What cryptocurrency to invest in 2021?
Investing in cryptocurrencies can bring high returns: Bitcoin brought its first investors over 9000% ROI and Ethereum over 10000%.
But where there is a high potential income, the risks of losing the invested funds are also high. Therefore, the choice depends on many different factors. Some cryptocurrencies will remain relevant in the future, but some of them can replace more promising digital assets.
In this article, we’ll talk about the ten best currencies to invest in, what is the best cryptocurrency to invest in 2021, and what to look out for when choosing assets.
Bitcoin is the undisputed leader on our list. This is a coin that should be in the portfolio of every investor. This is because Bitcoin serves as an indicator of the market. There is even a BTC dominance index, according to which some traders can determine trends in the market and make transactions depending on how this indicator changes. Often, Bitcoin grows more actively than other coins when the dominance index begins to grow.
Bitcoin seems outdated from a technical point of view. Still, it is difficult to overestimate its contribution to developing a new decentralized financial system: it was with Bitcoin that the rethinking of the shortcomings of the existing global economy began. So this is the first answer to the question, “what cryptocurrency to invest in 2021?”
Ethereum became the first crypto coin to make an equally significant contribution to the development of the decentralized market. This allowed financial systems to become autonomous and not dependent on centralized intermediaries such as exchanges, banks, and other financial institutions. Today, Ethereum-based smart contracts are used by leading DeFi platforms such as Uniswap, Maker, and Aave.
These platforms make it easier for users to access digital financial products. For example, on Uniswap, you can exchange assets, but the funds are safely stored in your wallet. And on the Aave service, you can borrow and provide flash loans at low interest rates without the help of banks. All of this is governed by smart contracts.
Smart contracts are not the only feature of Ethereum. The service provides tools for creating your blockchains and smart contracts. Many notable projects have been released on the ether, such as the stablecoin Tether USD (USDT), Binance Coin (BNB), Chainlink (LINK), Uniswap Token (UNI), and many others. In addition, almost all major exchanges have issued their tokens on the Ethereum platform.
The main disadvantage of Ethereum lies in the low bandwidth and high cost of transfers. But now, a large-scale update for Eth 2.0 is being developed, which will eliminate these problems and take the market to a new level. As a result, ETH is one of the best crypto to invest in 2021.
BNB is a token issued by the largest and most popular exchange Binance. Initially, the token was created on the Ethereum blockchain but later migrated to its own Binance Chain.
Despite being a centralized marketplace, Binance is actively developing decentralized products: Binance Finance, Binance DEX, Launchpad, and Binance Smart Chain (BSC).
Binance is not just an exchange but an entire ecosystem that provides users with access to a wide range of financial products: staking, deposits, DeFi, mining, lending, and P2P exchanges.
Binance Coin is a functional token. BNB is used to pay trading commissions and transactions on its blockchain and participate in launchpads and launch polls, allowing holders to earn additional cryptocurrencies.
BNB has a lot of applications, so the token is valued by investors, and now it is among the ten largest tokens in terms of capitalization.
Cardano is an open platform that focuses on the security and stability of blockchain applications.
Developers have created and improved the system based on scientific research to achieve high performance, process optimization, and ecosystem security. Cardano created a new standard for decentralized technologies and organized its fund for the development of blockchain products.
Also, in the summer of 2020, the service released the Shelley update and added the staking feature. As a result, ADA holders can stake their tokens and receive additional passive income.
Tether is a cryptocurrency issued in 2015 by Tether Limited. USDT is a token that is a stablecoin – its value is fixed in relation to the US dollar. Vitaly Buterin, one of the developers of the Ethereum platform, believes that stablecoins will eventually have to take the position of an “instant bridge” between blockchains, the value of which will not rely on major exchanges.
When the rate of other altcoins fell under the pressure of COVID-19, USDT moved with the dollar. The USDT token is accepted for payment by many services and companies, travel agencies, and even financial systems. As a result, USDT is one of the best cryptocurrencies to invest in 2021.
Launched in 2012, XRP from Ripple Labs is one of the fastest and most scalable decentralized settlement payment technologies. XRP settles transactions in four seconds, making it faster than other currencies. All of Ripple’s work is focused on payment systems.
It is important to note that you do not need only to send XRP coins using this network. It is open source and can be helpful in cross-border transfers. Settlements on them can be made almost instantly, without the participation of a bank or other intermediary. While Ripple is primarily a payment network, third parties are considering other use cases for its technology.
Perhaps, in our top 10 best tokens of 2021, this currency should be called a phenomenon. Created “for fun,” today, the Dogecoin coin has grown tenfold and continues to hold its position among the most attractive currencies for investment.
It began to be actively used for charitable purposes, in particular, because of its cheapness and ease of use.
But most importantly, this cryptocurrency has become very popular. For example, Elon Musk played a role in the rise in Dogecoin prices. On his Twitter, he launched a joke about becoming the CEO of Dogecoin.
The Internet community appreciated the joke, and as a result, Dogecoin’s price went up. In addition to Musk, she is also actively promoted by Snoop Dog and Kiss Gene Simmons.
Dogecoin is still holding on to PR and hype. However, this makes it attractive to many investors.
Polkadot is an open, decentralized platform developed to create a reliable and flexible infrastructure in which blockchains can exchange data with each other.
Polkadot’s goal is to create a decentralized infrastructure for Web 3.0, the new Internet that will make cost-ineffective centralized governance a thing of the past.
This will be the evolution of the Internet, and the Polkadot service is at its epicenter. DOT tokens serve as the main economic unit of the entire ecosystem and its main driver. The network is managed decentrally by Polkadot holders, and useful validators that contribute to the platform’s development are encouraged.
USD Coin, or USDC, is a type of digital currency that differs from the classic cryptocurrency in that the USDC rate is pegged to the real US dollar and does not depend on bitcoin in any way. This approach is helpful for investors and traders who want to guarantee the safety of their assets. Previously, traders used stablecoin Tether or USDT because of the peg to fiat money, a currency guaranteed by governments and unsecured with precious metals.
But over time, Tether was replaced by a new stablecoin, USD Coin. This stablecoin hit the market in the fall of 2018. Its creator is the Center Consortium. This organization was founded by exchange Coinbase and Circle Internet Financial to replace stablecoin USDT with a stable cryptocurrency pegged to the US dollar. USDC was created based on Ethereum according to the ERC-20 standard.
Solana is an open-source, single-tier, high-speed blockchain designed to build decentralized applications (dApps) and deliver DeFi solutions.
The project is supported by the Solana Foundation based in Geneva, Switzerland. Distinctive features of the coin are high processing speed and scalability.
According to the authors of the project, Solana can process up to 50 thousand (according to some sources up to 65 thousand) transactions per second. At the same time, the size of network fees is minimal: up to $10 per 1 million, the theoretical limit is 710 thousand per second.
The developers assure that their innovations allow any business to safely scale to billions of users and devices worldwide without sharding and layer 2.
Chainlink is a service that provides a decentralized network of oracles. Smart contracts can autonomously process transfers and monitor the fulfillment of obligations of the parties. Still, they do not have access to data from the outside world, which limits their use.
Blockchain oracles translate data from third-party sources, such as stock quotes, event results, and other information, into a language that smart contracts can understand.
Unlike most other oracle platforms, Chainlink offers the highest data accuracy as it is processed by multiple independent oracles that eliminate fluctuations and data manipulation.
This, in turn, allows the creation of entirely independent DeFi products: decentralized services for solving various types of problems. As a result, LINK is one of the top cryptocurrency to invest in 2021.
Blockchain oracles are used by many well-known DeFi platforms, including Uniswap and Maker. And LINK tokens are used to pay for the services of these oracles, so they have real uses, which determines their value.
Stellar is a network for storing and transferring money. The project was found in 2014 to improve financial integration in various world regions and help companies transfer funds.
The network’s main goal is to offer an inexpensive payment service with fees of just 0.00001 XLM.
Stellar has managed to integrate with several fintech companies. The service provides transactions between various assets such as stablecoins.
What is the best cryptocurrency to invest in 2021? There are many currencies available on the market that are worthy of your investment. However, you shouldn’t choose just one of them. Instead, experts recommend investing in cryptocurrency portfolios. This allows you to diversify risks and increase profitability.