You might think that Dogecoin and Shiba Inu would be sitting at the top of the cryptocurrency world will all the buzz they receive. But that's not the case-- at least not based on where investors are actually putting their money.
The most objective way to determine the top cryptocurrencies is to look at their market caps. For digital coins, market caps are calculated by multiplying the current price times the circulating supply. Here are the five most popular cryptocurrencies on the market right now, according to CoinMarketCap.
There's absolutely no surprise whatsoever that Bitcoin (BTC 0.04%) still reigns as the world's most popular cryptocurrency. Its market cap currently stands at nearly $1.1 trillion. If Bitcoin were a company, it would be bigger than Meta Platforms (formerly known as Facebook) and Tesla.
Bitcoin continues to enjoy the advantage of being the first cryptocurrency. It's more widely accepted than any other digital coin, mainly because it's been around longer. Bitcoin is even viewed by some investors as a good hedge against inflation since there will never be more than 21 million Bitcoin tokens in circulation.
Ethereum (ETH -0.24%) ranks as a somewhat distant No. 2 to Bitcoin on the list of the most popular cryptocurrencies. Its market cap is hovering around $500 billion, less than half the size of Bitcoin. But some believe that Ethereum will be the next Bitcoin.
The key edge for Ethereum is its real-world utility. Its blockchain supports smart contracts that can be used in a wide range of applications. In particular, Ethereum is well-suited for creating non-fungible tokens (NFTs). Whether or not the cryptocurrency knocks Bitcoin out of the top spot in the future, Ethereum appears to be in a good position to stand the test of time.
3. Binance Coin
Binance operates the biggest cryptocurrency exchange in the world. It makes sense, therefore, that Binance Coin (BNB 0.24%) is the third-most-popular digital coin on the market. It's the native coin on the Binance exchange and currently has a market cap of over $96 billion.
Investors who pay transaction fees with Binance Coin receive discounts. Each quarter, Binance reduces the supply of the digital coins based on trading volume. Over time, these quarterly coin "burns" will remove 100 million coins, which amounts to half of the total supply. These moves are intended to increase the value of Binance Coin.
Tether (USDT 0.01%) ranks as the No. 4 most popular cryptocurrency in the world. Its market cap is around $73 billion. But among stablecoins, Tether takes the top spot. All stablecoins tie their value to another asset. For Tether, that asset is the U.S. dollar.
In theory, Tether is like a "crypto-dollar" that should maintain its value in a similar way as physical U.S. dollars do. However, there has been some controversy over whether or not Tether has sufficient reserves to back all of its digital coins. The U.S. Treasury Department recently called on Congress to take action to address the risks that could be posed to the economy by stablecoins such as Tether.
Solana (SOL 0.36%) rounds out our list of the top five most popular cryptocurrencies. Its market cap currently stands near $65 billion. Solana has been the biggest winner of these top cryptocurrencies over the last year with a gain of well over 10,000%.
Many investors have flocked to Solana as an alternative to Ethereum. Both blockchains support smart contracts. However, Solana offers much faster processing speeds and lower transaction fees than Ethereum.