Bitcoin is the largest and most well-established of the blockchain-based cryptocurrencies, and it is naturally a big draw for cryptocurrency day traders.
Putting all your eggs in one basket is rarely a good thing though when it comes to trading and investing, so read on to find out a bit more about a few alternatives to Bitcoin that can be used to diversify your cryptocurrency trading.
Pretty much every online exchange for cryptocurrency will offer Bitcoin day trading, but for some of these other cryptocurrencies you might have to look around a bit more to find a suitable exchange – if exchange trading is what you want.
Ether (ETH)
Formally launched in 2015, Ether is a cryptocurrency on the decentralized software platform Ethereum, a platform that also enables Smart Contracts and Decentralized Applications (Dapps). Ether is the platform-specific cryptographic token that applications on Ethereum run on.
As of 2021, Ether is the second-largest digital currency by market cap – only Bitcoin is larger. In January 2021, Ethereum’s market cap exceeded 138 billion USD and the price of one token exceeded 1,218 USD.
Still, the difference in market cap between Bitcoin and Ether is large, and data from early 2021 showed Ether´s market cap to be less than 20% of Bitcoin´s market cap size.
What´s ETC?
Following an attack in 2016, Ethereum was split into Ethereum (ETH) and Ethereum Classic (ETC).
Tether (USDT)
Tether (USDT) is a so-called stablecoin. The stablecoins are cryptocurrencies that aim to peg their market value to something else, such as the value of another currency. The idea is to reduce volatility, while still allowing user to utilize blockchain technology to make transactions.
Tether is one of the oldest of the stablecoins and also the most well-known. It was launched back in 2014 and it aims to peg itself to the United States dollar The fact that Tether aims to be pegged to the United States dollar will of course have a huge impact on its usability for cryptocurrency speculation.
The platform for the cryptocurrency Tether is also called Tether.
In January 2021, Tether had a total market cap of approximately 24.4 billion USD, making it the third-largest cryptocurrency by market cap. Just as desired, the price of 1 Tether token was 1 USD.
Please note: Tether is not actually backed by a reserve of USD.
Litecoin (LTC)
Litecoin (LTC) was launched in 2011 as an alternative to Bitcoin for users looking for a faster block generation rate and faster transaction confirmation time.
The driving force behind the creation of Litecoin was MIT graduate and former Google engineer Charlie Lee.
Litecoin uses scrypt as proof-of-work.
In January 2021, the market cap for Litecoin exceeded 10 billion USD and the per token value exceeded 153 USD.
Monero (XMR)
Even by cryptocurrency standards, Monero (XMR) has an extremely strong focus on decentralization and privacy. It is for instance very difficult to trace, and a special technique known as ”ring signatures” is employed to boost privacy.
The development and maintenance of Monero was and is donation-based, and has garnered a strong interest among cryptography enthusiasts. This cryptocurrency was launched in April 2014, and in January 2021 the market capitalization was around 2.8 billion USD. At that point, 1 XMR token cost slightly above 158 USD.
The ”ring signature” technique makes it difficult for investigators to find the true participant in a transaction, since the true participant´s signature appears in a group of other cryptographic signatures. (In each such group, there is at least one real participant.) Among other things, Monero has been hailed as a safer way for political dissidents to carry out transactions without being found out by the regime.
Cardano (ADA)
The cryptocurrency Cardano (ADA) was created by a research-team of engineers, mathematicians and cryptographers, and it uses Ouroboros proof-of-stake. One of the main financiers behind the creation of Cardano was Charles Hoskinson of Ethereum-fame.
The blockchain for the Cardano system was created through experimentation and peer-reviewed research.
In January 2021, the market cap for Cardano was approximately 9.8 million USD. The price of 1 Cardano-token was around $0.31.
Polkadot (DOT)
The cryptocurrency Polkadot (DOT) and its system were created to deliver interoperability between other blockchains. It uses proof-of-stake instead of proof-of-work.
The Polkadot protocol is designed to connect permissioned and permissionless blockchains as well as oracles. This makes it possible for different systems to work together in an efficient manner. It the special Polkadot relay chain that makes this functional cooperation possible.
In January 2021, the market capitalization for Polkadot exceeded 11 billion USD. The price of one Polkadot token was then slightly below 13 USD.
Bitcoin cash (BCH)
Bitcoin cash (BCH) was created through one of the first hard forks of the original Bitcoin chain. Bitcoin cash (BCH) has existed since August 2017, and in January 2021 its market cap was around 8.9 billion USD. At that time, the price per BCH token exceeded 513 USD.
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