Let’s say you already own some Bitcoin and Ethereum, and you’re looking to diversify your cryptocurrency portfolio — which altcoins should be on your radar right now? And why are altcoins even worth considering?
Bitcoin seeks to overthrow cash, as well as banks and governments, by providing a decentralised, singular currency. Ethereum on the other hand, takes this a step further to overthrow oligopolies of tech giants by providing a decentralised and singular platform for developers to create apps.
What are the top 10 altcoins?
Here, we’ve sorted the top 10 altcoins based on their market cap:
|Altcoin||Market Cap (SGD)||Price (SGD)|
|Tether (USDT)||~$83 billion||~$1.35|
|Binance Coin (BNB)||~$75 billion||~$453.66|
|Cardano (ADA)||~$60 billion||~$1.86|
|Ripple (XRP)||~$46 billion||~$1|
|USD Coin (USDC)||~$37 billion||~$1.35|
|Dogecoin (DOGE)||~$35 billion||~$0.30|
|Polkadot (DOT)||~$25 billion||~$26|
|Uniswap (UNI)||~$19 billion||~$34|
|Chainlink (LINK)||~$13 billion||~$31|
|Dai (DAI)||~$7 billion||~$1.35|
Altcoins can be roughly boiled down to 3 types:
- Utility coins
Stablecoins seek to tide the cryptocurrency volatility by backing its value to a real-world currency like Tether (USDT). Instead of trying to directly overthrow the current cash system, it seeks to improve upon it by providing a platform where everyone can just transact in it, like USDT, with none of the foreign transaction fees imposed by banks or incompatibilities of legacy technologies.
Memecoins capitalise on its virality — be it through word of mouth, online chatter or even news — to create value. Much like internet memes, memecoins do not have any real purpose aside from making fun of the current wave of cryptocurrencies or financial systems. Usually this jest drives up the price of the memecoin (like Dogecoin (DOGE) hitting record highs in May 2021) — proving the point that cryptocurrencies are just based on hype, and that anything can affect its value.
Utility coins like Binance Coin (BNB) serve as workhorses in their self-contained ecosystem. For example, you can use BNB to get discounted transaction fees whilst transacting on the Binance crypto exchange platform, or to fuel its many other activities, such as participating on other token sales or even pay for in-platform games or apps.
Below are little summaries of the 10 biggest altcoins.
1. Tether (USDT): a stablecoin for users to transact across different platforms, ecosystems and exchanges
As its name implies, Tether (USDT)’s value is tethered to the US Dollar; it aims to be the cryptocurrency version of it.
This allows it to be exchanged across different crypto exchanges with a relatively stable value — 1 USDT will always be US$1, whereas 1 Bitcoin (BTC) can be US$50,000 one day, and US$40,000 on the next.
Imagine getting ripped off by transaction fees just because Bitcoin was having a field day in the news when Papa Elon or Mommy Cathy decide to open their mouths and say nice things.
With Tether (USDT), you just buy the Bitcoin (BTC) you want, but pay for it with USDT instead of cash or whatever crypto you decide to pay it with. This way, you always pay the same transaction fee instead of the fluctuating value of BTC, or any other cryptocurrency for that matter.
Should you invest in it? No, but you should use it as a medium for transactions.
2. Binance Coin (BNB): a utility altcoin for users in the Binance ecosystem to interact with
Binance Coin (BNB) is a utility token meant to be used exclusively in the Binance ecosystem. Its main use is to offer lower transaction fees when trading cryptocurrencies on the international exchange, but it has other uses like participating on other token sales or even paying for games or apps hosted on the Binance platform.
For more info, read our full article on Binance Coin (BNB).
Should you invest in it? No, but you should buy some if you find yourself trading cryptocurrencies on the Binance International Exchange.
3. Cardano (ADA): a utility altcoin that seeks to be better than what Ethereum (ETH) currently is
Cardano (ADA) is conceptually similar to Ethereum (ETH). Both are trying to be a singular, supercomputer of sorts, where everyone uses their platforms, and no two users are more powerful than each other.
Where the difference lies is that Cardano (ADA) is still in its teething stage, but is looking promising as African nations look towards adopting its technological infrastructure to remove corruption via identity management.
There are already multiple applications of it being used in authentication, logistics tracing and government paperwork.
Should you invest in it? Yes, but it will take a very long time before Cardano (ADA) shoots up in value.
4. Ripple (XRP): a utility altcoin that enables easy remittance
Ripple (XRP) is an interesting altcoin that specifically addresses the problems around remittance.
Now, remittance has come a long way thanks to fintech startups like Wise and BigPay. These apps claim to be cheaper than banks when it comes to remitting money, although you still have to pay transaction fees with different currencies.
For example, if you remit S$100 via BigPay to your relatives in Malaysia, you only pay $1 in transaction fees. But if they remit that $100 back to you, they pay RM5 ($1.60) in transaction fees.
Ripple (XRP) is sort of like Tether (USDT), but with real cash. The idea is to just pay with Ripple (XRP) to save yourself the headache of differing forex rates and equal transaction fees.
Should you invest in it? No, but you should use it as a mode of payment when remitting with Ripple (XRP).
5. Dogecoin (DOGE): a memecoin created to show the world how absurd crypto hype is
Dogecoin (DOGE) is a cryptocurrency solely created to mock Bitcoin — just to show how much of Bitcoin’s value is based on media hype.
Whilst Bitcoin gains its value from the mass media, Dogecoin (DOGE) gets most of its value from social media clout, generating conversations and virality. Its holders are trying very hard to get its value to US$1, but even with the crypto boom in May and July 2021, it has not reached above US$0.75.
Should you invest in it? DOGE doesn’t purport to give investors any value, but that’s kind of the point. You can buy $50 worth, just for fun.
6. Polkadot (DOT): a utility altcoin that enables users in different blockchains to interact with each other
Cryptocurrencies and their corresponding blockchain networks are popping up all over the place, each with their own walled garden.
It’s like what streaming services are becoming — incredibly frustrating because you can’t get your favourite shows on one, consolidated network.
Polkadot (DOT) is a new solution that’s designed to allow cross-platform interaction, so that people on the Ethereum blockchain can transact with those on Cardano or Ripple, for example.
These interactions are not limited to monetary transactions. They could also be applications of Ethereum and Cardano in logistics tracking exchanging information
The Polkadot network’s cryptocurrency, DOT, merely gives you voting power via staking as to what features you’d like on the network. That being said, what remains to be seen is how quickly Polkadot can roll its features out for its users to hop onto its network.
Should you invest in it? Yes, but its value appreciation is similar to Cardano’s, which means it’s going to be a long time before it rises.
7. Uniswap (UNI): a utility altcoin to be used on a truly decentralised crypto exchange
Most crypto exchanges on the market are owned by private companies, with their own checking books and people running it.
It kind of goes against Bitcoin’s ethos of decentralisation in the first place. Who knows if they’ll go the way of the Big Bad Banks?
Uniswap (UNI) wants to change that with a truly decentralised crypto exchange. It touts better liquidity, time and resource efficiency.
This is by letting its users exchange and/or send crypto with one fee, paid with UNI, instead of having ridiculous tables of fees based on which cryptocurrency you want to send or withdraw.
Should you invest in it? It’s not exactly an investment for short-term gains, but if you believe that in a decentralised future, it might be worthwhile to HODL.
8. Chainlink (LINK): a utility altcoin to bridge the gap between blockchains and the real world
As mentioned in the section on Polkadot, most blockchain networks and their corresponding cryptocurrencies are walled gardens. Chainlink (LINK) aims to solve this problem by linking blockchains with the real world.
After all, much data exists outside of blockchains, such as credit card transactions, logistics, identity management — data that changes rapidly — all managed by a centralised source or authority.
The idea of Chainlink is to download all this outside data into the immutable blockchain. It uses smart contracts to execute transactions, creating a trustless and humanless system for users to interact with.
Should you invest in it? Its application is similar to Cardano and Polkadot, which may take a very long time to see returns. Buy only if you believe in it.
9. Dai (DAI): a stablecoin for people in developing nations with corrupt regimes to store their money in
Whilst DAI, USDT and USDC have the same value (all pegged to US$1), the way DAI derives its value is different from that of the other two coins.
Dai boasts truly decentralised stablecoin values because its collateral (what a crypto’s value is backed by) is backed by Ethereum-based assets, as opposed to USDT and USDC’s collateral being based on their respective shell companies’ real-world assets.
Dai’s Ethereum-based assets always maintain a bond with the US Dollar, but it can also use other cryptocurrencies as collateral. This decreases risk and increases price stability, which is great for people in developing countries with corrupt regimes.
For example, in Zimbabwe and Myanmar, citizens could not withdraw their wealth from banks because their regimes imposed daily withdrawal limits. Putting their wealth into Dai beforehand is a good way for these citizens to secure their wealth.
Should you invest in it? No. Dai is meant to be purely transactional and stable, there are no capital gains to be had.
10. What about investing in Bitcoin Cash (BCH) and Litecoin (LTC)?
I got 3 words for you: do not bother.
Bitcoin Cash (BCH) and Litecoin (LTC) are created as forks of the OG Bitcoin, which means that their value is strongly derived from Bitcoin. These coins are meant to make up for the pitfalls of the original Bitcoin network — which are mainly slow processing times and inefficient resource management.
Only get these cryptocurrencies if you find yourself making a lot of cryptocurrency transactions within the Bitcoin blockchain — which implies that you already have some Bitcoin yourself.
Get my drift? If you’re looking to invest, getting Bitcoin directly and holding it will yield better returns.
Which altcoin should I invest in?
Of the altcoins that I’ve listed above, Cardano (ADA), Polkadot (DOT), Chainlink (LINK) and Uniswap (UNI) are the ones worth investing in if you’re playing the long game.
In order for their values to rise, their networks will need to grow in adoption rate, which is going to take a while. But they each bring a useful solution to the table and could have long-term potential.
If you’re looking to make a quick, speculative buck, you can “play” with Dogecoin (DOGE). Its value is purely speculative and based on news/social media, so you’d need to actively manage it by quickly selling whenever its price goes up. Just remember to only put in amounts that you can afford to lose, like $50.
These cryptocurrencies are easily available on crypto exchanges like Gemini or Binance Singapore, but make sure to compare the different transaction fees between these crypto exchanges! We’ve summarised 10 leading crypto exchanges and their corresponding transaction fees here.
As always, we recommend that you keep crypto investments to a small percentage of your portfolio, while balancing out its risks with safer, more established vehicles like stocks and ETFs. Read our guide on how to start investing in Singapore, as well as tons of other, more advanced guides to get ahead.
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