There are now more than 8000 cryptocurrencies listed on CoinMarketCap, the largest crypto price tracking list in the industry. With so many coin options, most of which are relatively new, it is hard to understand which cryptocurrencies you should invest in, e.g. purchase Bitcoin or Ethereum, and which to stay away from.
As 2020 comes to an end, we decided to compile a list with our favourite picks for 2021, and pursue you to research them more thoroughly. After reading this post, you should have a better idea of the most promising coins for the year ahead of us.
The best cryptocurrency to invest in
The best cryptocurrency to invest in for 2021 is Bitcoin. While the coin may be the oldest and most expensive cryptocurrency available, it is the one with the least downsides while also having the most upside potential. Here are a few reasons why:
- The instability of the economy makes more investors look into alternative stores of value that are not controlled by third parties. The two most popular options are gold and Bitcoin. Gold has a market cap of $10 trillion. Bitcoin has a market cap of $0.5 trillion.
- Bitcoin recently underwent its 3rd halving event, decreasing the mining rewards to 6.25 BTC per block. While this may not say much to you, it has been observed time and time again that the year after a halving occurs, Bitcoin seems to rally, on average, 17 times higher than its recent price bottom.
- Institutions are already buying and saving up Bitcoin, while governments are currently exploring the potentials of mining with their energy reserves.
- The media is once again picking up the Bitcoin topic as the coin recently touched its prior all-time high, before stepping lower to maintain its value at the $19.000 level.
The second-best cryptocurrency to invest in
Our contender for the title is Ethereum. Unless you have been living under a rock, you probably know that Ethereum recently introduced its PoS upgrade, namely ETH 2.0. By doing so, the project positioned itself for great success within the coming year. Here’s why:
- By staking Ethereum, users can now earn between 5% and 20% APY. The number is significant as it allows or many holders to start earning passive income.
- To receive this passive income in a private wallet, users will need to stake at least 32 Ethereum in their wallet and hold onto it for a longer time frame. This high limit will naturally increase the amount of sold Ethers within 2021, thus increasing their demand.
- Ethereum is still one of the most popular cryptocurrencies currently placing second in CoinMarketCap. Due to this, the public is more aware of it, and most popular exchanges list it as one of their top cryptos.
Other cryptocurrencies to invest in
Apart from Bitcoin and Ethereum, there are more cryptocurrencies you could consider investing in. However, you need to keep in mind that the risk: reward ratio for these is significantly higher. Some of our favorite coins include:
- BNB – The exchange-based token of Binance is one of the best choices when it comes to long-term sustainability. The coin was one of the best performers during the latest bear market and is currently hovering about $30 in value.
- XRP – After some interesting announcements, as well as a potential coin burn in the short term future, XRP witnessed a 169% growth in the month of November alone. It currently is still 80% below its all-time high and has a lot of potentials.
- WRX – The popular exchange-based token of cryptocurrency exchange WazirX is one of the coins with the highest potential. This is due to the fact that India is still imposing a ban on cryptocurrencies which, if lifted, could exponentially increase the coin’s price.
- DOT – Polkadot is relatively similar to Ethereum, with the difference in its focus. It aims to become the foundational coin for all decentralized blockchain development. Its founder is also an ex-founder of Ethereum.
- ZEC – With the increase of popularity in cryptocurrencies we might see an increase in privacy transactions as well. ZEC is one of the older privacy coins around and one that is certainly worth considering. The coin is also much below its ATH compared to Bitcoin.
Now that you have a better idea with regards to the different cryptocurrencies you can invest in, it might be a good idea to perform a bit of further research on the coins that most interest you.
While it may be challenging to analyze all the gathered information, it is worth the time, given that it could potentially lead to high profits on your side.
Keep in mind that everything in this article does not constitute financial advice and is only written for educational purposes. So invest responsibly and always research thoroughly.