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Why Monero And Solana Are Top-Tier Cryptocurrencies

By Andy HechtCryptocurrencyApr 01, 2021 04:23AM ET
www.investing.com/analysis/why-monero-and-solana-are-toptier-cryptocurrencies-200570495
Why Monero And Solana Are Top-Tier Cryptocurrencies
By Andy Hecht   |  Apr 01, 2021 04:23AM ET
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This article was written exclusively for Investing.com

  • The crypto asset class offers many investment and trading options
  • The higher the market cap, the greater the liquidity
  • Monero: around since 2014
  • Solana provides an open infrastructure
  • With over 9000 tokens, liquidity is critical for success

As the two digital currencies with over 72% of the asset class’s market cap Bitcoin and Ethereum get all of the press. Futures contracts for both have also helped increase their profiles. ETF products, when they arrive, will do even more.

Most investors and traders have not come close to dipping a toe into the digital currency world. However, those with the foresight to become crypto devotees early enough to get in ahead of the crowd know that in the asset class there are many diamonds in the rough—along with many more duds. The digital currency market offers thousands of choices for those willing to do the work necessary to uncover value as well as the next explosive token.

Monero and Solana are two tokens that are in the top tier of the crypto hierarchy. As with any market, those who do the homework to uncover real value have the best chance to profit. In an asset class that is barely over a decade old, there are many risks and opportunities.

Since rewards are always a function of risks, the greater an investor's knowledge, the better.

The crypto asset class offers many investment and trading options

As of Mar. 30, 9,022 digital currencies aside from Bitcoin and Ethereum make up the entire asset class. The number of new tokens coming to market rises each day. Those other 9,022 coins make up 28.8% of the market cap.

As digital currencies mature, liquidity will build. As that occurs, the number of tokens is likely to peak, then decline as many fall by the wayside because they will not build the critical mass necessary to survive.

Volume, open interest, and widespread holdings are key factors for building liquidity. A currency is a means of exchange. An illiquid means of exchange does not support efficient transactions. As the number of tokens declines, a core group of liquid instruments will foster derivative products, including futures, options, ETFs, and ETN products.

A more active swap or inter-token trading market will develop. We already see this happening with the top-tier tokens. The Coinbase IPO will continue to foster the maturation process as a well-capitalized exchange platform will erase memories of the Mount Gox collapse.

Creating a liquid and transparent trading environment is a critical step in the asset class’s growth.

The higher the market cap, the greater the liquidity

Liquidity is a function of the market cap in the digital currency world. Bitcoin and Ethereum have become highly liquid.

Bitcoin’s over $1.1 trillion market cap was more than five times Ethereum’s $213.4 billion market valuation at the end of last week. The liquidity quickly shrinks once we go even lower on the list.

All other tokens have market caps below the $48 billion level. Only seven are worth between $25 and $41 billion. Thirty tokens have market caps over the $4 billion level.

Monero and Solana are among the top twenty-six in the cryptocurrency hierarchy.

Monero: around since 2014

Monero is a privacy-focused cryptocurrency first released in 2014. It uses a public ledger which means anyone can send or broadcast transactions, though no outside observer can identify the source, amount, or destination. A full description of Monero is available on its website, Mymonero.

On Mar. 30, Monero’s market cap was at the $4.456 billion level, with the token trading at $249. Monero was the twenty-sixth leading cryptocurrency.

Monero Chart
Monero Chart

Source, all charts: CoinMarketCap

Since 2014, Monero has traded at a low of under $0.40 and a high of just below the $426 level. The low came in 2015, the high in early 2018, just after Bitcoin hit the $20,000 level for the first time.

Monero has been trending higher since hitting a low of $35.69 in mid-March 2020.

Solana: open infrastructure

Solana is a web-scale blockchain that provides fast, secure, scalable, decentralized apps and marketplaces. Solana uses a proof of stake consensus mechanism with a low entry barrier along with timestamped transactions that maximize efficiency. Solana’s website is solana.com.

On Mar. 30, Solana’s market cap was at the $5.170 billion level, with the token trading at $19.34. Solana was the twenty-second leading cryptocurrency.

Solana is a relative newcomer to the asset class. It has been trading since April 2020. The range has been from just over 50 cents to a high of $19.34 per token on Mar. 30, 2021. Solana has been trending higher since late December 2020, when the price started to rise from just below the $1.30 level.

With over 9000 tokens, liquidity is critical for success

Liquidity is crucial for survival in the cryptocurrency asset class. Only forty-one tokens, or under 0.46%, have market caps above the $3 billion market cap level. Fifty-five, or 0.61%, are above the $2 billion level.

Both Monero and Solana are top-tier digital currencies. While their current rankings are not guaranteeing success, they still stand a far better chance of survival than the thousands of other tokens floating around in cyberspace.

The number of new entrants continues to rise. The rankings move up and down daily. Eventually, liquidity will cull the herd as the asset class matures.

Trading or investing in cryptocurrencies requires study and a bit of luck. More knowledge will improve an investor's chances of success. One of the first things to look for is liquidity. The changes in market cap will tell you if a token has the potential to build critical mass or if it is falling off the market’s radar.

Why Monero And Solana Are Top-Tier Cryptocurrencies
 

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Why Monero And Solana Are Top-Tier Cryptocurrencies

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Comments (13)
gjergji diva
gjergji diva Apr 01, 2021 1:22PM ET
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Manuel Chadora
Manuel Chadora Apr 01, 2021 12:50PM ET
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Don't be fooled there's gonna be carnage this year in crypto. Watch.
Marty Rankin
Marty Rankin Apr 01, 2021 12:50PM ET
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Great insight and advice. Due diligence is essential in order to achieve success.
AJ McGuire
AJ McGuire Apr 01, 2021 12:37PM ET
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Good to see someone promoting great cyrptos for once.
Adrian Wooldridge
Adrian Wooldridge Apr 01, 2021 12:37PM ET
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$CHAIN Games is a token with much potential. Check them out on twitter. Its not some token with no purpose.
Minister Donald
Minister Donald Apr 01, 2021 12:36PM ET
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Top info
Billy Bilnaad
Billy Bilnaad Apr 01, 2021 12:34PM ET
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Looks like an ordinary attempt to pump these coins. The author probably holds them...?
Ryan Masilionis
Ryan Masilionis Apr 01, 2021 12:34PM ET
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I’m going to have to look into these. Personally, I’m still on the XLM wagon.
楊威利
楊威利 Apr 01, 2021 12:33PM ET
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u say monaro i call ada, 9000people will say a different thingshilling all you all like
John DaCosta
John DaCosta Apr 01, 2021 12:15PM ET
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"The higher the market cap, the greater the liquidity". For a given amount of coins, higher prices mean more liquidity? So for 20m coins, liquidity at a price of $100 per coin is more than when its trading at $60 per coin, even though the amount of flow is the same? Where did you learn this stuff?
Joel Hauser
Joel Hauser Apr 01, 2021 5:56AM ET
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Good to see investing talking about monero,the community and research those guys been doing over the years is awesome.
Joseph Chong
trader99 Apr 01, 2021 5:20AM ET
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Basically “professional” shilling
Matthew Lyons
Matthew Lyons Apr 01, 2021 5:18AM ET
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Best give THETA token and Enjin a look...if you are interested in fundamentals.
 
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