Cryptocurrency is simply digital money. It isn’t managed by a central system such as the government. Instead of that, this digital money is based on blockchain technology. Bitcoin is the most popular cryptocurrency among all cryptocurrencies. More and more options became available as digital money continues to gain traction on Wall Street. There are currently more than 5,000 cryptocurrencies available on the market. So here are the best cryptocurrencies to invest in in 2021.
Although you can use cryptocurrency to make purchases, most people treat it as a long-term investment. Investing in cryptocurrency is one of the most profitable investing methods. But, it can be risky if you don’t know where to begin. So, What are the best cryptocurrencies to invest in?
Also read: What is Web 3.0?
How do we find the best cryptocurrencies to invest in?
If you run a quick web search you’ll get dozens of recommendations on how to invest in cryptocurrency. But we need to consider the following facts to find out the best crypto choice.
Longevity
The first question that we should ask is how long has cryptocurrency been around? Brand new cryptocurrencies aren’t immediately successful. But if we have historical data for comparison, that helps you to see how a company has performed since the beginning.
Track Record
How has the company performed since the beginning? A good sign if you see stability in prices. If you see that the cryptocurrency is becoming more valuable with time and gets more traction with time, that’s even better.
Importance – Past performance is not an indication of future performance. Things can be changed at any time. And investment can perform better or worse than it has performed in the past.
Technology
How does the cryptocurrency compare to other cryptocurrencies in usability and security? The network should be able to handle the transactions easily. So the first thing you should look at is the speed of the transactions.
And you should also consider the security. You want to make sure that your investments are secure. Most cryptocurrencies use blockchain technology. That makes all transactions transparent and easy to track. It doesn’t mean that it is harder for hackers to steal your cryptocurrency. But it is easier to track your crypto and can be recovered instead of losing all your money.
Adoption Rate
How many people are investing in that cryptocurrency? You should consider this fact. It means the cryptocurrency has better liquidity if you see a high level of adoption. And it’ll be easier for you to trade, sell and spend that cryptocurrency in the future.
So what are the top 10 best cryptocurrencies to invest in 2021
So, as of April 21, 2021, Bitcoin’s price is $55,362, and the market capitalization is $1.036 trillion. Ethereum’s price is $2,414 and the market cap is 279.266 billion. Binance coin price is $576.08 and the market cap is 87.95 billion. Tether’s price is $1 and the market cap is 49.059 billion. Cardano’s price is $1.25 and the market cap is $39.912 billion. Polkadot’s price is $35.54 and the market cap is $33.146 billion. Ripple is $1.35 and the market cap is $61,874 billion. Litecoin’s price is $267.11 and the market capitalization is $17.888 billion. Chainlink’s price is $37.71 and the market cap is $15.845 billion.
Here are the top best cryptocurrencies to invest in in 2021.
1. Bitcoin (BTC)
Bitcoin is the oldest cryptocurrency of all. So you can easily see why it is the leader. Considering the price, market cap, and volume it is much higher than any other investment option. Bitcoin still represents a 40% market cap even with thousands of other cryptocurrencies on the market.
A lot of businesses already accept Bitcoin as a payment method. That makes this cryptocurrency a smart investment option. Recently Tesla CEO Elon Musk inverted 1.5 billion via transactions with Bitcoin. Also, larger banks are beginning to incorporate Bitcoin transactions.
Risks of investing in Bitcoin
The value of Bitcoin tends to fluctuate a lot. You may see that the price goes up and down from thousands of dollars during a single month. If high fluctuation like this makes you nervous, it will be a good idea not to invest in Bitcoin. Other than that, you should remember that cryptocurrency is a smart long-term investment. So fluctuations shouldn’t be a problem for long-term investments.
Another reason for investing in Bitcoin is the price. A single share costs more than $50,000. Most people can’t offer to buy whole shares of the stock. So for investors who want to void buying partial shares, this is negative.
2. Ethereum (ETH)
Ethereum is different from Bitcoin. It is not only a cryptocurrency it is a network. That network allows developers to create their cryptocurrency utilizing the Ethereum network. Considering the value, even though it is far behind Bitcoin, it is far ahead of the other competitors. Ethereum came out years after some other cryptocurrencies. But because of its unique value, Ethereum manages to far exceed its place in the market.
Risk of investing in Ethereum
Ethereum also utilizes Blockchain technology. But it has only one “lane” for conducting transactions. This means when the network is overloaded it can lead to transactions taking longer to process.
More than $60 million Ether dollars was lost due to a hack in 2016 because of a flaw in the Ethereum wallet. Loopholes are always a risk in any cryptocurrency investment even the company has made strides in increasing its security.
3. Binance Coin
Binance coin became popular and reached its peak after 2017. During 2017, there was a bull market and the price of all cryptocurrencies rose. So most cryptocurrencies reach a peak before plateauing and decreasing in value.
But unlike other cryptocurrencies, Binance coin manages to continue its slow but consistent uptrend after 2017. Binance coin has proven to be one of the more stable investment options with fewer risks because of this performance.
Risks of Investing in Binance Coin
Binance Coin was created by a company instead of a group of tech developers. That’s what makes Binance Coins stand out from its competitors. But some investors remain leery of this cryptocurrency and its potential security issues although its commitment to maintaining a strong blockchain has won over many skeptics.
4. Tether (USDT)
This is the most stable of all cryptocurrencies because Tether is tied to the U.S. dollar. There is one dollar in the Federal Reserve Bank for each unit of Tether. So Tether is great for investors who want to transact with their cryptocurrency.
Risks of Investing in Tether
There are doubts about if there is truly a dollar in the reserve bank for each Tether unit. So that raised a question among investors about the actual reserve stock. So the value of Tether stock could drop rapidly if that ever disproven about the reserve stock.
5. Cardano
Cardano is appealing to investors for several reasons because the Cardano network has a smaller footprint. Then with the larger networks like Bitcoin, it takes less energy to complete a transaction with Cardano. So that means transactions are cheaper and faster.
This cryptocurrency is consistently improving its development to stay ahead of hackers. So it claims to be more adaptable and more secure.
Risks of Investing in Cardano
Cardano may not be able to compete with larger cryptocurrencies even though they have a better network. Because fewer adopters mean fewer developers. Most investors seek a high adoption rate this isn’t appealing to them. Even though this platform has big plans, there are doubts about whether it can live up to that potential.
Advice for Crypto Investors
Don’t be discouraged by fluctuations in the market. Your investment may lose money one day and make a profit the next. Instead of getting caught up in the day-to-day changes, look at the big picture.
6. Polkadot (DOT)
This cryptocurrency was created by some Ethereum leaders who broke away to form their cryptocurrency with a better network. Polkadot has several “Lane” to complete transactions instead of having a single one.
This cryptocurrency was designed to reward genuine investors and opt-out people who are just trading on the stock market to make money fast. Investors of this company also can make decisions on things such as Network fees, Network upgrades, and establishing or removing parachains
Risks of Investing in Polkadot
In 2016, Giving wood, the Founder of Polkadot introduced this cryptocurrency via a whitepaper. Polkadot came to the stock market and began trading at the end of 2020. Polkadot is a riskier investment for potential buyers. Because it has no track record for comparison.
7. Ripple (XRP)
Ripple is different from other cryptocurrencies because it offers international transactions. It is the company that unveiled the XRP token and is enticing to investors. It can take up to 10 business days for an international money transfer with a bank. But the same transactions take seconds with Ripple.
Other than that, Ripple has contracts with big banks around the world. So when more and more contracts with banks it has, the more accessible the Ripple crypto to its investors.
Risk of Investing in Ripple
Ripple showed impressive numbers when in 2017 its value jumped 36,000%. But the value only increases up to $2.40 stock value. So it is less impressive. If you are researching cryptocurrencies you shouldn’t be distracted by the high percentages. You should get down to the real numbers and see the real growth of the cryptocurrency.
8. Litecoin
Litecoin was originally established in 2011. It hits the market at the same time as Bitcoin. But Litecoin didn’t take off in the same way as Bitcoin. It boasted completing transactions 4 times faster than Bitcoin.
Litecoin was the first cryptocurrency to complete a lightning network transaction in 2017. It was completed in less than one second. Litecoin’s value could increase dramatically if the company expands its use of a lighting network for faster transactions.
Risks of Investing in Litecoin
Litecoin and other cryptocurrencies are tied closely to Bitcoin. So the value can fluctuate along with Bitcoin. Even though it is at a lesser rate, the value will go up and down just as Bitcoin does. If you found negative volatility in Bitcoin, investing in Litecoin is not a good idea.
9. Chainlink
Because of the appealing price Chainlink is unique as a cryptocurrency. Chainlink shares are affordable to buy. But they can’t be considered as penny stocks because the price is high enough not to be considered as penny stocks. For investors, this is very appealing because it has proven it can increase and there is still a lot of room for growth.
Chainlink is also available for trading on Coinbase. Coinbase is one of the world’s largest cryptocurrency apps. So like that being more accessible also makes Chainlink appealing to adopters.
Risks of Investing in Chainlink
Even though is it above thousands of other cryptocurrencies, it has a lower volume and market cap than most other appealing cryptocurrencies. That’s why it is ranked low on this list.
10. Stellar (XLM)
Stellar’s Lumens was established to serve a niche need within the world of cryptocurrency. It is also known as XLM. it is serving as a bridge between banks and blockchain networks. So it is essentially the PayPal of cryptocurrency networks.
Stellar can convert any currency and trade it across channels as a decentralized network. These transactions are made cheaper and faster by stellar than they would be with a traditional bank.
Risk of Investing in Stellar (XLM)
It will likely see other companies try to compete against Stellar because it caters to a niche market. If another company somehow manages to create another cryptocurrency network that performs better and manages to take traffic from Stellar, it can affect the stock value of the company.
Advice for crypto investors
Don’t settle on any number of cryptocurrency investments without continuing to learn about the market. A new cryptocurrency network could easily climb the ranks and emerge as a leader above other platforms. As an investor, the smartest thing you can do is to stay abreast of market happenings.
Conclusion
Cryptocurrencies are here to stay. There is no question about that. But the question is where is the best place to invest your money in the market?
Here are some other things to keep in mind as you decide which cryptocurrency you are going to invest in.
- Transaction completion speed
- Fees associated with the transaction
- Can you use your crypto for regular purchases and bank transfers?
remember, cryptocurrency is not a get-rich-quick scheme. You should keep this in mind if you decide only to invest in the cryptocurrency without transacting within the network. You should consider cryptocurrency as a long-term investment.
What is your opinion about the best cryptocurrencies to invest in? You might have a different idea about the best cryptocurrencies to invest in? so if you have please do share with us!
Source: Yahoo Finance