The 6 most expensive cryptocurrencies in the world
By Alex Panasenko 1335 5 Aug 2022
Bitcoin has been the king of the cryptocurrency industry for many years. This goes for the technology, the background, and the achievements. BTC is also considered the most expensive crypto. And what about the closest competitors?
It may be a surprise for some people to see the existence of a coin that was worth more than bitcoin at its peak: the DeFi token YFI yielded $82,475 in May 2021 (compared to a maximum of $68,789 for BTC).
Moreover, a “wrapped” version of bitcoin itself (WBTC) is sometimes priced higher than the basic asset (for example, on August 1, 2022, WBTC was $250 ahead of BTC).
So, what are all these monsters? And what other projects are in the unofficial top 6 in terms of the market value of their tokens? Let’s take a closer look at the five main bitcoin chasers for the world’s most expensive cryptocurrency title.
WBTC (Wrapped Bitcoin)
Modified “wrapped” tokens are created as bridges between different blockchains. WBTC, being a synthetic version of bitcoin, was invented to enable interaction with the decentralized Ethereum ecosystem without directly exchanging BTC for ETH. A “copy” of the bitcoin on the Ethereum blockchain is pledged against the real bitcoin to make this scheme work.
WBTC emerges from locking up the users’ BTC tokens in a special smart contract, which then sends the appropriate amount of WBTC to a specified Ethereum address. When the mission of receiving WBTC seems fully accomplished, the owners can get their bitcoins back. For this purpose, the smart contract “burns” the issued WBTCs and sends the unlocked BTCs to the original bitcoin address.
WBTC has existed since early 2019, being four years “younger” than ETH. The issuer is Wrapped Tokens. Given that the bitcoin network does not use a burning mechanism, there are almost 100 times fewer WBTC tokens (236,810 WBTC compared to 19 million BTC).
YFI is a rather unique token of the rather unique Yearn Finance crypto lending platform. As we mentioned before, YFI outperformed bitcoin in terms of market value.
This is mainly because YFI is one of the “rarest” cryptocurrencies: its issue is limited to only 36,666 coins (700 times less than the number of bitcoins), and all of them are already circulating in the market. The physical scarcity of YFI contributes to its high cost.
The second important factor influencing YFI’s price directly correlates with the volume of cryptocurrency assets locked on the platform. But while scarcity only raises the price, TVL can lower it (e.g., in a bear market when both user activity and the value of the locked liquidity fall).
At Yearn Finance, users can deposit their stablecoins as collateral for YFI tokens, and the platform will automatically select the most profitable decentralized protocol for them at that moment.
The project is highly successful, given that it wasn't launched until early 2020. One of its authors is a legendary personality, Andre Cronje, considered one of the most influential people in the decentralized finance industry.
PAXG (PAX Gold)
An unusual cryptocurrency that is fully backed by physical gold. The actual market value of this coin can always be very easily known and verified: PAXG is always worth as much as the exchange gives for one troy ounce of gold.
The issuer of the token, Paxos Trust, guarantees to provide PAXG with 12-kilogram gold bullion (400 ounces) stored in the vaults of the Brink’s company, which specializes in security solutions.
Why invest in PAXG when you can just buy real gold? Because it’s more convenient, tokenized gold is easier to hold and transfer. Liquidity, pricing, and trust in the counterparty will be much more transparent when using blockchain technology. Paxos Trust also does not charge its users for storing gold.
Due to the ERC20 standard, the PAXG token is available for seamless transactions within the Ethereum network. The project is also regularly audited to ensure it is fully provisioned with the gold available on its balance. Only in the event of a depreciation of the precious metal, or force majeure, can the price of PAXG drop significantly.
What a surprise, right? The second most capitalized cryptocurrency, with a rather significant (as for a non-shitcoin) issue (121.8 million tokens), confidently holds itself in the top five of the most expensive digital coins.
What more can be said about Ethereum? Vitalik Buterin, the smart contract platform, the burning mechanism. You don’t want us to repeat this encyclopedic information, do you?
The major upcoming event for ETH is definitely Merge. This is the process of the blockchain switching its consensus algorithm from PoW (Proof-of-Work) to PoS (Proof-of-Stake), which could happen as early as the second half of September 2022. This would be a significant step toward creating a “world supercomputer” and reducing the carbon footprint that the government and environmentalists call for.
The transition date could be more precise if the developers were 100% sure of a successful Merge for test networks. Ethereum has several of them. However, there is little doubt of success, and the token itself, as a result, could become a deflationary asset (that is, the rate of its scarcity build-up will be higher than its rate of inflation). Investors expect a price rally in this regard.
Another coin with a limited (according to the standards of the cryptocurrency world) circulation: there will never be more than 1 million (with a tail) pieces. MKR is the governance token of the decentralized MakerDAO platform.
The platform itself is the issuer of the popular stablecoin DAI, which is pegged to the U.S. dollar. All MakerDAO decisions are made collectively, and the voting is carried out by locking MKR tokens. The Board of holders each week agrees on all the issues they will need to vote on.
Even community members who don’t have MKRs can bring in ideas. But they won’t be able to vote because they don’t have anything. If you want to vote, buy an MKR.
Because of this policy, there is a belief that MKR has the characteristics of a security (and this is now a central topic of investigation by the SEC, which has tentatively classified all cryptocurrencies, except bitcoin, as securities).
MKR holders can completely lock the system in case of hacking or upgrades by voting. MKR is also used by the platform as a potential recapitalization resource in the event of threats to lose its peg to DAI stablecoin.