When investing in cryptocurrency, you want to account for every factor. Scarcity is one of those principal factors.
If you have collected anything, from coins to Star Wars action figures to comic books, you know that rare items fetch the highest price. Conversely, mass-produced items retain little value.
In the crypto world, a limited or capped supply puts a hard limit on the number of coins that can be mined. It is a mechanism that theoretically should create scarcity and keep prices up.
Let’s get on the same page about a limited supply before we get into what tokens with a capped supply you should watch.
A capped supply is precisely what it sounds like: a maximum number of coins can be issued for a specific cryptocurrency. When a crypto hits its maximum supply, there will be no more mining of that coin.
The appeal of a limited supply is its rarity, helping to drive up the value. The theory is that if a limited supply is met with high demand, the price drives upward—an effective way to profit from the future value.
The opposite is an uncapped crypto with no maximum supply. This non-existent market cap allows for billions of coins to be mined and brought into circulation.
However, an unlimited supply doesn’t mean the coin doesn’t hold value. Take Ethereum as an example. It has no fixed supply and is the second-largest cryptocurrency by market cap.
Top crypto coins with a capped supply in 2022
When we make crypto assets available for trading on the Bitbuy platform, we value currencies with significant supply, demand and liquidity. These cryptocurrencies met those criteria and are some top crypto coins to watch as we move further into 2022.
We have to start with the most popular cryptocurrency. If you know Bitcoin, you know that one of the primary characteristics is its limited coin supply. That’s because Bitcoin was designed to mirror the finite supply of physical gold.
The maximum number of bitcoins is 21 million. The number of bitcoins minted per block is reduced by 50% about every four years to limit the supply. Based on current projections, the last bitcoin will be minted in 2140.
As of late March 2022, there were 18,989,225.00 BTC issued. Since the new year, it has been hovering around the $40,000 market. Some experts predict that it could rise to $100k by the end of 2022.
Bitcoin has established itself as a meaningful store of value, making it an appealing option for individual and institutional investors.
Litecoin is the “digital silver” to Bitcoin’s “digital gold.” It promises an alternative mining algorithm and faster mining settlement than its more conservative Bitcoin counterpart. Still, it is so much more than that.
Litecoin handles transactions at lightning speed, making it a popular choice as a means of transaction on a decentralized, peer-to-peer network.
Modelled after Bitcoin, Litecoin’s performance correlates with Bitcoin’s, just not to the same heights. As of late March 2022, Litecoin had a market capitalization of approximately $8.4 billion and a per token value of $12107.32, making it the 20th most popular crypto globally.
While it may see the same growth as Bitcoin, Litecoin certainly holds its ground as a strong competitor that consistently pushes the boundaries of innovation.
If you are looking for a more affordable alternative to Ethereum, Cardano is a popular choice.
Launched in 2017, Cardano aimed to compete with Bitcoin and Ethereum for financial transactions and distributed computing, providing more efficient, scalable, and secure applications on a decentralized platform.
As one of the top 10 most popular cryptocurrencies, Cardano has a vast following and a growing network. It has made waves for its early embrace of proof-of-stake validation. This method allows for quicker transaction time while decreasing energy usage.
It is a greener alternative to other cryptocurrencies because it removes the problem-solving aspect of transaction verification in platforms like Bitcoin.
If technological utility is part of your crypto interest. Stellar is an attractive investment. The network’s native crypto, XLM, helps develop economies participate in cross-border transactions by allowing payments to be sent globally with low fees, regardless of the fiat currency.
Whereas crypto assets like bitcoin are meant to allow purchasers to create, purchase, and trade only BTC, holders of XLM may trade digital representations of all forms of fiat money in a decentralized manner.
So if you are in Canada and want to send money to a relative in England, XLM makes it easy. Steller’s blockchain-based network converts your Canadian dollars into XLM and sends them to your family member in British pounds—all in about 4 seconds.
Avalanche is a smart contract-driven network and allows decentralized applications to build on its blockchain platform. The native token on the platform is AVAX, with a max supply of 720 million coins.
If you are looking for competitors to Ethereum, Avalanche is a solid alternative. It has seen substantial growth since its inception in 2022. Those gains are attributed to its low gas fees and fast transaction processing speeds.
Developers like Avalanche because they can avoid the higher fees, congestion, and procession lags of blockchains like Ethereum.
Cryptocurrencies are highly volatile, making them risky investments. Though the above coins will only ever have a limited supply, there are still risks associated with investing in cryptocurrencies. Be sure never to invest more than you are willing to lose.