When Bitcoin was launched in 2009, the crypto didn’t have much competition. Gradually by 2011, several new types of cryptocurrencies began emerging, and the race was on. Today, there’s a tidal wave of cryptocurrencies and digital assets that leverage blockchain technology. Although almost all of these share a blockchain-based infrastructure, there are a few major differences that let us classify them into specific categories. Here we have curated the list of 10 types of cryptos investors should try out in 2023.
Coins And Altcoins
Although the terms ‘digital coin’ and ‘altcoin’ are used synonymously, they have unique and distinct features. A digital coin is often created on its own blockchain and serves the purpose of traditional money. It is used both as a store of value and a means of exchange between two parties.
While the term altcoin is used to refer to all cryptocurrencies other than Bitcoin. Some examples of altcoins that investors are looking at for 2023 are Litecoin, Ethereum, Namecoin, etc.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Tokens
Tokens are programmable assets that live within the blockchain of a given platform, making them non-native assets. They have more uses than just digital money. For example, it can be used as part of a software application, at the same time can be bought and sold.
An example of a token is Ether, which lives on the Ethereum blockchain and is used to make transactions on the network.
Meme Coin
As the name rightly implies, meme coins are cryptos inspired by viral memes or even a funny idea captured by an image or video on social media platforms. Meme coins are often designed to be a joke cryptocurrency, but with blockchain technology and community support, coins like Dogecoin and Shiba Inu became highly popular and marked their position as lucrative investment options.
Meme coins are a type of cryptocurrency that investors should try out in 2023, as they have become a popular choice for several investors, celebrities, and even established institutions.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Asset-backed Tokens
Blockchain-based units of value that are often pegged to real-world assets, like company shares, real estate, or commodities are known as asset-backed tokens. The tokenization of these assets makes them tradable, and rather than trading the asset, users can trade the coin.
According to crypto enthusiasts, capital locked in traditional assets would gradually move into the crypto sphere through asset-based cryptocurrencies. cUSD, PAX Gold, cETH, and cDAI are all examples of this type of cryptocurrency that investors are favoring for 2023.
NFTs Coin
NFTs, or non-fungible tokens, have enjoyed massive popularity and growth ever since they entered the crypto sphere. They are cryptographic assets on a blockchain with unique identification codes and metadata that make them distinctive. They also represent real-world items like artwork and real estate. These tangible assets are then tokenized, making them efficient enough for buying, selling, and trading, significantly reducing the probability of fraud.
NFT coins are a type of crypto coins investors should try out as they are used to support NFTs ecosystems and have become a highly profitable form of investment. Some of the popular NFT coins are Axie Infinity, Decentraland, Sandbox, etc.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Equity Token
An equity token functions as a traditional share in the underlying company, third-party asset, or venture. They were created to replace the transitional model of raising funds via IPOs and eliminate the risk of ICO scams for investors.
These tokens take their value from the company’s success or failure. Just like conventional equity certificates, equity tokens include the same contractual information but are stored on a distributed ledger instead of a share register. Enegra (EGX) and BFToken are some examples of popular equity tokens.
Metaverse Cryptocurrencies
The combination of metaverse and crypto has become a significant part of Web 3.0. Metaverse cryptocurrencies are one type of cryptos investors should try out in 2023 because of the rising demand and interest for virtual realities. These cryptos create a virtual economy for users, helping them to engage in play-to-earn models and can exchange their metaverse crypto with other users.
Some of the most popular metaverse cryptocurrencies are Enjin, Star Atlas, Flow blockchain, etc.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Stablecoins
A unique type of cryptocurrency whose value is tied to an asset like the U.S. dollar or sometimes gold is stablecoins. They are pegged to these assets to maintain a stable price and eliminate the risk of sudden market fluctuations. By doing so, stablecoins efficiently bridge the world of cryptocurrency and everyday fiat currency. Often the entity behind the stablecoin would set up a reserve and securely store the asset or even the basket of assets backing the stablecoin. A few examples of stablecoins are USD Coin (USDC), Euro Coin (EUROC), and Binance Dollar (BUSD).
Utility Tokens
A utility token is known for its real-world use case. It serves a specific use case within a specific ecosystem and allows users to perform actions on a specific network.
An ideal example of a utility token is BNB. The utility token powers the entire Binance Smart Chain and even offers discounts to traders on the main Binance exchange.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Security Token
Security token provides rights of ownership to a company. These tokens employ a physical or digital identifier that is unique to the user. But most often, these forms are relatively easy to use and convenient for users.
The Bottomline
The innovative nature of blockchain technology is one key reason cryptocurrency has become a go-to investment class for many investors and even institutions. Currently, blockchain and the concept of decentralization can be applied to all verticals in society. However, these are the 10 types of cryptocurrencies investors should try out in 2023 for diversifying their crypto portfolios.
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