Which cryptocurrencies are worth investing in now?

Bitcoin, the original example of digital money, hit a record high of $99,830 (£79,541) per coin earlier this month, and may have further to climb.

Cryptocurrencies are booming once again. Bitcoin, the original example of digital money, hit a record high of $99,830 (£79,541) per coin earlier this month, and may have further to climb.

It is no wonder, when President-elect Donald Trump has previously pledged to turn the US into ‘the world capital of Bitcoin’.

It’s just two and a half years since cryptocurrencies faced such a plunge in value that many thought they would all but sink into oblivion.

In May 2022, holders lost around £300 billion of value in under a month and by the end of that year bitcoin was worth under $17,000.

Now its value has soared by over 150 per cent in just 12 months and many financial experts predict it could break through the $100,000 barrier this year. Other cryptocurrencies have seen similar resurgences.

So is it now a viable investment – or as volatile and dangerous as it ever was? And for those wishing to take a punt, where are experts spying opportunities – and which options are duds? Should you get stuck in?

Before you take the plunge into the world of cryptocurrencies, remember they are not an investment.

They are largely unregulated, very volatile and high risk – and if you lose money, you have no protection under the Financial Services Compensation Scheme safety net.

Scammers also take advantage of the lack of understanding and regulation of cryptocurrencies to steal savers’ cash.

Bitcoin, Ethereum and Dogecoin

Matthew Long, director of payments and digital assets at the Financial Conduct Authority (FCA), says: ‘We continue to warn people about scams and inform them of the risks associated with crypto. If you buy crypto, be prepared to lose all your money.’

That said, cryptocurrency ownership is on the rise, with 12 per cent of UK adults now owning some, figures from the FCA reveal.

Clearly it is capturing people’s curiosity. So, if you have money that you are willing to take a punt with, and feel confident you know how to buy cryptocurrency safely, where are experts suggesting you should look for opportunities?

1. Bitcoin

Bitcoin is the biggest, best-known and most established cryptocurrency. It is the closest to gaining acceptance by the investment establishment. Traditional fund managers at investment houses – such as Ruffer, Schroders and Jupiter – have bought it in the past though never more than a small fraction of portfolios.

This growing acceptance, combined with Trump’s return, has many thinking that another run higher is possible.

IG Markets analyst Tony Sycamore says: ‘Bitcoin’s recent rally fell short of the $100,000 mark, leading to a pullback. This retracement is seen as a natural correction, with expectations of a retest of the $100,000 level in the coming weeks. The presence of a pro-crypto President in the White House bolsters long term optimism for Bitcoin.’

2. Uniswap

Founded in 2018 by a former Siemens engineer, this is a cryptocurrency exchange that is owned by its users. Those who own its namesake digital coins have the right to vote on changes to how it operates.

It is currently valued at $12.99 a token and has doubled over the past 12 months.

Glen Goodman, author of bestseller The Crypto Trader and former ITV News business correspondent, says the fact that Uniswap is owned by its users rather than a big corporation may appeal to crypto enthusiasts who believe it is set to disrupt traditional finance.

‘This project revolutionised crypto trading and showed the world what the future of finance might look like,’ he says.

‘It’s a decentralised marketplace for buying and selling cryptos. The big stock exchanges are run by large corporations, but Uniswap is governed by a community of its users.’

3. Ethereum

The second most popular cryptocurrency is worth an impressive $434.5 billion, but this is still 78 per cent smaller than the market for Bitcoin.

Although network and technological improvements may help demand for Ethereum, Danny Scott, author of Bitcoin: Explained Like I’m 5 and chief executive of the Coincorner crypto dealer, said that sentiment towards Bitcoin will ultimately determine its future performance.

‘As the famous saying goes, “a rising tide lifts all boats”,’ he remarks.

4. Cardano

This coin was founded in 2017 and its co-creator Charles Hoskinson helped create Ethereum.

Like Bitcoin, it is viewed as a ‘Trump trade’, having seen its value skyrocket since the US election.

Goodman says: ‘This blockchain platform has struggled to gain popularity over the years, but now the founder claims he hopes to be advising the Trump administration. Cardano’s price has been rocketing in anticipation of Hoskinson getting a role close to the president.’