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.
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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.
9) Sentinel (DVPN)
Market capitalization as of August 29: $15.26 million
Sentinel (DVPN) is a cryptocurrency token that operates on the Cosmos platform. It has a current supply of 22,464,085,716 with 12,382,850,067 in circulation. It uses a multi-chain framework to safeguard data exchange between people and programs, which includes legacy, enterprise apps, mobile apps, and dapps.
Sentinel helps in monetizing their spare bandwidth by offering a network of distributed and decentralized dVPN applications that are built on Sentinel architecture. Since it reduces the number of intermediary servers and dependencies, Sentinel dVPN protocol offers high resiliency and security for any consumer-grade VPN framework.
The users can stake the DVPN token with one or more of Sentinel’s trustworthy validators to safeguard Sentinel’s Cosmos-based Hub and dVPN networks which are built on Sentinel.
8) Tokamak Network (TON)
Market capitalization as of August 29: $46.2 million
Tokamak Network is a comprehensive blockchain platform, that has been designed to enhance the scalability and flexibility of decentralized applications (DApps) operating on the Ethereum network. It was established in 2018 by a team with deep expertise in the cryptocurrency sector. The platform addresses a critical need for increased efficiency and capability within the Ethereum ecosystem.
At its core, Tokamak Network serves as the network of Layer 2 (L2) solutions, which are networks built on top of the Ethereum blockchain to improve transaction speeds and reduce costs, without compromising security. The platform helps the development and deployment of multiple types of L2 networks, which are customized to the specific needs of its users. This flexibility enables the developers to create customized L2 solutions that can efficiently handle their DApps’ demands.
The Tokamak Network makes use of a multifaceted approach to make sure that it is secure and efficient, central to which is the usage of SNARK technology. This cryptographic method is well-recognized for its ability to facilitate privacy and scalability. Through the integration of SNARK technology, the Tokamak Network improves the security framework, making it robust against potential threats and vulnerabilities.
7) Polygon (MATIC)
Market capitalization as of August 29: $4.3 billion
Polygon, formerly called Matic Network, is an Ethereum token that powers the Polygon Network. It aims to offer faster and cheaper transactions on Ethereum through the use of Layer 2 sidechains, which are blockchains running alongside the Ethereum main chain.
Polygon joins the Plasma Framework and proof-of-stake blockchain architecture with a focus on facilitating the use of cryptocurrencies by addressing the scalability issues. The Plasma framework enables the easy execution of scalable and autonomous smart contracts. Polygon’s sidechain is safeguarded by proof of stake.
By staking MATIC, a strong network of powerful computers secures and validates this network (which helps in earning MATIC rewards in the process). The launch of Polygon 2.0 in June last year reflects a long-term plan for the four-layered scaling ecosystem. This leverages zero-knowledge cryptography to interconnect Layer 2 Ethereum networks. This update should help in strengthening the platform’s architecture.
6) Chainlink (LINK)
Market capitalization as of August 29: $6.7 billion
Chainlink (LINK) refers to an Ethereum token, that powers the Chainlink decentralized oracle network. This network enables smart contracts on Ethereum to connect to external data sources, APIs, and payment systems securely and efficiently. Its network is supported by a diverse community of data providers, node operators, along with smart contract developers. Its approach targets to integration of off-chain data in smart contracts, which helps in positioning it in the data processing field.
Chainlink operates through a network of decentralized oracle nodes. Such nodes garner data from external sources and then relay it to smart contracts. Through this process, smart contracts can interact with data that is outside of their native blockchain.
Its recent collaboration with SWIFT to transfer tokenized assets through multiple blockchains demonstrates its potential to address the gap between traditional finance and blockchain technology.
5) SHIBA INU (SHIB)
Market capitalization as of August 29: $8.2 billion
SHIBA INU (SHIB) is a token that aims to be an Ethereum-based alternative to Dogecoin (DOGE). Unlike Bitcoin, which has been designed to be scarce, SHIBA INU is intentionally abundant. As a result, it has a total supply of 1 quadrillion. Its network supports projects like an NFT art incubator and the development of a decentralized exchange called Shibaswap, where users are allowed to swap tokens, offer liquidity, and stake their holdings to get compensation.
Launched in late 2020, this Ethereum-based token is now a global phenomenon and is accepted at several locations in the form of payment, either directly or through third-party intermediaries.
Its ecosystem is not just limited to SHIB token, it also includes other tokens like LEASH and BONE. SHIBA INU operates on the Ethereum blockchain by using the power of smart contracts to facilitate transactions and other operations. What’s the difference between SHIB and Dogecoin? SHIB, unlike Dogecoin, is compatible with the Ethereum ecosystem, allowing the community to create crypto apps such as ShibaSwap. SHIBA INU managed to cultivate a sizable and devoted following that contributes to project growth and supports driving broad awareness.
4) Solana (SOL)
Market capitalization as of August 29: $67.3 billion
Solana (SOL) is a cryptocurrency that was designed to work similarly to and improve upon Ethereum. This has been named after a small Southern Californian coastal city. It was the brainchild of software developer Anatoly Yakovenko.
Like Ethereum, Solana tokens can be purchased on most of the major exchanges. Its actual value is in initiating transactions on the Solana network, which has rare advantages. The Solana blockchain makes use of a proof-of-history consensus mechanism. The algorithm utilizes timestamps to define the next block in Solana’s chain.
Solana operates by using a combination of proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanisms. The proof-of-history component represents the main element of the Solana protocol, and it is responsible for the majority of transaction processing. The PoS consensus behaves as the monitoring tool for the PoH processes, and it validates each sequence of blocks it produces. Its primary use case is to facilitate the creation of decentralized applications (DApps), with the main focus on decentralized finance (DeFi) solutions.
Solana’s distinctive scaling approach makes a strong case for those planning efficient blockchain solutions. Its focus on high-speed and low-cost operations enables it to execute thousands of transactions per second at a fraction of the cost of other blockchains. Between 1 September 2023 and 28 August 2024, the price of this token has seen a significant increase of over ~600%. Much of this increase was mainly led by the fact that it uses strong and efficient technology, has network stability, and has higher on-chain volumes.
3) Tether (USDT)
Market capitalization as of August 29: $118.1 billion
Tether was launched in 2014 as a blockchain-enabled platform. It was designed to enable the use of fiat currencies in digital form. Tether focuses on disrupting the conventional financial system through a more modern approach to money. It has made headway by providing customers the ability to transact with traditional currencies throughout the blockchain, without the inherent volatility and complexity which are present in a digital currency. It is a digital dollar, powered by blockchain technology, a stablecoin that has been pegged 1:1 to the USD.
Tether tokens exist as digital tokens that are built on numerous leading blockchains, including Algorand, Avalanche, Bitcoin Cash’s Simple Ledger Protocol (SLP), Ethereum, EOS, Polygon, Tezos, Solana, Kava, and Statemine. Such transport protocols have open-source software that interfaces with blockchains to allow for the issuance and redemption of Tether tokens. Tether token is 100% supported by Tether’s reserves.
Its unique feature is the fact that the value is guaranteed by Tether to remain pegged to the US dollar. As per Tether, when new USDT tokens are issued, it allocates a similar amount of USD to its reserves. This makes sure that USDT is fully backed by cash and cash equivalents. In May 2022, Tether announced MXNT launch, which was the new stablecoin backed by the Mexican peso. As a result of this, it expanded into the Latin American market after earlier debuts of USDT, EURT, and CNHT stablecoins, pegged to the U.S. dollar, euro, and Chinese yuan, respectively.
Tether transactions are very easy and fast, and this acts as an advantage for crypto investors and traders. The transactions that involve this stablecoin could be completed in just a few minutes. Crypto traders and investors purchase Tether as there’s no fee involved for the exchange conversion.
2) Ethereum (ETH)
Market capitalization as of August 29: $302.7 billion
Ethereum, a well-known decentralized computing platform, uses ETH (also known as Ether) for the payment of transaction fees. The developers can use Ethereum to run decentralized applications (dApps) and provide new crypto assets, known as Ethereum tokens. Ethereum is a decentralized, open-source blockchain, that aims to become a global platform for decentralized applications. It focuses on enabling users worldwide to write and run software resistant to censorship, downtime, and fraud.
Ethereum operates through a blockchain network, which works as a decentralized, immutable ledger for the recording of transaction histories. It utilizes Ether, the platform’s native digital currency, to allow computations and transaction validation in the ecosystem. Coinbase assures that its users can stake their ETH easily and safely. Through Coinbase’s built-in staking feature, any user can stake their ETH.
Ethereum has been categorized as a dominant player in the field of smart contract platforms, having the largest base of developers and users. This widespread adoption helps in creating a strong environment that can nurture growth and innovation. The Ethereum network has been upgraded to EIP-1559. This means every time someone makes a transaction, a small portion of the transaction fee gets destroyed. Over time, this will lead to fewer Ethereum coins, which can potentially increase the value of the remaining ones.
1) Bitcoin (BTC)
Market capitalization as of August 29: $1.2 trillion
Bitcoin is the world’s first cryptocurrency, which is stored and exchanged securely on the internet via a digital ledger called blockchain. Developed in January 2009, Bitcoin is a peer-to-peer online currency, enabling transactions to take place directly between equal and independent network participants. These transactions take place without any intermediary. This digital money cannot be inflated or manipulated by any person, company, or central bank.
Bitcoin’s most important innovation was blockchain, which acts like a ledger, recording every transaction ever made using this digital currency. It is different from a bank’s ledger, in the sense that the Bitcoin blockchain is distributed and verified throughout a network of computers. This means that no company, country, or third party can control it, and anyone can become its part.
The Bitcoin network saw the introduction of Ordinals NFTs and BRC-20 tokens recently. This diversification led to significant community enthusiasm and has expanded the scope.
While we acknowledge the potential of cryptocurrencies as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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