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- Cryptocurrency asset class offers numerous investment and trading options
- The higher the market value, the more liquidity
- Monero has been in circulation since 2014
- Solana offers a transparent infrastructure
- With over 9 thousand options, liquidity is critical to success
Most investors and traders have yet to enter the digital currency world, not even from the edge. But those who arrived early enough to be ahead of the masses are aware of the large number of ores in the asset class. The digital currency market offers thousands of options for those who are ready to explore value and do detailed work to find the next explosive coin.
Since the gains are always a function of risks, the more knowledge the investor has, the better.
Cryptocurrency asset class offers numerous investment and trading options
As of March 30, there are 9,022 digital currencies in the asset class other than Bitcoin and Ethereum. The number of new cryptocurrencies entering the market is increasing day by day. These 9,022 digital currencies account for 28.8% of the asset class’s total market value.
As digital currencies mature, liquidity will also increase. In this process, the number of different digital currencies will likely peak and decline at some point, as most digital currencies fail to reach the critical mass required to survive and disappear.
Volume, number of open positions and wide acceptance are the most important factors in liquidity formation. Money is a means of shopping. An illiquid shopping tool cannot support the efficient execution of transactions. As the number of digital currencies decreases, derivative instruments such as futures, options, ETFs and ETNs will be created in a core group of liquid instruments.
A more active swap or cross-token trading market will develop. We are already seeing this happening with the most popular crypto currencies. Coinbase’s initial public offering will continue to contribute to this maturation process as a well-capitalized exchange platform makes you forget memories of the collapse of Mount Gox.
Creating a liquid and transparent trading environment is a critical step in the growth of the asset class.
The higher the market value, the more liquidity
In the digital currency world, liquidity is a function of market value. Bitcoin and Ethereum have become highly liquid.
All other cryptocurrencies have a market capitalization of less than $ 48 billion. Only seven names are between 25 and 41 billion dollars in size. 30 cryptocurrencies have a market of over $ 4 billion.
Monero and Solana are among the top 26 names in the cryptocurrency hierarchy.
Monero has been in circulation since 2014
As of March 30, Monero’s market capitalization was $ 4.456 billion, and the token was trading at $ 249. Monero was the sixth largest cryptocurrency.
Source for all charts: CoinMarketCap
Since 2014, Monero has traded between a low below $ 0.40 and a high just below $ 426. The lowest level was recorded in 2015 and the peak in early 2018, just after Bitcoin hit the $ 20,000 level for the first time.
Monero has been in an uptrend since its low of $ 35.69 in mid-March 2020.
Solana offers a transparent infrastructure
On March 30, Solana’s market cap stood at $ 5.170 billion, and the token was trading at $ 19.34. Solana was the 22nd largest cryptocurrency as of March 30.
Solana is one of the relatively new names in the asset class and has been trading since April 2020. The coin moved between just over 50 cents and a high of $ 19.34 it saw on March 30, 2021. Solana has been in an uptrend since late December 2020, when the price started to rise just below the $ 1.30 level.
With over 9 thousand options, liquidity is critical to success
Liquidity is a critical factor for survival in the cryptocurrency world. Only 41 coins, or less than 0.46% of the total number, have a market capitalization of over $ 3 billion. 55 names, or 0.61% above the $ 2 billion level.
Both Monero and Solana are among the best digital currencies. Although their current position in the ranking does not guarantee their success, they are much more likely to survive compared to thousands of other digital currencies in the asset class.
More and more new members are joining the cryptocurrency world every day. The rankings are changing every day. Ultimately, as the asset class matures, liquidity will weed out weaknesses.
Trading or investing in cryptocurrencies requires detailed research and some luck. The higher the knowledge, the better the investor’s chance of success. One of the first things to look at is liquidity. Changes in market value will tell you whether a digital currency has the potential to reach critical mass levels.