions are met. This has helped popularize decentralized finance (DeFi). These use cases support the value of Ethereum in the cryptocurrency market.
Litecoin is the oldest cryptocurrency after Bitcoin. Due to its similarities to Bitcoin, Litecoin is often referred to as “Bitcoin’s silver to gold.”
You can trade CFDs on all of these cryptocurrencies with ADSS.
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