10 Cryptocurrencies with the Best Performance

Cryptocurrencies are digital currencies that can be traded for classical currencies on a variety of online marketplaces (crypto exchanges). They are a highly speculative financial product. However, if you are going to take your money to the casino anyway, you should have a strategy on hand. The crypto market is confusing because the various digital currencies usually differ greatly from one another. While some are backed by serious software projects, others merely benefit from the general crypto boom.

The boom was caused by the rising prices of the pioneer currency, Bitcoin. It was listed at USD 998 on 1 January and at around USD 13,000 at the end of the year – a price increase of around 1,300 percent. According to an article in the Handelsblatt, analysts at the Saxo-Bank think it is possible for Bitcoin to reach a price of USD 60,000 in 2018. Without a doubt, Bitcoin is one of the most important cryptocurrencies. Nonetheless, it did not rank among the top performers of 2017. We list the best performing cryptocurrencies of 2017, which risk-tolerant investors should continue following this year.

Cryptocurrencies with the best performance in 2017

Number 10: Cardano (+ 2,800 %)

Cardano (ADA) launched very recently in October of 2017 and was a surprise among the emerging players on the crypto market. The developers want to create a new generation of cryptocurrencies that solve the speed and scaling problems of the first generation (Bitcoin) and the second generation (Ethereum). The renowned team of developers includes several researchers the likes of Charles Hoskinson, one of the co-founders of Ethereum. Cardano is based on their blockchain and aims to improve it through smart contracts and a simple global scalability. With a market capitalization of almost USD 5 billion, Cardano now ranks 6th in the crypto market. Last year, its price rose by more than 2,800 percent, from around 0.2 cents to over 70 cents at the end of 2017.

Number 9: Litecoin (+ 5,000 %)

Litecoin (LTC) is a Bitcoin clone and is among the oldest in the scene. The open-source software project launched in 2011 and has a market capitalization of around USD 9.2 billion, placing it on rank 5 on the crypto market. Litecoin improved Bitcoin’s protocol: Transactions can be carried out quicker and with reduced energy usage. Most recently, Litecoin hit the headlines because founder Charlie Lee sold his holdings. No wonder: After an incredible price increase in 2017, the Litecoin shot up from USD 4.33 to USD 217. This corresponds to an increase of more than 5,000 percent.

Number 8: Ethereum (+ 9,200 %)

Ethereum (ETH) is a blockchain network in which decentralized applications (dApps for short) are set up, managed, and carried out. Ethereum also made smart contracts popular. These are automated contracts that fulfill themselves once pre-defined conditions are met. With a market capitalization of around USD 52 billion, Ethereum is the second largest cryptocurrency after Bitcoin. Ethereum profited from the boom of initial coin offerings (ICOs), an alternative financing form for tech startups, which were carried out mostly on the Ethereum blockchain. Last year, the price for Ethereum went up from 8 dollars to more than USD 720 – an increase of more than 9,200 percent in one year.

Number 7: Dash (+ 9,300 %)

Dash (DASH) is a Bitcoin clone that previously operated under the name XCoin and Darkcoin. It is a peer-to-peer based cryptocurrency whose transactions are not public in the blockchain. Dash still receives a lot of criticism in the crypto scene because it does not solve any of the software problems that digital currencies deal with nowadays. The nontransparent behavior of the founders during the launch of the digital currency also leads some critics to assume a fraud.  Thanks to skillful marketing and the general crypto hype, however, Dash was also able to list a price increase of more than 9,000 percent and is now ranked 12^th among the largest cryptocurrencies with a market capitalization of around USD 3.3 billion.

Number 6: Golem (+ 9,700 %)

Golem (GNT) wants to be a type of decentralized supercomputer whose computing ability can be used by the public, for rent, or for personal use. It combines elements of cloud computing with the blockchain network, wherefore it is of particular interest to large corporations or research institutes that temporarily need more computing power to carry out specific projects. Users of the network who provide their unused computing capacity are rewarded with tokens by the cryptocurrency. With a market capitalization of approximately USD 200 million, Golem is only ranked 64^th in the crypto market. However, it saw a major price increase of nearly 10,000 percent last year: It started 2017 at around 0.9 cents and ended the year at 80 cents.

Number 5: Stellar (+ 13,750 %)

Stellar (XLM) is an open-source transaction network launched in 2014 by Jed McCaleb, founder of the American file-sharing platform eDonkey. It is an extension of the Ripple protocol based on the following idea: Instead of conducting transactions between accounts, as in Bitcoin transactions, they transmit property rights between accounts. Stellar is thus less a cryptocurrency in its classical sense but rather a system for transactions of virtual IOUs. The advantage: Stellar is significantly faster than the constantly overloaded Bitcoin network. With a market capitalization of around USD 4.3 billion, Stellar has moved up to ninth place among the largest cryptocurrencies. This was also due to the rise in the share price from around 0.2 cents at the beginning of 2017 to 33 cents at the end of the year - an increase of almost 14,000 percent.

Number 4: Ark (+ 21,930 %)

Ark (ARK) is one of the cryptocurrencies that is more a software project than a digital currency. A fork of the cryptocurrency Lisk, Ark’s team of developers wants to build a bridge between all common cryptocurrencies. If one user wants to send another a specific cryptocurrency, he can simply send Ark coins, which are automatically converted into the desired cryptocurrency upon arrival at the other end. Ark is currently ranked 51^st among the largest cryptocurrencies with a market capitalization of USD 270 million. Last year, the underdog saw a price increase of nearly 22,000 percent, starting at 3 cents in March of 2017 and climbing up to 6.50 dollar per Ark at the end of the year.

Number 3: NEM (+ 29,800)

The peer-to-peer network called New Economy Movement (NEM) launched in Japan in March of 2015. It combines elements of modern payment systems with smart contracts. With a market capitalization of around USD 2.6 million, NEM currently ranks 13^th among the largest cryptocurrencies. NEM's developers created the digital currency such that its users do not just hold on to it for speculation sake but actually use it as a means of exchange. Nonetheless, investors speculated on a price increase for NEM – with success. In early 2017, the price per NEM was just short of 0.3 cents and rose to nearly 1 dollar. This equals a price increase of nearly 30,000 percent in one year.

Number 2: Ripple (+ 36,000 %)

Ripple (XRP) is a decentralized blockchain network created for international payment processes between major banks. With a market capitalization of around USD 25 billion, Ripple is now the third largest cryptocurrency. The Ripple network enables banks to trade goods and foreign currencies faster and more efficiently than before. The network can process about 1,000 transactions per second, which makes it significantly faster than other cryptocurrencies.  As early as spring 2017, 75 major international banks, including Bank of America, UBS, and BBVA, used the payment network. At the beginning of 2017, one XRP was still trading at around 0.60 cents. At the end of the year, the exchange rate was already at 2.50 dollars - an increase of 36,000 percent within a year.

Number 1: NEO (+ 52,850)

The Chinese cryptocurrency NEO (NEO) realized the biggest price jump. With a market capitalization of USD 4.4 billion, NEO is now in eighth place among the largest cryptocurrencies – and rising. NEO originally started with the name Antshares and is China’s leading open-source blockchain project. It is comparable to the Ethereum blockchain, on which so-called decentralized applications (dApps) can be implemented, managed and executed. After fluctuating around the 20 cent level for a long time in 2017, it shot up to around 73 dollars in the course of the crypto boom. This corresponds to an increase of more than 52,000 percent in one year.

Cryptocurrencies with great potential in 2018

IOTA:

There are high hopes for the Berlin-based project IOTA (IOTA) on the crypto market. The project was launched in June with the aim to solve existing cryptocurrency problems such as transaction speed, transaction costs, and scalability, while also connecting them to the Internet of Things (IoT) application. Unlike most cryptocurrencies, IOTA does not rely on a blockchain but on a technology called Tangle. Tangle is a self-regulating “machine-to-machine” communication tool that enables payment without transaction costs. IOTA ranks 10^th among the largest cryptocurrencies with a market capitalization of around USD 3.6 billion. Last year, the Berlin-based project rose by more than 570 percent – due in part to a million-euro investment by Robert Bosch Venture Capital (RBVC).

EOS:

EOS (EOS) was founded by the software developer Brendan Blumer and Dan Larimer, the programmer behind BitShares and Steem. EOS had a financing volume of around USD 700 million and thus had one of the largest initial coin offerings (ICOs) to this day. It is the seventh largest cryptocurrency with a market capitalization of around USD 5 billion. EOS was founded on the Ethereum technology and follows the maxim “decentralize everything.” The project aims to be a serious competitor for central corporations like eBay and Facebook. The so-called proof-of-stake principle is used to ensure the necessary speed of transactions. Although EOS only launched in October, the token recorded a price increase of 840 percent last year.

Verge:

Verge (XVG) is one of last year’s big winners thanks to a price explosion of more than one million percent, though on a very low price level. Nonetheless, the up-and-coming digital currency was thus catapulted to 31^st place by market capitalization. The team of developers around Sasha Kolupaev focuses on security and anonymity to ensure a high degree of privacy. Verge uses a modern blockchain based on services such as Tor and the Invisible Internet Project (I2P) to hide personal data (IP addresses, location, etc.). The first phase of the project was completed in November 2017 with the implementation of the Wraith Protocol. This should allow users to switch between the public and private Verge blockchain quickly and easily.

Cryptocurrencies are not for beginners

This list does not claim to be complete and should not be misunderstood as a recommendation for purchases. While some of these coins are backed by a serious software project with a proof of concept (e.g. IOTA), others have rather questionable projects (e.g. Dash). In very few cases, the various tokens are associated with legal claims, such as those associated with the purchase of shares, bonds or start-up investments. Potential regulations could also take the wind out of the sails of the market and is, therefore, a factor that investors must always consider.

A major issue of the crypto market is its extreme volatility. Double-digit percentages in fluctuations are not uncommon. There is also an extremely high cluster risk because the coins are not sufficiently diversified from each other. As a result, bad trading days often result in all cryptocurrencies being in the red. The market’s dependence on the pioneering currency Bitcoin is still too great. Therefore, diversification within the segment is not possible. For this reason, cryptocurrencies are only suitable for investors with a high affinity for risk, who are experts in blockchain matters, and who can assess the underlying whitepapers in terms of technology.

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