Bitcoin’s Top 5 Competitors: Why Investing in Them?

Top Bitcoin Rivals: Ethereum, Binance Coin, Solana, XRP, and Toncoin

Since its inception bitcoin has managed to maintain its first mover advantage as it is still the number one ranked cryptocurrency. Despite being limited in terms of DeFi many people invest in it and its derivatives such as exchange traded funds (ETFs). However, today we examine bitcoin’s top rivals. These are the other leading cryptocurrencies investors may choose to invest in due to their fundamentals. We will focus on Ethereum (ETH), Binance Coin (BNB), Solana (SOL), Ripple (XRP) and Toncoin.

Ethereum

Ethereum is a decentralized open-source network that supports various digital assets including Ether, its native cryptocurrency. Apart from supporting different digital assets like non-fungible tokens it hosts many smart contracts. As the leading altcoin ETH it usually performs well in terms of price movements. ETH is currently trading at $2,690.59 ETH/USDT after losing value by 1.9% in the last 24 hours. However, it has gained by 0.6% within the last 7 days and 63.2% within the last one year. It is also the only cryptocurrency, apart from bitcoin, that has crypto ETFs in the United States.

When you buy ETH you are not just investing in a cryptocurrency but a host of decentralized applications that have different functionalities that range from DeFi to tokenization of assets. Ethereum has a technological edge against the current blockchains. Being the second largest cryptocurrency ETH has a large market share and attracts large institutional investment. Therefore, investing in ETH may lead to high returns in the future.

However, when investing in cryptocurrency caution is required. It is not just a matter of investing at any time. One needs to study market trends and behaviour. For instance, the Ethereum MVRV ratio has fallen and risen sharply which indicates the investors have an equal chance of making profit or loss. 

Ethereum MVRV ratio – Santiment

As you note, the above graph shows the relationship between the market value and realized value which helps to show when the market is overbought or oversold.

Binance (BNB)

BNB, created in 2017, is the utility token for the Binance Smart Chain. As such, it is used to pay for transaction fees on the network. Since there are many decentralized applications on the blockchain it means the coin is in high demand. The good thing about BNB is that it has real-world uses. For example, it is used as a payment for travel and accommodation, online services and entertainment. Examples of firms that accept BNB are Monetha, HTC, TravelbyBit, Trip.io and Travala.com.

At the moment BNB is exchanging hands at $553.09 BNB/USDT at Gate.io after losing 1.7% within the last 24 hours. However, it gained by 5.8% within the last two weeks. This means those who invested in the coin during that period generated profit. During the last one year the coin gained by 155.2%. 

Solana (SOL)

Solana (SOL) is one of the largest cryptocurrency which is traded on many leading exchanges including Gate.io. It is a layer -1 blockchain, whose consensus mechanism blends the proof-of-history (PoH) and proof-of-stake (PoS) protocols. Due to this blockchain technology it is one of the fastest and safest networks. Like Ethereum, Solana has many decentralized applications that deal with web3 games, NFT platforms, DeFi and NFTs. In addition, it has various partnerships that enhance the value of SOL.

 At present, SOL is trading at $157.03 after losing by 1.5%.  Nevertheless, it has gained by 6.8% and 7.4% within the last one week and fortnight respectively. It is important to note that SOL is one of the digital assets that gained by the greatest margin within the last one year. Its value spiked by over 670% during that period. What this means is that someone who had invested $100 at the start of that period would have $670 by now. Also, according to DefiLlama the Solana network has grown significantly during the year that ended in July 2024. The next graph shows the growth of its Total Value Locked (TVL).

Solana TVL Growth - DefiLlama

Data on DefiLlama shows that SOL TVL grew to $5.452 billion during that period. 

Ripple (XRP)

XRP is a digital asset that facilitates low and cheap transactions across borders. It acts as a bridge currency for making transactions. Therefore, it becomes very fast to convert one currency to another. Currently, XRP is trading at $0.5893. However, it has not gained much within the past year due to a legal battle against the U.S SEC. Now that Ripple has been cleared of any wrongdoing, its value may rise significantly within the coming months, unless the SEC appeals against the court ruling.

Toncoin (TON)

Toncoin, developed by Telegram, is one of the cryptocurrencies touted to perform well in coming years. This coin increases financial inclusion and accessibility as people can easily send and receive it using the Telegram app. People can use it for various economic activities such as e-commerce and remittances. The following table shows some functions of TON.

Uses of Toncoin – TON

As we have discussed ETH, TON, XRP, SOL and BNB are some of the cryptocurrencies which individuals can invest in with the aim of generating profit. Since these are the leading assets with many use cases they compete with Bitcoin.