Crypto

Over the past ten years, cryptocurrencies have evolved from a niche experiment into a fully-fledged financial instrument. Today, there are thousands of coins and tokens in circulation, with a combined market capitalization reaching trillions of dollars.

There are several key areas standing out in the market:

• bitcoin and ether as base assets;
• second-tier altcoins with high volatility and speculative interest;
• stablecoins for settlements and protecting capital from fluctuations;
• DeFi tokens and NFTs forming new market segments.

For an investor, it’s important to understand that a cryptocurrency’s price is determined solely by supply and demand. Unlike fiat, there is no central issuer who can regulate the value. Therefore, the market remains high-risk, yet it offers significant opportunities to earn.

Types of cryptocurrencies

There are several main categories of digital assets on the market, each serving its own tasks and having its own features:

1. Cryptocoins (coins)
   • Have their own blockchain.
   • Examples: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC).
   • Used as a means of payment, savings, or the base infrastructure for other projects.
2. Tokens
   • Created on top of an existing blockchain (most often Ethereum, BNB Chain, Tron).
   • Divided into several types:
     • stablecoins (USDT, USDC, BUSD) – pegged to fiat currencies or gold;
     • DeFi tokens (UNI, AAVE, CAKE) – used in decentralized financial services;
     • NFT tokens – confirm ownership of unique digital assets.

3. Utility tokens
   • Used within projects or exchanges.
   • For example, BNB on Binance is used to pay fees and participate in token sales.
4. Hybrid solutions
   • Assets that combine the functions of payment instruments, investment assets, and governance tokens in a DAO.

For an investor, it’s important to consider not only the asset category but also its real-world application. The broader a coin or token’s use, the higher the probability of its long-term growth.

Key factors driving price changes

Dozens of factors affect cryptocurrency prices, but the key ones are technological, market-related, and regulatory. Below is a table with the main growth drivers and downside risks.

Для анализа динамики курса инвестору стоит отслеживать не только график цены, но и метрики блокчейна (хешрейт, активные адреса, объёмы переводов), а также новости о регулировании и глобальной экономике.

Market capitalization: how it’s measured

A cryptocurrency’s market capitalization is the main indicator by which its significance in the market is assessed. It reflects the total value of all coins or tokens in circulation.

The calculation formula is simple:

Капитализация = Цена одной монеты × Количество монет в обращении

Example:

• If 1 BTC costs $60,000 and 19M BTC are in circulation, then Bitcoin’s market cap = $1.14T.

Why it matters:

1. Reflects investor confidence – the higher the market cap, the more users have invested in the project.
2. Forms rankings – cryptocurrencies are ranked by market cap, not by unit price.
3. Shows liquidity – assets with large market cap are easier to buy or sell without strongly moving the price.

Capitalization tiers:

• Large-cap cryptocurrencies – over $10B (BTC, ETH).
• Mid-cap – from $1B to $10B (SOL, ADA, AVAX).
• Small-cap – up to $1B (new and high-risk projects).

For investors, market cap serves as a guide: large-cap assets are considered more reliable, while small-caps can bring multiple returns but carry higher risk of loss.

Investing long-term or trading

There are two main approaches to working with cryptocurrencies: long-term investing (HODL) and active trading.

Long-term investments (HODL)

Essence: buying cryptocurrency and holding it for months or years.

Speculative trading

Essence: short-term trades (from minutes to a few days) aiming to profit from price swings.

Combined approach

Experienced investors use a mixed strategy: they keep part of capital in reliable assets (BTC, ETH) for the long term, and use another part to trade altcoins. This method helps reduce risks while earning from short-term deals.

Which cryptocurrency to choose to buy

The choice of cryptocurrency depends on the investor’s goals, strategy, and risk level.

Main asset categories

1. Base coins
   • Bitcoin (BTC) — the first and most capitalized cryptocurrency.
   • Ethereum (ETH) — the second most important; supports smart contracts and DeFi.
   • Used as a portfolio “anchor” due to high liquidity.
2. Altcoins with market cap over $1B
   • Binance Coin (BNB), Solana (SOL), Cardano (ADA).
   • Attractive for their tech features (transaction speed, low fees).
3. Stablecoins
   • USDT, USDC, DAI.
   • Used to preserve capital and for settlements, but are hardly suitable for long-term growth.
4. Promising projects
   • Polkadot (DOT), Avalanche (AVAX), Near (NEAR).
   • Popular among investors seeking new technologies and high returns, but with higher risk.

Comparative characteristics

How to buy cryptocurrency

Cryptocurrency can be purchased in different ways. Each option has its own specifics regarding speed, fees, and security level.

Основные методы покупки

The future of cryptocurrencies

The prospects of cryptocurrencies depend on a combination of technological innovation, regulation, and mass adoption.

Key trends

1. Growing real-economy usage

• More and more companies accept BTC and USDT for payments.
• Services are emerging that accept crypto for everyday needs (tourism, e-commerce).

2. Development of DeFi and Web3

• Smart contracts and decentralized apps are becoming the industry’s driver.
• Projects on Ethereum, Solana, Avalanche attract capital via staking, lending, and liquidity.

3. Integration of stablecoins and CBDCs

• USDT and USDC have cemented themselves as the main settlement assets.
• Central banks are testing CBDCs that may compete with private stablecoins.

4. More focus on security and privacy

• Privacy coins (XMR, ZEC) and solutions like CoinJoin are gaining popularity.
• Investors seek wallets with enhanced protection and multisig.

5. Regulation

• The EU has MiCA; in the US, new stablecoin laws are under discussion.
• Clear rules will increase institutional investor trust.

Pros and cons of the crypto future

The cryptocurrency market is developing rapidly and remains high-risk, but at the same time it opens up new opportunities for investors and traders.

Key takeaways:

• Digital assets fall into two main categories: coins with their own blockchain (BTC, ETH, SOL) and tokens that operate on existing networks (USDT, DAI).
• Crypto prices are influenced by network technical parameters, the global economy, news flow, as well as actions by regulators and major market players.
• Investors can choose a strategy: long-term holding of reliable assets or active trading for quick profits.
• Purchases can be made via online exchangers, P2P platforms, centralized exchanges, and decentralized services.
• The future of crypto is tied to the growth of DeFi and Web3, the adoption of stablecoins, and regulation, making the market both more mature and more controlled.

Main recommendation: diversify risk. Build the long-term part of the portfolio from base coins, and use promising altcoins and new projects for experimentation.

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