Cryptocurrencies is a form of digital money that is not controlled by a central authority such as the government. It is instead based on blockchain technology, with Bitcoin being the most widely used.
As the use of digital money grows on Wall Street, more possibilities become accessible. Currently, there are over 5,000 cryptocurrencies on the market.
While bitcoin can be used to make purchases, most people consider it to be a long-term investment. However, because cryptocurrency is volatile, it’s crucial to understand what you’re getting into before investing. The top eight cryptocurrencies worth investing in in 2021 are listed below.
Rating the Top Cryptocurrency Choices
You may get plenty of advice about how to invest in cryptocurrencies by conducting a quick online search. The following considerations were taken into account when selecting the top ten options.
Longevity
What is the history of cryptocurrency? New cryptocurrencies aren’t ruled out right away, but having historical data to compare to allows you to evaluate how a company has performed in the past.
Track Record
What has been the company’s performance over the years? It’s a positive indicator if prices remain consistent. It’s even better if you observe that the cryptocurrency is gaining traction and getting more valuable over time.
Technology
In terms of usability and security, how does the platform compare to others? The speed with which transactions are completed is the first thing you should check for. The network should have no trouble handling transaction traffic.
You should also ensure that your investment is safe. Blockchain technology is used by the majority of cryptocurrencies, making all transactions transparent and easy to follow. The use of blockchain technology does not always make it more difficult for hackers to steal your cryptocurrency. It makes it easier to trace your money so that it may be recovered rather than lost due to fraud.
Rate of Adoption
How many individuals are interested in the cryptocurrency you’re thinking about investing in? When a cryptocurrency has a high level of adoption, it suggests it has better liquidity. In the future, trading, selling, and spending will be simpler.
What are the Best Cryptocurrencies
The finest cryptocurrencies in 2021 aren’t just currencies; they’re also native assets for some of the financial world’s most exciting firms and enterprises. Mark Cuban and Andreessen Horowitz are both big supporters of altcoins, particularly decentralized finance (DeFi) investments, which have been hot this year.
Here are some of the most promising VC-backed cryptocurrencies to buy in 2021.
1 Bitcoin (BTC)
Bitcoin, the king of all cryptocurrencies, was the first and best-known cryptocurrency on the market. It also has the greatest market capitalization and is one of the most actively traded cryptocurrencies, providing investors with liquidity. When it comes to retail and institutional acceptance, Bitcoin reigns supreme. Most cryptocurrencies will follow Bitcoin’s price trend, thus if Bitcoin suffers, altcoins will likely suffer as well.
Given that the price of bitcoin is still below its all-time high of almost $64,000, purchasing now could be a decent long-term investment. Because there will only ever be 21 million bitcoin in existence (with roughly 15% of that amount lost), the price of the asset will rise as long as Bitcoin’s user base grows. Bitcoin now has a 1.7 percent inflation rate, which halves every four years in a process known as bitcoin halvening.
Investing’s Risks
Bitcoin’s value is notoriously volatile. During any given month, the price could fluctuate by thousands of dollars. If you’re worried about dramatic changes like these, you might want to stay away from Bitcoin. Otherwise, these changes shouldn’t be too troubling as long as you remember that bitcoin is a sound long-term investment.
Another reason to think twice about investing in Bitcoin is its high cost. Most consumers can’t afford to buy complete shares of the stock because a single share costs more than $50,000. This is a disadvantage for investors who want to avoid buying partial shares.
2. Ethereum (ETH)
Since its launch in 2015, Ethereum has seen enormous gains as the currency and platform that made smart contracts a part of the cryptocurrency market’s vernacular. Ethereum has become one of the most frequently discussed cryptocurrency projects in the world, trailing only Bitcoin in terms of market valuation.
Microsoft, Intel, Chase, and J.P. Morgan are among a group of companies working on business-ready versions of the Ethereum software. With the project’s momentum and market enthusiasm, there’s no reason to believe Ethereum has run its course, and investors should include Ethereum in their cryptocurrency portfolio. On Coinbase, Gemini, and Voyager, you can buy Ethereum.
Investing’s Risks
While Ethereum makes use of blockchain technology, there is only one “channel” for transactions. When the network is overcrowded, this can cause transactions to take longer to process.
Because of a weakness in the Ethereum wallet, more than $60 million in Ether was lost in a hack in 2016. While the corporation has made progress in terms of security, any cryptocurrency investment carries the risk of security flaws.
3. Polygon (MATIC)
Polygon is an Ethereum sidechain that is rapidly scaling DeFi. The networks’ struggle to upgrade to Eth2 has been highlighted by Ethereum’s high gas fees. Layer 2 scaling options, which execute transactions on a side chain before submitting a batch of transactions to Ethereum’s layer 1 blockchain, have received approval from Ethereum co-founder Vitalik Buterin. Users pay much lower transaction fees as a result, and transactions can be completed in a matter of seconds.
Layer 2 sidechains are crucial for scaling Ethereum, and Polygon was one of the first to implement them. Because assets must be bridged to the sidechain, there will be some switching expenses, which will encourage players to stay on Polygon in the long run.
4. Sushi (SUSHI)
Sushi, sometimes known as SushiSwap, began as a rival to Uniswap’s decentralized exchange. Since its beginnings, the app’s developers have improved it to include a number of features, with more to come in the near future. Sushi is distinct from Uniswap in that it pays dividends to Sushi token holders. SUSHI token holders can stake their tokens on the platform in exchange for 0.05 percent trading fees on all trades.
Aside from the SushiSwap DEX, the decentralized platform also includes lending markets, token launchpads, and leverage trading. Sushi wants to launch Shoyu, an NFT platform that will compete with OpenSea, which is currently the largest NFT marketplace. NFT sellers will be charged a 2.5 percent fee, which will be paid out in dividends to SUSHI token holders.
5 Chainlink (LINK)
The Chainlink decentralized oracle network is powered by the Ethereum currency Chainlink (LINK). This network enables Ethereum smart contracts to connect to other data sources, APIs, and payment systems in a secure manner.
SmartContract.com was Chainlink’s first foray into the industry in 2014. The name was changed to Chainlink shortly after its inception to better reflect the company’s core market.
In 2019, Chainlink formed a strategic relationship with Google. Chainlink’s technology was included in Google’s smart contract strategy as a result of the partnership. Investors hailed this move as a huge victory because it allows consumers to connect to two of Google’s most popular cloud services. Chainlink is a cryptocurrency that can be purchased on Coinbase and Gemini.
Investing’s Risks
While it ranks higher than thousands of other cryptocurrencies, it has lower volume and market capitalization than more enticing cryptocurrencies.
6 Solana (SOL)
Solana, one of Ethereum’s main competitors, has seen exponential growth in 2021. Solana is now trading for well over $200, up from lows of about $1 in the run-up to 2021. Solana is one of the largest blockchains for decentralized banking, with billions of dollars in cryptocurrencies locked up on its blockchain. For both NFTs and DeFi, many investors are turning to Solana’s blockchain.
Solana’s key advantage over other smart contract blockchains is its emphasis on scalability. To execute thousands of transactions per second, Solana employs a proof of stake consensus approach in addition to proof of history. Plus, Solana transaction fees are around 99 percent lower than Ethereum’s, making it an excellent option for regular traders who don’t have the resources to pay Ethereum’s three-figure gas prices.
7 Cardano
For numerous reasons, the Cardano network has a smaller footprint, which appeals to investors. Cardano requires less energy to conduct a transaction than a larger network like Bitcoin. As a result, transactions are both speedier and less expensive.
It asserts that it is more adaptive and secure. To keep ahead of hackers, Cardano is constantly improving its development.
Investing’s Risks
Cardano may not be able to compete with larger cryptocurrencies even with a better network. Fewer developers means fewer adopters. Most investors want to see a high adoption rate, thus this isn’t tempting to them. The platform has enormous ambitions, but there are concerns about whether it will be able to realize them.
8 Polkadot (DOT)
Polkadot was founded by Ethereum leaders who split out to build their own coin with a more advanced network. Polkadot offers numerous “lanes” to conduct transactions in, rather than just one.
This cryptocurrency was created to reward real investors while weeding out those who are only interested in making quick money on the stock market. Investors that are actively involved in the company also assist in the decision-making process on issues such as:
- Fees for the network
- Upgrades to the network
- Creating or dismantling parachains
Investing’s Risks
Gavin Wood, the founder of Polkadot, first announced the coin in a whitepaper in 2016. Polkadot began trading on the stock exchange toward the end of 2020. Polkadot lacks a track record for comparison due to its brief existence, making it a risky investment for potential buyers.
9 Ripple (XRP)
Ripple is the business that created the XRP coin and is appealing to investors because it offers international transactions, which sets it apart from other cryptocurrencies. International money transfers through a bank can take up to ten business days. The same transactions take seconds using Ripple.
Furthermore, Ripple has agreements with major banks all over the world. The more contracts the Ripple cryptocurrency has, the more accessible it is to adopters.
Investing’s Risks
Ripple’s value rose 36,000 percent in 2017, indicating its potential. However, the fact that the percentage represented increased to a stock value of $2.40 is less spectacular. Don’t get distracted by large percentages when investigating cryptocurrencies. Get down to the nitty-gritty of growth to see what it truly means.
10 Stellar (XLM)
Stellar Lumens, often known as XLM, was created to meet a specific demand in the cryptocurrency world. It functions as a bridge between banks and blockchain networks, similar to PayPal for cryptocurrency networks.
Stellar can convert any currency and exchange it across channels because it is a decentralized network. It makes these transactions less expensive and quicker than they would be if they were done through a typical bank.
Investing’s Risks
Because XLM serves a particular market, it will almost certainly face competition from other businesses. Stellar’s stock value could be impacted if another cryptocurrency network develops a better platform and steals traffic from it.
Final Thought
Cryptocurrencies are here to stay, there’s no doubt about that. The question then becomes, where is the finest spot in the market to invest your money?
Here are some other points to consider as you decide which cryptocurrency is the best investment for you:
The time it takes for a transaction to be executed.
Transaction fees are the costs associated with completing a transaction. The ability to make regular transactions and bank transfers with your cryptocurrency
If you’re only interested in investing and not transacting on the network, keep in mind that bitcoin isn’t a get-rich-quick scheme. Instead, think of it as a long-term investment.
