I’ve believed that tokenization will change the world since I discovered Ethereum way back in 2015. Using Bitcoin for the first time was definitely a lightbulb moment for me. However, I only started to grasp the potential of tokens when I considered the possibilities that would come from running decentralised applications on a blockchain network.
How Bitcoin and Ethereum lead the market 🚀
Of course, it turned out that Bitcoin and Ethereum both changed the world. Today, the token ecosystem looks completely different. We have thousands of tokens catering to different use cases, with many more set to emerge in the future.
When I look at how fast the ecosystem has evolved, it’s impossible not to get excited about the future. However, it’s important to set realistic expectations.
While there are many promising tokens in the market today, there’s a good reason that Bitcoin and Ethereum have always been the world’s top two crypto tokens (they collectively make up about 60% of the global cryptocurrency market capitalisation).
Unlike most other crypto assets, Bitcoin and Ethereum have established their clear niches within the market. Bitcoin is widely seen as a digital gold equivalent today, while Ethereum offers digital settlement for the decentralised Internet of the future. While the two networks greatly differ, they share similarities in that they both had a first-mover advantage in the market. Bitcoin kickstarted the token revolution, and Ethereum expanded upon the idea of digital currency. As a result, they’ve benefited from Lindy effect. In other words, they’re more time-tested than other crypto tokens.
Investing in market leaders 💪
When it comes to investing in tokens, new adopters often set their sights on finding the next Bitcoin and Ethereum. But I think this is the wrong approach for most people; while diversification can offer investors exposure to a wider variety of assets, it increases risk—and potentially dilutes returns. The outperformers in bull market cycles often vanish during downturns. But you can be relatively certain that Bitcoin and Ethereum will always be here as long as tokenization grows.
We’ve thought about this a lot in regard to token.com. It’s why we curated a Collection called The Crypto Giants, which celebrates Bitcoin, Ethereum, and other staples that we think have a bright future ahead. Whenever my friends ask me where to invest, I usually point them to Bitcoin and Ethereum first—so it made me pleased to see that they were the two most popular tokens in our app when we went live.
Now don’t get me wrong: there are definitely great returns to be made from investing in tokens with lower market capitalisations early on, and there’s every chance that another game changer like Bitcoin or Ethereum will emerge in the next decade. But for now, the market has decided on the top two crypto tokens. For anyone experiencing the wonders of tokenization for the first time, it makes sense to look at them first.
Mel Gelderman, CEO of token.com
Read more via CoinTelegraph here.
Please note: Investing in cryptoassets is risky. Due to the volatile nature of the cryptocurrency market, investors run the risk of losing their funds when they make an investment. Returns from cryptoasset investing are not guaranteed, therefore users should always be aware of the risks.
