*Why are there so many kinds of cryptocurrency?*
Have your ever wondered??đđ
Itâs important to remember that Bitcoin is different from cryptocurrency in general. While Bitcoin is the first and most valuable cryptocurrency, the market is large.
There are more than two million different cryptocurrencies in existence, according to CoinMarketCap.com, a market research website
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. And while some cryptocurrencies have total market valuations in the hundreds of billions of dollars, others are obscure and essentially worthless.
If youâre thinking about getting into cryptocurrency, it can be helpful to start with one that is commonly traded and relatively well-established in the market. These coins typically have the largest market capitalizations.
Thoughtfully selecting your cryptocurrency, however, is no guarantee of success in such a volatile space. Sometimes, an issue in the deeply interconnected crypto industry can spill out and have broad implications on asset values.
For instance, in November of 2022 the market took a major hit as the cryptocurrency exchange FTX struggled to deal with liquidity issues amid a spike in withdrawals.
As the fallout spread, cryptocurrencies both large and small saw their values plummet.
There are other ways to manage risk within your crypto portfolio, such as by diversifying the range of cryptocurrencies that you buy
