Liquidity refers to the ease and speed at which a digital asset can be bought or sold. When the trade volume is high, it denotes that the asset has more liquidity. The higher the liquidity, the more stable the cryptocurrencies will be. Therefore, investors looking for a stable cryptocurrency to invest in may choose one with a high trade volume.
Types of cryptocurrencies range from Ethereum to Bitcoin to Dogecoin. Therefore, it can be overwhelming for a beginner to choose a cryptocurrency for their investment. Here are some cryptocurrencies with high liquidity for investors to choose from.
Bitcoin was launched in 2009 by an anonymous person by the name of Satoshi Nakamoto. Bitcoin or BTC is the original coin of the cryptocurrency. This cryptocurrency also operates on blockchain to carry out transactions across the network consisting of several computers. Any addition to this distributed ledger has to be verified by efficiently a given cryptographic puzzle. Bitcoin remains safe and secure against fraudsters.
Ethereum serves as a blockchain platform and a cryptocurrency. The smart contracts and their potential in developing applications make Ethereum a favorite of several developers. This cryptocurrency has been experiencing rapid growth for the past few years.
Tether is different from some types of cryptocurrencies because it is a stablecoin. It is backed by popular fiat currencies like Euro and the US dollar, offering a value equal to any of these units. Thus, the value of Tether remains more consistent when compared to other cryptocurrencies. So investors who fear extreme volatility may choose Tether.
- Binance Coin
Binance Coin is used to pay fees and to trade on the popular crypto exchange, Binance. It emerged in 2017 and since then, it has grown beyond its major goal of facilitating various options for their exchange. Now, Binance Coins can be used for trading, booking travel arrangements, or payment processing. It can also be exchanged or traded for other popular cryptocurrencies.
XRP was developed by a popular payment processing and digital technology company, Ripple. XRP is widely used in different exchanges to convert cryptocurrencies to other popular coins and fiat currencies.
Cardano is a bit late to the market, however, it is a pioneer in adopting proof-of-stake validation. It speeds up the transaction time and minimizes energy use as well as environmental problems by eliminating the problem-solving, competitive aspect in the verification of transactions in crypto platforms such as Bitcoin. Similar to Ethereum, Cardano also facilitates decentralized applications and smart contracts, powered by its native coin, ADA.
Solana was developed considering the needs of decentralized finance or DeFi, smart contracts, and decentralized apps or dApps. It runs on a distinct proof-of-history mechanism and hybrid proof-of-stake that allows it to securely and quickly execute transactions. SOL is the native coin that powers the whole platform.
Polkadot was launched in 2016 and can connect various chains. It can also process transactions and exchange data for parallel blockchains. Polkadot security allows developers to develop their blockchains.