Cryptocurrency has become a hot topic, and we’ve all been wondering if it’s time to get involved. Bitcoin, Ether, Dogecoin, and TerraUSD are all part of the crypto universe. But which is best for you? Let’s explore their differences and the benefits of each one.
Bitcoin
The crypto market is in a state of chaos. Just months ago, the market was awash with initial coin offerings. Then, the crypto bubble burst and the prices fell. While this was the first crash in the crypto space, the current downturn is largely driven by macroeconomic factors. The Federal Reserve has increased interest rates, creating an environment less favorable to riskier assets like cryptos.
Bitcoin suffered an epic crash, falling more than 50% from its peak in November 2021. Even altcoins like Terra and TerraUSD fell sharply. The crash in bitcoin and altcoin values has catalyzed the entire crypto market.
Ether
The collapse of cryptocurrency prices has many parallels to past crashes. The hype surrounding the technology and high returns led many novice investors to buy cryptos last year, only to suffer seismic losses. The economic landscape has changed since then, and more pain is likely ahead for all markets. The Fed is raising interest rates aggressively and inflation remains high, both of which have depressed the value of many assets, including cryptos.
A decade ago, Gerald Cotton, who was fifteen years old at the time, was a founder of a crypto company that promised investors 150 percent returns within 48 hours. He died mysteriously in 2018 and his investors lost millions. The scandal led to allegations of a sophisticated Ponzi scheme, and speculation grew that Cotten faked his own death to make millions of dollars.
Dogecoin
Dogecoin is a cryptocurrency that was born from the 2013 cryptocurrency frenzy, and is currently bigger than ever. It is a cryptographically secured online network that allows you to send DOGE to other users without asking permission. Despite its popularity, however, it is not as decentralized or secure as Bitcoin.
While Bitcoin and Ethereum have more investors losing money than Doge, the latter has a lower percentage of investors suffering losses. Only 46% of Dogecoin holders are losing money, while the remainder are neutral. However, the percentage is higher for those who have held their tokens for less than a year.
Dogecoin is a cryptocurrency that has been based on memes. As a result, it is a form of “funny currency.” Unlike Bitcoin, which has an ever-diminishing supply, Dogecoin has a constantly-increasing supply. It has a market capitalization of $575 million and is currently one of the top 30 cryptocurrency in the world. It has gained so much popularity that Elon Musk has temporarily identified himself as its CEO.
Luna
The Luna cryptocurrency suffered a spectacular fall in value earlier this year, from $US40 billion to around $500 million, causing a sell-off in the broader crypto market. During the fall, many speculated that big US hedge funds and trading firms were behind the crash. However, both BlackRock and Citadel Securities have denied any involvement.
The collapse was the result of a complex algorithm that was intended to stabilise the price of the coin. Despite these mechanisms, investors rushed to liquidate their digital assets faster than the algorithm could stabilize the price. In less than a day, the price of Luna fell from $US86 per coin to 0.003 US cents. That’s a 98% loss in value.
The crypto market has continued to suffer since the fall. While investors enjoyed profitable years in 2020 and 2021, the recent backlash has left them reeling. While Luna’s value dropped from $20 billion to a mere $0.00 on Binance, the fall in value spread to other major coins. In a matter of days, Bitcoin and Ethereum both lost over 20%.
