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Analyzing the Top 3 Cryptocurrencies: Where Are They Heading?


The cryptocurrency market is seeing a stable growth and now includes over 2,000 unique coins. All these tokens combined amount to $210 billion, which doesn’t seem impressive, especially when compared to the market cap of giant enterprises like Apple with its $1 trillion. However, if you take a closer look at the charts, you will be surprised to find that 72% ($150B) of the total cryptocurrency market belongs to three coins - Bitcoin ($112B), Ethereum ($20.9B), and XRP ($18.5). What’s behind their popularity? And will they be able to retain their power? Let’s try to sort it out.



Room for the King!

The current state of Bitcoin

Through thick and thin, Bitcoin reigns supreme in the cryptocurrency market. Call it a first-mover advantage, but the investor money is still flowing into Bitcoin, moving it to the top of the list. As of press time, Bitcoin makes up 53% of the total market cap and is the most valuable cryptocurrency with a BTC/USD price of over $6,500. Within seven days, the crypto king has fallen only 1%, which is a clear sign of low volatility. Recalling the bloodbath of early 2018, when Bitcoin was losing $1,000 each day, the current price movements are considered healthy.

What makes Bitcoin desirable for investors?

Fear of missing out, or FOMO. Bitcoin has been improving and maturing over the years now. It is arguably the most established cryptocurrency that has gained the trust of the global community and become a new benchmark for digital money. As news continues to break, chanting the praises on a peer-to-peer electronic cash, the popularity of Bitcoin grows. Many newbie investors buy into the hype for fear of losing the chance to capitalize on the hot investment.

Usability makes all the difference. Largely owing to its long-standing reputation, Bitcoin is truly the most commercially adopted cryptocurrency out there. You might not know that there are over 13,000 venues around the world accepting Bitcoin today - these include ATMs, shops, and other businesses. The industry giants like Microsoft, Overstock, Expedia, also jumped on the Bitcoin bandwagon early on and are now heading the list of retailers pushing the real-life application of cryptocurrencies.

The army of true believers is strong. Let’s face it, the traditional fiat system is outdated, and sooner or later it will be toppled by more advanced digital alternatives. Bitcoin was created to introduce a new financial order to the world. Controlled by no third parties but Bitcoin users themselves, it represents a new decentralized economy free from government intervention and manipulation. Although there’s still much controversy over the long-term viability of Bitcoin as a global currency, the community around it is strong and loyal. At present, there are over 22 million unique wallets set up worldwide; and as the Bitcoin blockchain progresses, the number of users will only grow.

However, Bitcoin does have a lot of hurdles on its way to a greater recognition. To become a truly competitive method of payment it should first solve its scalability issues, become more stable, and prove to the society that cryptocurrency is not a ‘get-rich-quick’ scheme.

Not just a currency

The current state of Ethereum

Being the second doesn’t mean being less important - this is especially true for Ethereum. The native coin of the major blockchain for smart contracts and ICOs has had a bumpy road throughout 2018. Entering the year at over $1,300, the price of Ethereum has decreased 6.5 times to $200, where it is trading now. Although Ethereum does show the signs of recovery, the community still feels demoralized.

Can the situation change?

You shouldn’t be an expert to know that the cryptocurrency market is unpredictable, and even a minor change or upgrade can lead to a shift in the balance of forces. Can it be the case with Ethereum? What does it have to offer?

The father of smart contracts. Despite the rivalry that comes from other smart-contract oriented projects like EOS and NEO, Ethereum’s leadership is unchallenged. Its blockchain hosts more than 2,000 decentralized apps and 82% of ICOs conducted in the space. Top it all, Ethereum is a go-to technology for enterprises when it comes to developing blockchain-related solutions. The organization known as the Enterprise Ethereum Alliance has already been joined by the industry whales like Hyperledger, Intel, and Microsoft, all aiming to put the Ethereum technology to industrial use. With so powerful network of backers, Ethereum is unlikely to be dislodged from its spot any time soon.

The upgrades are just around the corner. As October came, all crypto enthusiasts were chasing for the news about the long-awaited hard fork on the Ethereum network called Constantinople. The upgrade itself aims at improving Ethereum’s scalability and speed as well as introducing a more efficient economic policy. Although scheduled for October 2018, Constantinople has been delayed until early 2019 due to the fact that there are still some bugs to be fixed. However, it is not the only improvement that will come to the Ethereum blockchain soon. Casper and sharding are two highly anticipated upgrades scheduled for 2019 and 2020, respectively.

If Ethereum plays its cards right, the above-mentioned benefits can turn into a rock-solid foundation for its further growth, and thus push the ETH to USD price to new heights.

The ‘crypto VISA’ for cross-border transactions

The current state of XRP

XRP is an irreplaceable third-largest player in the cryptocurrency market. When compared to the two other leaders, XRP took the heftiest hit during the market crash of 2018. Since January the coin has been experiencing a massive plunge from almost $4 to $0.45. It has now edged into the green with a 24-hour growth rate of 4.31% and is traded in a relatively narrow range between $0.43 - $0.47.

Why XRP is still in the first rows

XRP is one of the fastest and cheapest cryptocurrencies available in the market today. If expressed in figures, a cross-border transaction in XRP will cost you only $0.00078 in terms of fees and take a matter of seconds to go through. Compare these statistics to those of other cryptocurrencies and even traditional money transfer systems, and you will see that XRP has a clear edge over them all. In March 2018, the crypto community was rocked at the news that the Ripple network upgraded to become capable of processing over 50,000 transactions per second - it is two times faster than VISA is able to do! This is the level of scalability that almost none of the cryptocurrencies has managed to achieve so far.

Another selling point of XRP is that the cryptocurrency has strong relations with banks and financial institutions around the globe. The list of Ripple’s partners includes such big-name companies as Santander, PNC Bank, MoneyGram, and so many more. Ripple has also joined forces with SBI Holdings and formed SBI Ripple Asia to cater for the needs of customers in Asian countries. As the number of Ripple’s partnerships grows, XRP will enjoy the ever-increasing base of users, and thus will enhance its position as one of the largest cryptocurrencies in the industry.

To conclude

The cryptocurrency market is full of high-potential tokens that one day might throw the current leaders into the shade. To be aware of the upcoming changes in the space, you need to closely follow the crypto news, analyze charts and recognize game-changing trends. Remember that understanding comes through learning, so spare no time and effort if you want to navigate the industry easily.

Finyear & Chaineum

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Chaineum - Conseil haut de bilan & stratégie blockchain
Conseil en opérations de haut de bilan : ICO STO advisory, levée de fonds, M&A.
Conseil, stratégie & accompagnement de projets en technologie blockchain.
Besançon - Paris + réseau international de partenaires.

Mardi 12 Mars 2019
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