Cryptocurrencies are on the radar of every investor, seasoned or hobbyist. One of the reasons for their high profile is the returns of this dwarf even the best performing stocks.
Take for example the roughly 25 percent return for the S&P 500 in 2021, which is nothing if we compare it to crypto assets like Axie Infinity and Solana, which gave more than 10,000 percent returns for one year in 2021. But similar to how While the S&P 500 is not representative of the entire stock market with many other listed stocks, the crypto market is not just about high market cap crypto assets like Bitcoin or Solana.
Total number of cryptocurrencies
Do we know exactly how much gold or other precious metals the Earth might contain? The thing is that we only know about “proven” reserves.
In cryptocurrencies, it comes down to the number of listings on a particular website to track prices. At the time of writing, CoinGecko and CoinMarketCap – two of the leading cryptocurrency price tracking websites – have listed 12,411 and 16,691 crypto assets respectively. According to this metric, although there are certainly tens of thousands of cryptocurrencies in the market today, the exact number is unknown.
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Why is a number so hard to come by?
Each crypto asset represents a specific project based on the blockchain. For example, Ether and AXS are the original tokens of Ethereum and Axie Infinity respectively.
These distributed ledger-powered projects can be set up by anyone at any time. Release of new code for such a project is not important. Unlike fiat currencies like the dollar, the supply of cryptocurrencies is not regulated. Any new venture, such as a music streaming site or a blockchain-based game, can freely put its crypto assets on the market.
How many cryptocurrencies are tradable?
Currently, cryptocurrency is one of the most tradable and speculative assets. If someone bought Bitcoin at $29,000 at the beginning of 2021, they can sell it today at $42,000 to lock in the profit.
For buying and selling, the services of price tracking sites cannot be used. Dedicated crypto exchanges are available for this purpose. The list includes Coinbase and Binance. The former allows trading in nearly 100 cryptocurrencies while the latter supports nearly 500 assets on its global platform. However, the US platform Binance only allows trading in approximately 60 cryptocurrencies. In Canada, locally headquartered exchanges such as Bitbuy offer trade in a relatively smaller number of cryptocurrencies.
According to this metric, the total number of cryptocurrencies depends on the cryptocurrency exchange that the investor chooses.
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What is the best cryptocurrency?
There is no single cipher that can be described as the best. Cryptocurrencies with a high market capitalization are as volatile as those with a low market capitalization. There have been cases where modest altcoins have reduced the returns of large companies such as Bitcoin and Ether within a certain time frame.
Image description: Bitcoin vs. Axie Infinity in 2021
Data provided by CoinMarketCap.com
As of now, cryptocurrency investments are only profitable when the asset is bought and sold at the right time. Which asset is less important.
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It is impossible to track the exact number of cryptocurrencies. The project may sell its original token to a tight-knit group of investors, and the wider world may have no idea about that. The same token may become the top performing cryptocurrency during a certain period, say one day or one week. Investors, especially retail investors, should be careful about whether a blockchain project is legitimate before making any investment decision.