3 cryptos to watch if you are a cryptocurrency beginner

Highlights

• Tens of thousands of cryptos are in the market, and each token is native to its linked project

• To understand cryptos, beginners may focus on the below three assets, which explain a lot

• The long-term viability of all tokens could be the product of the performance of linked projects

Are cryptocurrencies safe? Someone that made a fortune by investing in a crypto asset at the opportune time may answer this with a resounding “yes,” but someone who lost money by picking an asset like the Squid Game crypto might say “no.”

This good or bad debate aside, crypto assets are popular, and at least keeping a tab on a few major assets may not be a bad idea. But these blockchain-based tokens are not easy to understand, especially when it comes to technicalities like liquidity management through decentralized finance protocols or staking of cryptos for validation purposes.

Without delving deeper into the technical bits of the cryptocurrency world, let’s focus on ones that can be watched by beginners.

1. Bitcoin (BTC)

It can arguably be said that if you understand Bitcoin, you will know what the cryptocurrency world is all about. As of writing, Bitcoin had a dominance of 43 per cent, which means the share of BTC in the total market cap of nearly 18,000 crypto assets tracked by CoinMarketCap is almost half. That said, in the past few years, Bitcoin’s share has been declining, but this has done little to diminish its status.

Bitcoin was envisioned as a digital currency, the record of which is maintained on a distributed ledger, to compete with or may be even, in time, to completely replace fiat currencies like the dollar and pound. Though only a single country, El Salvador, has legalized Bitcoin as a form of money, if the experiment brings intended returns like savings on remittances, it might become legal tender in more jurisdictions in the coming years.

But Bitcoin is largely a tradable asset today, which may create wealth when bought and sold at the right time. The value is not stable, nor does it have any set trend. Bitcoin’s price is tracked by indices of S&P Dow Jones, and companies like Tesla have invested in BTC.

Also read: BTC, DOGE & MANA: 3 cryptos to keep tabs on during Russia-Ukraine war

2. Ethereum (Ether)

Ethereum is a leading blockchain network that supports the building of new applications and even the deployment of new crypto tokens as ERC-20 assets. Ether, the network’s token, explains much about altcoins.

Altcoins are alternative to the most popular BTC, and all cryptocurrencies except Bitcoin fall under this classification. Ether can serve to understand the concept of token economics.

Here, a token serves as a medium of exchange within a particular project, which makes it native to that project alone. Ether is native to Ethereum, and all tasks within Ethereum’s ecosystem are powered by Ether.

Also read: What is Lunar (LNR) crypto?

Ether, similar to BTC, has become a tradable asset after crypto exchanges listed it. The key sentiment behind trading Ether could be the traders’ interest in the Ethereum network.

If the network gains more users and recognition, the demand for the native Ether token might see an uptick, which may lead to price appreciation. All altcoins, whether linked to a blockchain network or to a metaverse like Decentraland or to an NFT project like Rarible, have a comparable concept.

Data provided by CoinMarketCap.com 

Also read: How does Gala Games use blockchain & what is GALA’s price prediction?

3. Dogecoin (DOGE)

If Bitcoin was to compete with fiat currencies and Ether was to become a medium of exchange within Ethereum’s blockchain, Dogecoin was the product of sentiments of blockchain enthusiasts. A meme token, which means it began only as a joke, Dogecoin represents those cryptocurrencies that may not have a well-defined utility, but which may become a rage and even rise sharply in a short time.

It is claimed that Dogecoin or other tokens like Shiba Inu may eventually become tipping tokens on social media platforms. These tokens also use the peer-to-peer architecture of blockchains, which is why they could be transferred between users quickly due to the absence of intermediaries.

Tokens like Dogecoin often rise or fall on popular sentiments. For example, when billionaire Elon Musk tweeted about working with the project’s developers, DOGE price underwent a rally.

Here, vigilance must be paramount since price fluctuation in either direction could be very high as compared to Bitcoin. Though Dogecoin is today a formidable crypto, some crypto projects may be scams, which launch new tokens to be pumped and eventually dumped.

Also read: What is Rarible crypto & RARI token’s price prediction?

3 Cryptos To Watch If You Are A Cryptocurrency Beginner

Bottom line

CoinMarketCap tracked nearly 18,000 crypto assets as of writing, which means there is an abundance of blockchain-based projects. A few like Audius, with the native AUDIO token, are infusing blockchain into the entertainment industry, while some like BitTorrent, with its native BTT token, are trying to make peer-to-peer file sharing decentralized.

Any token’s long-term sustainability is probably directly linked to the viability of the project. For example, if the Audius project gains users and becomes a formidable participant in the music industry, the native token AUDIO may grow in value. In the short term, demand for any token on crypto exchanges like Coinbase can affect the price.