Are there too many cryptocurrencies?
Are there too many cryptocurrencies? Choice can be a good thing, but not all digital assets are created equal.
Use case
The cryptocurrency industry has grown at a staggering rate. There are now nearly 21,000 different parts, in a variety of subsectors. From metaverses to decentralized finance, investors are spoiled for choice.
But a burning question, especially among crypto skeptics, is: are there too many cryptocurrencies? We have seen many times how new altcoins can be created in the blink of an eye. The tokens appeared hours after Will Smith slapped Chris Rock at the Oscars – pumping and dumping on low liquidity. And after Queen Elizabeth's death, the markets were flooded with an avalanche of "memecoins" bearing her name. Some critics felt it was in poor taste and claimed it was "a bad look for crypto".
Despite the proliferation of thousands of cryptocurrencies, some with names inspired by major coins, Bitcoin and Ethereum continue to dominate. Combined, the valuations of these two digital assets represent a 58.2% share of the overall market. All of this leaves altcoins fighting for a much smaller slice of the pie.
Is choice a good thing?Let's start by discussing the arguments in favor of this overwhelming assortment of cryptocurrencies.
Although Bitcoin and Ether are universally recognized and accepted, it is fair to say that many blockchain and crypto projects would prefer to have their own tokens. In some cases, it's also a necessity: football fan tokens wouldn't make sense unless Manchester City and Paris Saint-Germain were able to offer their own digital assets.
Stablecoins are another group of cryptocurrencies where a variety of options is important. While US dollar pegged assets dominate the landscape, some investors prefer to use stablecoins denominated in their local fiat currency...
Are there too many cryptocurrencies? Choice can be a good thing, but not all digital assets are created equal.
Use case
The cryptocurrency industry has grown at a staggering rate. There are now nearly 21,000 different parts, in a variety of subsectors. From metaverses to decentralized finance, investors are spoiled for choice.
But a burning question, especially among crypto skeptics, is: are there too many cryptocurrencies? We have seen many times how new altcoins can be created in the blink of an eye. The tokens appeared hours after Will Smith slapped Chris Rock at the Oscars – pumping and dumping on low liquidity. And after Queen Elizabeth's death, the markets were flooded with an avalanche of "memecoins" bearing her name. Some critics felt it was in poor taste and claimed it was "a bad look for crypto".
Despite the proliferation of thousands of cryptocurrencies, some with names inspired by major coins, Bitcoin and Ethereum continue to dominate. Combined, the valuations of these two digital assets represent a 58.2% share of the overall market. All of this leaves altcoins fighting for a much smaller slice of the pie.
Is choice a good thing?Let's start by discussing the arguments in favor of this overwhelming assortment of cryptocurrencies.
Although Bitcoin and Ether are universally recognized and accepted, it is fair to say that many blockchain and crypto projects would prefer to have their own tokens. In some cases, it's also a necessity: football fan tokens wouldn't make sense unless Manchester City and Paris Saint-Germain were able to offer their own digital assets.
Stablecoins are another group of cryptocurrencies where a variety of options is important. While US dollar pegged assets dominate the landscape, some investors prefer to use stablecoins denominated in their local fiat currency...
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