Bitcoin Gains 24% Over a Strong Holiday Weekend
After a dismal and volatile week leading up to Christmas weekend, bitcoin and other leading cryptocurrencies have rebounded strongly. Since Friday, bitcoin has vaulted nearly 25%, and the rest of the "big five" digital currencies have also experienced strong gains.
Today's cryptocurrency prices
Here's a look at the five largest cryptocurrencies by market capitalization and how much each has changed over the past 24 hours, as well as over the long holiday weekend.
Bitcoin has recovered by more than 50% from its $10,400 low hit during extremely volatile Friday trading.
Why are there so many cryptocurrencies?
A common question people who aren't too familiar with cryptocurrencies is "why are there so many?" In other words, why isn't bitcoin enough? If bitcoin is so popular and has so many advantages, why do we need Ethereum, Ripple, and others? And this question certainly makes sense -- in fact, there are 1,366 different cryptocurrencies currently tracked by investing.com.
While many of these are small, there's a good reason why several have emerged as major players in the cryptocurrency market alongside bitcoin. In fact, Ethereum has a massive $74.7 billion market cap, and bitcoin cash, ripple, and litecoin, which make up the rest of the top five, combine for more than $100 billion in market value.
The short answer is that while bitcoin does have several key advantages over traditional means of payment processing, it does have some big flaws and limitations, while the major alternative digital currencies solve (or improve on) some of these problems. Here's a rundown of the rest of the "big five":
- While bitcoin was developed as an alternative form of money, Ethereum was created to facilitate peer-to-peer contracts and distributed applications. Of course, this is a simplification, but Ethereum is effectively an advanced version of the blockchain technology with a different purpose.
- Bitcoin cash was spun off from bitcoin earlier in 2017, in response to the growing problem of slow transaction times on the bitcoin network. In a nutshell, bitcoin cash has a larger "block size" than bitcoin, which allows it to process more transactions, which speeds up transaction times and helps keep fees in check.
- Ripple is designed to be a real-time currency settlement system and network. It is designed to connect banks, payment providers, and other entities, and has established partnerships with several big financial companies, such as American Express.
- Litecoin is a close cousin of bitcoin, but one big difference is that litecoin's block generation time is one-fourth that of bitcoin, which helps speed up the transaction times. It also has significantly lower fees, which could make litecoin more practical as a means of payment for smaller transactions.
Bitcoin is overhyped: 10 better buys for you nowWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and investing directly in Bitcoin was noticeably absent from their recommendations! That's right -- they think these 10 stocks are better buys.
{% render_component 'sa-returns-as-of' type='rg'%}
The Motley Fool has a disclosure policy.