When you invest in altcoins, you should measure their success not just in USD value, but as well in BTC value. Why do so? There is a simple answer to that. If your cherry-picked altcoins don’t outperform bitcoin, you could easily stay HODLing bitcoin and you would make bigger gains!
2021 will be a year of a bull run. I must say, that I don’t feel confident with the 4-year cycle theory, which promises hundreds of thousands for bitcoin within the next year. More reasonable, in my eyes, are the cycles prolonging, due to the adoption level. So, even though 2021 will be a very successful year in crypto, the craziness comparable to the end of the year 2017, I would expect with a one- or two-years delay.
But anyway, let's jump into it. Here are my 3 altcoin picks for 2021, that will outperform bitcoin!
Pick no 1: Kusama
You are probably asking yourself: “Kusama? Really? The testnet of the Polkadot? What?!?”
Sure, Kusama! Not only it’s not just a testnet, it’s a canary network of Polkadot, where testing happens but with the real product. I will try to tell you, why Kusama will be a bigger gainer in 2021 than Polkadot.
There is still no specific date when the Parachain auctions will happen. But one thing is almost certain. Kusama’s Parachain auctions will happen earlier than Polkadot’s. Why? Because Kusama is the canary network, where all the new features are tested and put into operation. It makes no sense, that Polkadot will launch Parachain auctions earlier than Kusama.
What are the Parachain auctions then? The projects, that want to become a part of the Polkadot/Kusama network, need to win an auction. For that, they will need their own DOT/KSM tokens as well as tokens of their supporters, which will be locked for some time in a smart contract, for which the people who lock them will get rewarded (most probably in the native token of the supported project).
There will be a significant amount of KSM tokens locked in those smart contracts, Parity, who is behind both Polkadot and Kusama projects, is guessing that maybe 20% of all KSM tokens will be locked for those auctions! And do you know what makes with price, when there are less supply and same (or bigger) demand? Yes, the price is rising. Buying pressure outdoes the selling pressure.
Pick no 2: Cardano
Cardano went over to the Shelley era later this year, so now the staking within the Ouroboros Proof of Stake network is available for a few months already. But even a move to Shelley doesn’t mean, that Cardano supports smart contracts. Not yet. Smart contracts will be brought to the Cardano network with the arrival of the Goguen era.
The Goguen era, due to the roadmap, is scheduled for March 2021. Sure, thing is that nobody knows, if it will be delayed or not. But even a slight delay might put the launch to the 2Q of 2021. After that, all the craziness with Cardano (and ADA token) can begin, because only then, the project will be useful. For now, it serves only for sending ADA from Alice to Bob and for staking, where you can get interested around 5% per year. Not bad, but the community is awaiting this moment a lot.
One more thing needs to be mentioned. The Coinbase effect! Do you know what that means? Of course, you do – when coins are listed on the Coinbase exchange, their price suddenly pumps in tens of percent. I would say, that if it happens within 1Q or 2Q of 2021, the price can easily tide over 0,2 USD in just a few days.
Pick no 3: Algorand
Another smart contract platform is going to have a few huge steps to be successful. Just a few weeks ago, Algorands founder Silvio Micali announced the forthcoming upgrades of the network.
What are those upgrades?
Block finality will get lowered from 4,5 seconds to 2,5 seconds. Algorand will in the future propagate the new block not after finalizing the previous (within 4,5 seconds), but after the end of the propagating phase, which takes around 0,5 seconds.
Due to the improvements in the network coding, Algorand will fit into one block 5x more transactions than now. So, from 5 000 present transactions, there will fit 25 000 of them in the not-so-distant future. All thanks to the relay-node architecture of Algorand, which enables this improvement.
Thanks to those improvements it can be easily counted, that from present 1 000 TPS, Algorand will move to approx. 46 000 finalized transactions per second within the next year!
But Algorand will not be of interest only due to those upgrades, but as well as because of their partnerships. Algorand cooperates with AssetBlock on real estate tokenization and also with The Blockchain Game Alliance as a support of the online gaming industry.
Algorand is a harbor for stablecoins – already two largest (due to their market caps) USDT and USDC runs on the Algorand network. And stablecoins are the baseline for DeFi applications.
In April this year, Algorand started its 250 mil. grant program for financing future applications on the network, that allows innovations and research within the space. And the Algorand ecosystem itself. There were already awarded over 30 different projects!
One last and amazing info about Algorand is that it will be bridged to the Polkadot network by the Moonbeam bridge! That would open many opportunities, that are brought to the cryptospace by the whole Polkadot/Kusama ecosystem!
2021 in a nutshell
Interoperability, NFTs, DeFi. Those are 3 significant trends, that will rule the crypto market in 2021.
You can expect a rise in many different projects in 2021. Some like Dfinity will be launched, as well as the Parachains on Kusama and Polkadot (projects like Acala or Plasm Network). So, technologically, we can expect a very fruitful year.
When you are a bit more price-oriented, in my eyes, it’s a great chance to grab the opportunity of the incoming bull market season. Many projects, like Cardano, Algorand, and Kusama, are still so unevaluated! Their technology is simply ahead of their price. And that is important to realize.
