Article

An overview of major cryptocurrencies

29 May 2025
Ashley Oerth
Ashley Oerth
Associate Global Market Strategist
Drew Thronton
Drew Thornton
Head of Thought Leadership, Investment Solutions
Young woman using mobile phone against futuristic holographic background. New ways of investing - using mobile app to buy stock and cryptocurrency.
Key takeaways
1

Despite common misconceptions, cryptocurrencies represent a dynamic and expanding market. Bitcoin, for instance, gains substantial value from its widespread recognition and limited supply. 

2

Various cryptocurrencies have emerged over time. Some have attempted to address some of Bitcoin's limitations by either modifying the underlying technology or completely overhauling it. Others take on an entirely different value proposition.

3

The perception of cryptocurrencies as investment assets has undergone significant evolution. Once viewed as an uncorrelated asset, Bitcoin now trades more like a cyclical, risk-on asset.

Cryptocurrencies tend to divide the financial community sharply. Are Bitcoin and others in a bubble, due to deflate once investors realise some fundamental truth about cryptocurrencies? Or is the advent of the underlying blockchain technology the beginning of a new era in our financial system built on decentralised systems?

We view cryptocurrencies as a new type of asset that is purely digital, accompanied by a host of new jargon to describe their inner workings. As digital assets continue to grow, we believe they deserve review. 

The rise of cryptocurrencies and their evolution

Cryptocurrencies emerged during the 2008 Global Financial Crisis as an innovative alternative to traditional banking. This new form of digital asset was pioneered by Satoshi Nakamoto, who, in the seminal Bitcoin whitepaper, proposed a decentralised system that was free from the confines of banks and other financial institutions.

Since their inception, cryptocurrencies like Bitcoin have evolved from niche digital tokens and have become a significant part of the global economy. Following the financial crisis, Bitcoin remained on the fringes of the economy, with occasional news stories highlighting thefts and hacks of cryptocurrency exchanges. It was not until 2017 that we witnessed the first significant price increase, which led to a surge in interest in cryptocurrencies. A retail-driven bubble emerged in tandem with the introduction of Bitcoin futures by the Chicago Mercantile Exchange at the end of 2017, bringing cryptocurrencies into the mainstream investment world. After that bubble popped, cryptocurrencies were not back in vogue until 2020, when large-scale fiscal and monetary support helped spark a rally in many assets, including cryptocurrencies. Despite drastic fluctuations, the relevance of digital currencies continues to grow, underpinned by increasing interest from both retail and institutional investors.
 

The development of cryptocurrencies

Even before the cryptocurrency boom of 2017, digital currencies such as Litecoin (launched in 2011), Dogecoin (2013), Tether (2014), and Ethereum (2015), were advancing rapidly. These platforms either refined or revamped the underlying blockchain technology. As of today, the popular cryptocurrency tracker CoinMarketCap.com counts tens of thousands of cryptocurrencies in existence, and millions of other digital assets, reflecting the expansive growth and continual innovation in the sector.

Figure 1. Top cryptocurrency types by market capitalisation

* Market Share indicates the relative share of the market capitalization of the cryptocurrency universe, including both coins and tokens.
† As we discussed earlier in this piece, the claim that any cryptocurrency is a store of value is largely subjective.
Sources: CoinDesk, CoinGecko, CoinMarketCap.com and Invesco as of 20 March 2025.

Drivers of cryptocurrency growth

1. Technological advancements

Improvements in blockchain technology have enhanced the appeal of cryptocurrencies as a viable digital currency. Other cryptocurrencies derive their value from some other value proposition, such as deriving revenue from some kind of service provided through a blockchain.

2. Institutional adoption

As financial institutions create more crypto-focused products and integrate blockchain into their operations, rising investor confidence should help drive wider adoption.

3. Regulatory developments

Increasingly progressive regulatory frameworks in certain countries have provided a roadmap for businesses to engage with cryptocurrencies, positively influencing market stability and growth.

4. Market sentiment and speculation

Media coverage and public perception have a significant impact on the value of cryptocurrencies. Positive news flow can lead to rapid price increases, while negative news can lead to swift declines.

5. Decentralisation appeal

The decentralised nature of cryptocurrencies offers an alternative to traditional banking and financial systems.

Stores of Value

These cryptos seek to offer methods of storing value securely through a crypto, yet their values are quite volatile.  Top Contenders: 

  1. Bitcoin (39.61%)
  2. Litecoin (0.68%)

Software Platforms

Such “software” cryptos act like a decentralized computer, with programs stored on and executed via blockchains. Top Contenders:

  1. Ethereum (19.26%)
  2. Cardano (1.27%)
  3. Solana (0.67%)
Stablecoins Stablecoins sidestep the store of value debate by pegging their value to an underlying, such as the US dollar. Top Contenders:
  1. Tether (7.53%)
  2. USD Coin (5.00%)
  3. Binance USD (1.85%)
Payments-Focused These cryptos focus on scalability for the sake of rapid payments and are often run or created by a business. Top Contenders:
  1. BNB (5.12%)
  2. XRP (2.11%)
Memecoins Born out of their namesake, memecoins are perhaps the easiest to criticize for lacking a key value proposition. Top Contenders:
  1. Dogecoin (1.17%)
  2. Shiba Inu (0.57%)

Sources: CoinDesk, CoinGecko, CoinMarketCap.com and Invesco as of 20 March 2025.

In Exploring Cryptocurrencies, we delve into the complex world of cryptocurrencies to introduce and evaluate the space. We begin by contextualising Bitcoin’s rise from the Global Financial Crisis to the present, followed by an explainer on blockchain and its underlying technology. We then investigate some of the nuances of Bitcoin and the usual questions we see in this space—is it a currency? Is it digital gold?

We also consider the value proposition and valuation approaches for the cryptocurrency space, reviewing some of the largest cryptocurrencies and their underlying technologies. We also discuss how other assets can exist on a blockchain through tokenised assets. Tokenisation on the blockchain allows for the digital representation of various assets, from real estate to art, and carries both potential benefits and risks. We conclude with an assessment of the risks and potential long-term outcomes for cryptocurrencies.

How can investors gain exposure to digital assets and cryptocurrencies?

From an investment perspective, cryptocurrencies and blockchain technology are undergoing rapid change, unlocking new opportunities for investors. Methods of exposure to digital assets range from direct ownership of cryptoassets, to derivative products, to broader market approaches surrounding the crypto ecosystem.

Once viewed as an uncorrelated, fringe asset, Bitcoin is now seeing increased attention following the launch of US spot Bitcoin exchange-traded products (ETPs) . As the asset has grown in traded volume, its behaviour has evolved to be more like that of a cyclical, risk-on asset, which is influenced by broader economic cycles and investor sentiment.

Access digital assets with Invesco ETPs

We offer two efficient exchange-traded products for you to gain exposure to this transformative opportunity.

The Invesco CoinShares Global Blockchain UCITS ETF offers exposures to, and evolves with, the growth of global companies at the forefront of blockchain technology. It uses an expert analyst-driven approach to identify, select and weigh companies. Launched in March 2019, this ETF is the longest running ETF in Europe, giving meaningful exposure to the blockchain space.

Investment risks - click for more information. For complete information on risks, refer to the legal documents. Investment risks include:  Value fluctuation, Small companies, Securities lending, Equity, Currency.

An investment in this fund is an acquisition of units in a passively managed, index tracking fund rather than in the underlying assets owned by the fund.

Investors seeking more targeted exposure to Bitcoin, on the other hand, may want to consider our Invesco Physical Bitcoin ETP. This ETP is designed with an institutional-grade and proven ETP structure, is 100% backed by physical Bitcoin, and has one of the lowest fixed fees of any Bitcoin-tracking products in Europe.

Download PDF

Discover more from Invesco

Glossary of terms

Common terms used in the cryptocurrency world:

Cryptocurrency A non-traditional, digital medium of exchange that uses cryptography to validate and secure transactions, typically through a blockchain. Importantly, some cryptocurrencies vary on this definition.
Bitcoin The first and most popular cryptocurrency that is a reward for participating in the Bitcoin blockchain network. 
Altcoin Any cryptocurrency other than Bitcoin. 
Token A token is a crypto asset whose underlying value is based on another asset (e.g. gold or a title). This is different from a coin in that a coin’s value is not directly related to the value of an underlying asset. Unfortunately, “token” and “coin” are often used interchangeably, perhaps improperly.
Stablecoin A stablecoin is a cryptocurrency in which its market value is intended to be pegged to another asset, such as US dollars. 
Blockchain A digital ledger maintained by computers worldwide in a decentralized manner, where each “block” is a packet of data. 
Mining Users can participate in a blockchain network by verifying transactions and, in exchange, are rewarded with a particular cryptocurrency in a specified amount.
Wallet Wallets are where Bitcoin and other cryptocurrencies are, in essence, held for use. Note that wallets facilitate holding cryptocurrencies, whereas an address is specific to each blockchain and is used in transactions, serving as an identity.
Exchanges

Where cryptocurrencies can be transacted with other people or currencies for a fee. 

  • Decentralized Exchange – Users are matched with buyers/sellers algorithmically. Such exchanges tend to be less liquid compared to centralized exchanges but are generally more secure and involve lower fees. 
  • Centralized Exchange – Users create an account with an exchange which typically holds their cryptoassets. These are considered more liquid and regulated, but less secure as the exchange acts as your custodian and can be hacked.
Initial Coin Offering  An Initial Coin Offering (or ICO) is like an IPO but with digital coins. At the time that they became popular, they required no formal filings but served a similar purpose to equity securities. Today, they are almost non-existent. 
Decentralized Finance (DeFi) As with Web 3, definitions may vary. The general idea of DeFi is to change financial markets and products operated by transparent crypto-based protocols rather than by financial institutions.
Fiat currency Government-issued currency that is not backed by a physical commodity but by the trust that individuals have in the issuing country. 
Cold wallet/Cold storage A way of storing cryptocurrencies offline to protect them from hacking or other types of cyber theft. 
Satoshi The smallest unit of Bitcoin is named after the pseudonym of the inventor of Bitcoin. 
Tokenisation The process of converting real-life assets like art or real estate into digital tokens on a blockchain makes them easier to trade online. 

  • Investment risks

    For complete information on risks, refer to the legal documents. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Invesco CoinShares Global Blockchain UCITS ETF:  As this Fund invests primarily in small-sized companies, investors should be prepared to accept a higher degree of risk than for an ETF with a broader investment mandate. The Fund may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults. The value of equities and equity-related securities can be affected by a number of factors including the activities and results of the issuer and general and regional economic and market conditions. This may result in fluctuations in the value of the Fund. The Fund’s performance may be adversely affected by variations in the exchange rates between the base currency of the Fund and the currencies to which the Fund is exposed.

    Invesco Physical Bitcoin ETP: Investing in cryptocurrencies is high risk. You should only invest in this product if you understand the risks associated with it. Any decision to invest should be based on the information contained in the relevant prospectus. Prospective investors should consult their professional advisers to ascertain the suitability of this product as an investment to their own circumstances.

    Investment Risk:
    The value of the product depends on the performance of the underlying investment. Cryptocurrencies do not have any intrinsic value and may become worthless.

    Volatility Risk:
    Cryptocurrencies are subject to extreme price volatility as evidenced by the large daily movements in the price of Bitcoin since its inception. Cryptocurrency markets do not close and so sudden price swings could occur at any time.

    Risk of Hacking:
    A hack of a depositary wallet could result in the loss of the main body of the underlying crypto assets backing one or more series of certificates. Such a hack could result in a loss of value of the certificates for all the certificate holders of the affected series. Certificate holders of the affected series would risk losing their entire investment.

    Liquidity Risk:
    The product may be adversely affected by a decrease in market liquidity which may impair the ability to exchange cryptocurrencies into fiat currencies.

    Regulation Risk in the Market of Cryptocurrencies:
    The price of cryptocurrency can be affected by factors such as global or regional political conditions and regulatory or judicial events.

    Important information

    Unless otherwise stated, all data as at 7 March 2025.

    This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    For information on our funds and the relevant risks, refer to the Key Information Documents/Key Investor Information Documents (local languages) and Prospectus (English, French, German), and the financial reports, available from www.invesco.eu. A summary of investor rights is available in English from www.invescomanagementcompany.ie. The management company may terminate marketing arrangements.

    UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them. For the full objectives and investment policy please consult the current prospectus.

    Belgium: This product is offered in Belgium under the Public Offer Exemption. This material is intended only for professional investors and may not be used for any other purpose nor passed on to any other investor in Belgium.

    Views and opinions are based on current market conditions and are subject to change.

    All investment decisions must be based only on the most up to date legal offering documents. The legal offering documents (Key Information Document (KID), Base Prospectus and financial statements) are available free of charge at our website www.invesco.eu and from the issuers.

    The fund is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trade mark or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG.

    CoinShares and the CoinShares Astronaut are trademarks and/or service marks of CoinShares (Holdings) Limited and are licensed for use by Invesco. The CoinShares Group owns the proprietary rights in the CoinShares Hourly Reference Rates. The Product(s) are not sponsored, endorsed, sold, promoted or managed by CoinShares or its affiliated entities. The index is calculated by Compass Financial Technologies. Compass Financial Technologies uses its best efforts to ensure that the index is calculated correctly. Notwithstanding its obligations towards CoinShares, Compass Financial Technologies SA has no obligation to point out errors in the index to third parties including without limitation to investors and/or financial intermediaries. The calculation, the publication and the dissemination of the index by Compass Financial Technologies SA does not constitute a recommendation by Compass Financial Technologies SA to invest capital in the securities nor does it in any way represent an assurance or opinion of Compass Financial Technologies SA with regard to any investment therein. Purchasers of the CoinShares are made aware, and accept, that index calculations are based on large quantities of data provided by third parties and are thus susceptible to errors, interruptions and delays.

    Issued by: Invesco Investment Management Limited, Ground Floor, 2 Cumberland Place, Fenian Street, Dublin 2, Ireland. Regulated by the Central Bank in Ireland; Invesco Management S.A., President Building, 37A Avenue JF Kennedy, L-1855 Luxembourg, regulated by the Commission de Surveillance du Secteur Financier, Luxembourg and Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority.

    EMEA4367118