8 Alternatives to Bitcoin Which Crypto Will Be the Next Bitcoin?

Similarly, a crypto brokerage serves as an intermediary for buyers and sellers, but the broker sets the prices. Brokerages often support fewer cryptocurrencies yet charge lower fees than exchanges. Robinhood, for example, supports only seven cryptocurrencies — bitcoin, ethereum, dogecoin, litecoin, ethereum classic, bitcoin cash and bitcoin SV — but charges no transaction fees. A crypto exchange provides a platform for individual buyers and sellers to trade crypto — or exchange tokens and fiat currency, like US dollars. A crypto exchange is a platform that allows users to buy and sell digital assets and cryptocurrencies such as bitcoin and ether. Coinbase says it keeps 98% of its crypto assets in cold storage — a method for holding crypto tokens offline — and says that it has never lost any user funds.

Cash App charges a fee depending on price volatility and market trading volume, which it reveals at the time of purchase. Trading fees on these bitcoin exchange platforms are lower than those of Coinbase and other brokers, usually roughly 0.1%-0.5% per trade. But the experience of buying bitcoin may not be as easy for newcomers because these exchanges, which include loads of altcoins, are really set up as trading venues before anything else. Consequently, those unaccustomed to cryptocurrency exchange layouts may find them more challenging to navigate than other options. Choosing a cryptocurrency exchange is often the first step investors take when exploring the word of digital assets. While there are many ways to exchange cryptocurrencies for one another, centralized exchanges provide a relatively easy way to convert cash into coins and tokens.

Best Crypto Wallets of May 2023

Available on mobile and web, Cash App allows you to purchase up to $100,000 per week in bitcoin, as well as withdraw $2,000 every day and $5,000 each week. Bear in mind, all exchanges are susceptible to outages when volumes spike. Coinbase’s popularity has climbed to its highest point since 2017, and it’s now the ninth-most downloaded crypto chart patterns application on Apple’s (AAPL) U.S. app store as well. With a current price of $6.32 (as of April 2023), DOT is down over 88% from its all-time high. On the flip side, the coin is up 134.37% since it started in August of 2020. BNB is currently trading at $316.82 (as of April 2023), down over 53% from its all-time high.

The Hodl Hodl marketplace gives traders the option to support whichever payment method they want (Zelle, PayPal, bank wire, altcoins, SWIFT, credit cards and gift cards). Once payment for a trade is complete, either party signs their end of the multisig wallet to release funds. Binance is one of the largest cryptocurrency exchanges and the Binance Coin is the medium of exchange for the entire network. You can use your Binance Coin to trade and pay fees on the Binance cryptocurrency exchange. The SEC and crypto exchanges have clashed several times in recent years, with some exchanges facing investigations by the financial agency. The main sticking point is the SEC’s classification of virtual currencies.

What Is a Cryptocurrency Exchange?

While Bitcoin may have once been king, there are now plenty of other cryptocurrencies on the market if you want to start investing in the space. Just remember that any coin, no matter how much buzz it’s getting, is susceptible to market fluctuations — both good and bad. The Avalanche blockchain uses its own coin, AVAX, to cover transactions on the network. What makes Polkadot a good investment is that it’s different in the sense that the network can interact with other blockchains. However, Polkadot is similar to Bitcoin in the sense that it functions as both a token (DOT) and a decentralized exchange.

• Bitcoin has practically become synonymous with cryptocurrency, but it’s hardly the only coin option out there.
• The Avalanche blockchain uses its own coin, AVAX, to cover transactions on the network.
• U.S.-exclusive River Financial is a relatively new, bitcoin-only broker that focuses on bringing a full suite of bitcoin-related client services to their customers.
• River allows, for instance, Lightning Network deposits and withdrawals, which means you can deposit or take your bitcoin out of River instantly for zero (or near zero) network costs.

Though some stock brokers also offer crypto exchanges, crypto trading is not subject to the same investor protections you get when working with traditional investments. Securities Investor Protection Corp. insurance doesn’t apply to cryptocurrency, so if your exchange fails (as FTX did in the fall of 2022), you could lose your investment. For this reason, some users prefer not to store assets on exchanges unless they’re actively trading.

Our estimates are based on past market performance, and past performance is not a guarantee of future performance. Howell said she keeps 10% of her bitcoin pay for retirement savings and isn’t worried about the currency’s ups and downs. “I’m long-term cryptocurrency so I’m not watching the volatility on the day today,” she said. “I’m here for the next five years, the next decade, the next two decades.

If you’re new to cryptocurrency, or if you just need to convert fiat currency into crypto, you’ll likely be using a centralized exchange. PayPal allows purchases to be made with crypto where available, but you will need to pay taxes on the sale of Bitcoin on top of any taxes related to the purchase of the goods or service. Their purposes range from being a joke to a coin that pays for transactions on a distributed and global virtual machine. Where they will all end up is anyone’s guess, but the years that have passed since they first appeared seems to suggest they aren’t going anywhere soon.

PayPal allows users to purchase and sell Bitcoin, Ethereum, Litecoin and Bitcoin Cash. Fees include an estimated 0.5% spread (this may vary depending on market conditions) and a tiered transaction fee that amounts to $2.49 for $200 in Bitcoin. Several brokers offer cryptocurrency trading in addition to stocks, funds and other asset classes.

Despite price crashes in the first half of 2022, buying and selling cryptocurrency continues to steam forward. While governments have increased their efforts to regulate crypto markets, scans continue to plague crypto investors, and it’s more important than ever to find a trusted platform for buying and selling crypto. A number of cash and peer-to-peer payment apps now allow users to buy and sell Bitcoin. On balance, these apps are more limited in what they offer than the exchanges and brokers above. SoFi offers low fees and some 20 cryptocurrencies, but no crypto-to-crypto trades nor the ability to transfer crypto assets off their platform. The cryptocurrency running on the Solana blockchain is called Solana (SOL).

More crypto advice

At Robinhood and SoFi, for instance, you cannot transfer your crypto holdings out of your account. This may not seem like a huge deal, but advanced crypto investors prefer to hold their coins in crypto wallets for extra security. Some even choose hardware crypto wallets that are not connected to the internet for even more security. Some of the most well-known cryptocurrency exchanges are Coinbase, Gemini and Binance.US. While these companies’ standard trading interfaces may overwhelm beginners, particularly those without a background trading stocks, they also offer user-friendly easy purchase options. A cryptocurrency exchange is a platform where buyers and sellers meet to trade cryptocurrencies.

NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Our partners cannot pay us to guarantee favorable reviews of their products or services. In the meantime, financial advisors warn consumers and investors that cryptocurrencies do not provide the same protections that come with a traditional bank or brokerage account. Cash App also offers automatic recurring buys and has a debit card which gives holders bitcoin-back rewards. Purchasing fees vary from roughly 1%-3% depending on the order size (the larger the order, the cheaper the fee).

And storing crypto in an exchange’s wallet can leave you vulnerable to losses if an exchange fails or suffers a cyberattack. Webull charges no fees for cryptocurrency trades beyond a 1% spread for each trade, but has relatively fewer cryptocurrencies on offer. Polkadot (DOT) is a PoS cryptocurrency aimed at delivering interoperability among other blockchains. Its protocol is designed to connect permissioned and permissionless blockchains and oracles to allow systems to work together under one roof. Polkadot’s core component is its relay chain, which enables the interoperability of varying networks. It also provides for parachains—parallel blockchains with their own native tokens for specific-use cases.

SOL is down over 92% at $20.73 (as of April 2023) from the all-time high, but it’s up over 4,037% since it was formed in May 2020. The potential upside of investing in LTC is that the coin has been around since 2015 and is seen as stable. Ethereum is one of the safer options to invest in, ranked in the top 10 regarding price and stability. Even Bitcoin has dropped in value, from its peak at $69,044.77 to hovering around $28,000 (specifically $28,349.25 on March 31st, 2023).

Kraken Exchange told CoinDesk at the end of 2020 that it plans to integrate the Bitcoin Lightning Network for deposits and withdrawals this year. AVAX is worth $17.60 (as of April 2023) and is down nearly 88% from the all-time high. This is up almost 528% from the day it was formed on December 31, 2020.

What Are Cryptocurrencies?

Among those are services that pay rewards to people who lend out their crypto. Many crypto exchanges will hold your crypto for you if you don’t want to set up a wallet that you control by yourself. The goal behind Ethereum is to create a decentralized suite of financial products that anyone in the world can freely access, regardless of nationality, ethnicity, or faith. Centralized exchanges act as a third party overseeing transactions to give customers confidence that they are getting what they pay for.

Tether (USDT) was one of the first and most popular of a group of so-called stablecoins—cryptocurrencies that aim to peg their market value to a currency or other external reference point to reduce volatility. When you decide on which cryptocurrency to purchase, you can enter its ticker symbol—Bitcoin, for instance is BTC—and how many coins you’d like to purchase. With most exchanges and brokers, you can purchase fractional shares of cryptocurrency, allowing you to buy a sliver of high-priced tokens like Bitcoin or Ethereum that otherwise take thousands to own. Hodl Hodl is a global, peer-to-peer bitcoin exchange that uses multisignature wallets to escrow trades between users. Kraken is one of the oldest U.S.-based exchanges and offers both spot trading for bitcoin and altcoins as well as leveraged trading.

If you’re thinking about investing in crypto (or are already doing it), there are several others worth considering. Binance itself was hacked in 2019, with thieves getting away with 7,000 bitcoin worth about $40 million, though the exchange refunded users who lost money using its Secure Asset Fund for Users. Several investors who were locked out of trading in 2021 and suffered major losses are planning a class-action lawsuit against Binance. Featuring transactional support for more than 300 cryptocurrencies, Crypto.com offers the widest range of cryptocurrencies of any exchange on this list.

• The company plans on exploring an initial public offering when the lawsuit is settled at some point in 2023.
• BitFlyer’s instant buy and sell platform doesn’t charge any transaction fees at all, which makes it a tempting proposition, but watch out for the wild range of spread fees, from 0.1% to 6%.
• Founded in 2017, Solana is a blockchain platform designed to support decentralized applications (dApps).
• Depending on how you choose to pay, you may have to fund your account before purchasing any crypto.

Charles Hoskinson, one of the co-founders of Ethereum, founded Cardano with the intent of being energy-efficient and supporting fast transactions with minimal transaction fees. It’s intended to be the next generation of the Ethereum network with a flexible blockchain and scalable platform for running smart contracts. Ripple also offers fast settlement and low fees and is being used by large financial institutions (unlike other Bitcoin alternatives). You’ve probably heard plenty of buzz over the years about “meme coins” and random success stories of ordinary folks becoming millionaires through cryptocurrency investing, just by seeking out Bitcoin alternatives.

Solana had a market capitalization of $8.4 billion and was valued at around $21 on April 23, 2023, making it the ninth-largest cryptocurrency by market cap. There are also blockchain-based tokens that are meant to serve a different purpose from that of money. One example could be a token issued as part of an initial coin offering (ICO) that represents a stake in a blockchain or decentralized finance (DeFi) project. If the tokens are linked to the value of the company or project, they can be called security tokens (as in securities like stocks, not safety). While there are thousands of cryptocurrencies being traded around the world, you’ll find that the most popular options are widely available for purchase in fiat currencies such as the U.S. dollar.

You can use your own crypto wallet in many cases to store, trade and carry out transactions using cryptocurrency. Straightforward and simple, Coinbase provides an intuitive and streamlined experience that makes it easy to buy, sell, trade and send bitcoin, ether and a variety of other cryptocurrencies. As a public company, it’s among the most established, well-capitalized and popular players — but you’ll pay for the privilege, with trading fees that are higher and somewhat more complicated than other exchanges. We think the platform’s ease of use and simplicity are worth the higher fees, only if you plan to make infrequent and relatively modest transactions. CashApp, a peer-to-peer money transfer system run by Square, allows users to purchase and sell Bitcoin. Unlike other cash apps noted here, Cash App allows users to transfer their Bitcoin to their own cryptocurrency wallet.

Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. TradeStation Crypto charges 0.3% or lower on crypto trades, and unlike many other brokerages enables users to transfer crypto to a personal wallet. Binance Coin was initially an ERC-20 token that operated on the Ethereum blockchain. It eventually had its own mainnet launch, and uses a PoS consensus model. As of April 23, 2023, Binance Coin has a $51.5 billion market capitalization, with one BNB valued at around $330. Examples include Storj tokens, which allow people to share files across a decentralized network, or Namecoin, which provides a decentralized Domain Name System (DNS) service for internet addresses.

Polkadot aims to offer scalability improvements (the number of transactions per second a network can handle) and governance for protocol upgrades or changes. Ripple has been involved in a lawsuit for over a year with the SEC and the price has dropped significantly. Ripple argues it shouldn’t be treated as a security in order to avoid much stricter regulatory scrutiny. The company plans on exploring an initial public offering when the lawsuit is settled at some point in 2023. Many people like the idea of cryptocurrencies but fear their money isn’t safe in an unregulated, online world. Many cryptocurrencies have gained importance or hold the promise to do so.