The past year was a wild ride for cryptocurrency investors. After the approval of spot Bitcoin ETFs in Q1 of the year, markets took some time to digest that the SEC has paved the way for approval of spot Ethereum ETFs also before giving them a go-ahead in May. As a result, spot Bitcoin ETFs managed to garner over $50 billion in combined assets in less than 6 months of trading. Some market experts believe this was the most successful ETF category ever launched.
Apart from the spot offerings, crypto-themed ETFs performed significantly well in 1H 2024. For example, First Trust SkyBridge Crypto Industry & Digital Economy ETF has seen a healthy run of over ~20% on a YTD basis. Blockchain-focused products have seen a lot of traction from enthusiasts. Amplify Transformational Data Sharing ETF went up by over ~19% on a YTD basis.
Al and Crypto- An Intersection You Should Know About
In recent months, Artificial Intelligence has been incorporated into the crypto world. AI tokens refer to cryptocurrencies directly associated with an Al venture. Al tokens demonstrate cryptocurrencies that are developed to support Al-based projects, applications, and services. These include decentralized Al marketplaces, and Al-driven decentralized autonomous organizations, among others.
The users are allowed to use tokens for the payment of services or access data on the platform. On the other hand, the platforms can make use of tokens in the form of rewards to incentivize users. Such tokens could be utilized to offer the holders some governance rights. CoinMarketCap reported that the market cap for artificial intelligence and big data cryptocurrency projects saw a healthy increase of more than ~70% in just a few weeks. This hints at the renewed confidence in crypto investors.
Regulation of Cryptocurrency and Related Exchanges
The meltdowns seen in the crypto industry, such as FTX, put a direct spotlight on the rules and regulatory concerns of the broader industry. The fall of the leading cryptocurrency exchange was primarily because of the lack of regulation at that time. However, government entities are now quite active in placing enforcement rules. The Securities and Exchange Commission (SEC) is the nation’s most active watchdog in the crypto market.
CNBC reported that the US has been one of the most active regulators who has enforced legal action against crypto companies. The Securities and Exchange Commission has sued two major crypto exchanges. The clear and well-defined regulatory standards can make the way for institutional investors, like banks, and asset management companies, to make investments in crypto assets.
As per a bi-annual survey conducted by KPMG in Canada and the Canadian Association of Alternative Assets and Strategies (CAASA), ~22% more financial services organizations decided to offer crypto-asset products and services to their client base in 2023 as compared to 2021. Also, ~26% more institutional investors included crypto-related assets in portfolios in 2023 as compared to 2021.
Coinbase highlighted that updated 2Q 2024 13-F filings demonstrated that there was a strong increase in institutional inflows in the US spot Bitcoin ETFs. This seems to be a “promising indicator” for the Bitcoin market as per the company. The recent 13-F filings revealed that institutional ownership of such ETFs saw an increase from 21.4% to 24.0% between Q1 of 2024 and Q2 of 2024.
Cryptocurrency Outlook
As per the United States International Trade Commission, the global revenues earned by tokenized asset exchanges equated to ~$26.5 billion in 2022. Of this, ~76% of the revenues came from cryptocurrencies.
The revenues from tokenized assets went up significantly in 2021 due to growth in nonfungible tokens and an increase in the price of major cryptocurrencies. McKinsey believes that total tokenized market capitalization is expected to reach ~$2 trillion by 2030 (excluding leading cryptocurrencies and stablecoins). This is expected off the back of the adoption by mutual funds (MFs), bonds and exchange-traded notes (ETN), loans, and securitization, along with alternative funds.
Globally, the crypto market capitalization exceeded $2.5 trillion (as per Forbes), with the world’s largest cryptocurrency setting a record high of over $73,000. Its market cap reached $1.4 trillion in mid-March 2024. The cryptocurrency market should reach ~$6.6 billion in 2024. Forbes also reported that the users in the cryptocurrency market should reach 107.30 million by 2025.
Growth in the cryptocurrency market should primarily be led by higher acceptance and adoption of cryptocurrencies by institutions and individuals, increased usage of decentralized finance (DeFi) platforms, advancements in blockchain technology, and higher usage for cross-border transactions.
A close-up of a person’s hands holding cryptocurrency coins.
Our methodology
We sifted through several communities, subreddits, and threads, and narrowed our list to the 12 best cryptocurrencies by selecting the trending ones. Finally, these have been ranked in ascending order of their market capitalization, as of August 29.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12) Donut (DONUT)
Market capitalization as of August 29: $0.70 million
Donut (DONUT) is an ERC-20 token, signifying community points within r/ethtrader. This was the first cryptocurrency token that was distributed to participants based on the quality of their submissions and activity. Donut tokens are distributed monthly considering the number of upvotes users receive when posting content.
Donut operates in the form of rewarding users of r/ethtrader for the contributions made by them. The tokens can be utilized to vote in governance polls. This means that more Donuts will demonstrate a greater weight in the vote. Therefore, the potential use cases for Donut are mainly in r/ethtrader. As an ERC-20 token, it is safeguarded by an elaborate network of Ethereum miners working in concert to make sure that transactions are finalized quickly and irreversibly.
11) MM Token (MM)
Market capitalization as of August 29: $1.2 million
Million (MM) refers to the decentralized digital currency which is designed with the concept of scarcity in mind. Its uniqueness lies in the fact that it has a fixed supply of one million. It is designed to maintain a value equivalent to 1 USDC. Unlike traditional stablecoins, MM has been designed with the potential for its value to fluctuate. More often than not, MM is referred to as the social experiment because of its unique design and growth potential.
Million operates on multiple blockchain networks like ERC-20 and BEP-20 token, respectively. Initially, it was supported by its founder’s resources, and it was decided that the peg of Million would be maintained with his resources, so it has a value equivalent to 1 USDC. Million supports DeFi features, which include a decentralized governance DAO for stakeholder rights. It is deflationary as there will never be more than 1 million MM in circulation.
10) Atletico De Madrid Fan Token (ATM)
M-cap as of August 29: $9.3 million
The Atletico De Madrid Fan Token is referred to as a digital asset that helps in bridging the gap between the Atletico De Madrid football club and the global fanbase. This cryptocurrency enables a unique engagement platform. Therefore, fans get to have a say in certain club decisions via a voting mechanism. It exhibits a new way for fans to interact and engage with the team beyond the traditional methods.
The primary mechanism for securing them involves the Chiliz ($CHZ) cryptocurrency. This is an ERC20 utility token on the Ethereum blockchain. The Ethereum blockchain is well-recognized for security measures, which include cryptographic encryption, ensuring that transactions are secure and immutable.
Once acquired, such tokens don’t have an expiry date and can also be used repeatedly for voting and participating in Fan Rewards.
