It wasn’t very long ago that cryptocurrency was largely associated with unsavory and malicious activities on the internet. The introduction of decentralized finance to the computational world created a massive demand for cryptocurrencies when it first came out, but as with all technological enterprises, growth in popularity has been exponential.
Today, cryptocurrency is traded and managed by many average internet users, as crypto exchanges become more widely available and more user-friendly. Meanwhile, the amount of different cryptocurrency tokens to choose from is constantly increasing, as people are putting decentralized finance and Blockchain technology to ever more innovative uses.
If you are looking to invest in cryptocurrency in 2021 and are unsure about which crypto to invest in, you have come to the right place. With over a hundred different cryptocurrencies to choose from and with values and exchange rates constantly shifting, it is not easy to decide from among the top cryptocurrencies to invest in.
This article will provide a list of the top 10 cryptocurrencies for investment in 2021, outlining various important features of each such as longevity, adoption rate, track record, and associated technology. Moreover, the article will outline some of the benefits and risks associated with each cryptocurrency. By the end of the article, you will have a much better understanding of some of the best cryptocurrencies out there and will be better equipped to choose the right cryptocurrency for you.
It isn’t difficult to see why Bitcoin is one of the most popular cryptocurrencies for investment out there, as it has been around for the longest time. Bitcoin has a market cap, price, and volume that is much higher than any other cryptocurrency out there, representing around 40% of the market cap.
The growing adoption rate of Bitcoin ever since its creation is the biggest factor in what makes this one of the best cryptocurrencies to invest in. Both retail and institutional investors are likely to dip their toes into Bitcoin before investing in any other type of cryptocurrency. Moreover, what makes Bitcoin a smart investment is the fact that many businesses today are already accepting Bitcoin as a valid payment option.
Investing in Bitcoin does not come without risks though. Due to its popularity amongst crypto traders, the value of Bitcoin tends to fluctuate quite a lot. While these fluctuations tend to be nerve-wracking in the short term, increasing or dropping by thousands of dollars in a few days, Bitcoin is still a smart long-term investment. Moreover, a single share of Bitcoin today costs around $50,000, which is far too costly for an average crypto investor.
While Ethereum has recently picked up a lot of popularity and pace, it is different from Bitcoin in that it is not just a cryptocurrency. Importantly, Ethereum is also a network, known as the Ethereum Virtual Machine, where developers can create their own cryptocurrencies and crypto use cases. Ethereum may be far behind Bitcoin in terms of value, but it is also far ahead of all its other competitors. With an 18% share of the cryptocurrency market, Ethereum is one of the best cryptocurrencies for investment in 2021.
All in all, Ethereum represents a powerful use case of Blockchain technology and decentralized finance that allows users to create smart contracts and non-fungible tokens without the mediation by a third party or centralized platform. This is partly what has made Ethereum such a popular investment option among crypto investors.
However, investing in Ethereum does not come without risks. Since Ethereum only has one lane for conducting transactions, when the network is overloaded transactions can take very long to process. Since decentralized finance’s value is dependent partly on the processing speeds, this might be a huge turn-off for many people looking to invest in cryptocurrency.
3. Binance Coin
Binance is a cryptocurrency exchange platform that is today one of the most widely used cryptocurrency exchanges available online. The platform also hosts its own crypto token known as Binance Coin which, in recent years, has proven equally popular.
Unlike most other cryptocurrencies, Binance Coin has followed a slow but consistent trend upwards since 2017. Due to its performance in the crypto world ever since, Binance Coin is today one of the most stable cryptocurrencies out there, offering a stable investment option with fewer risks of facing fluctuations in value.
Unlike other cryptocurrencies, Binance Coin was not created by tech developers but was instead created by a company. Due to this, many investors are skeptical about security concerns despite the relatively strong Blockchain.
Tether is a cryptocurrency that unlike many of its competitors is tied to the value of real-life fiat currency. In this case of Tether, it is tied to the value of the United States dollar. In other words, for each unit of Tether available, there is one corresponding dollar in the Federal Reserve Bank. For this reason, Tether has proven to be a great investment option for those looking to make transactions with their crypto.
While Tether is a great investment option for many crypto investors, some people have raised potential doubts about its reliability, more specifically about whether there is actually a corresponding dollar in the Federal Reserve for every unit of Tether. If this were ever to be disproven, or even if enough doubt about this were sowed in the public sphere, the value of Tether would drop significantly.
Cardano may be a much smaller network compared with most other cryptocurrencies, however, this may prove appealing to crypto investors. Due to its smaller footprint within the crypto sphere, Cardano is easier, faster, and cheaper to transact. Moreover, Cardano has proven to be very adaptable in terms of its security features as they consistently improve their platform given new security concerns. For potential crypto investors, this trend of consistent improvement is normally a very good sign.
However, there are a few risks associated with investing in Cardano. Due to its relatively small footprint, Cardano is practically unable to compete with many of the larger cryptocurrencies available today. This means that the adoption rate of Cardano is low, which subsequently means that there are fewer developers, which is not appealing to most cryptocurrency investors.
Polkadot is a cryptocurrency created by Ethereum leaders who broke away from the mold to create their own crypto with a better network. As mentioned earlier, Ethereum only has one lane for conducting transactions. Meanwhile, Polkadot has several lanes, making this a viable option for investment in 2021.
What separates Polkadot from other cryptocurrencies is that the Polkadot network was designed to reward genuine investors in cryptocurrency and weed out those people who are just looking to make money fast by trading on the stock market. Consistent investors in Polkadot are also allowed to make decisions such as network fees and upgrades.
The Polkadot network is then one of the best cryptos to invest in, as the network rewards investors for maintaining the value of Polkadot. For this reason, the future of Polkadot looks very promising; a fact that has attracted many more genuine investors to this cryptocurrency.
However, it must be said that Polkadot’s short lifespan makes it a relatively risky investment as it doesn’t have a large track record or database with which present trends can be compared.
Ripple is a cryptocurrency that has proven to be appealing to crypto investors because it offers international transactions. Using Ripple, the same international bank transfer that can take up to 10 business days to process can be completed in a matter of seconds.
Moreover, Ripple has contracts with some large banks across the world, making it highly stable. The more contracts Ripple has with big banks, the more accessible this cryptocurrency becomes for adopters leading to more investors flocking to this cryptocurrency.
In 2017, the value of Ripple jumped by 36,000%, which attracted many new adopters and investors to this cryptocurrency. However, this percentage increase only represented an increase of $2.40 in stock value, which is certainly not all that impressive.
A risk associated with cryptocurrencies like Ripple is therefore the tendency to get distracted by large percentages without researching the real numbers and understanding what that percentage growth means.
Although Litecoin hit the crypto market in the same year as the infamous Bitcoin, it did not take off in the same way. What makes Litecoin one of the most appealing investment opportunities today is the transaction speed, which they boast is up to four times faster than the transaction speed of Bitcoin.
In fact, in 2017 Litecoin completed a transfer in less than one second, becoming the first cryptocurrency to achieve what is known as a Lightning Network Transaction. If the Litecoin network can keep this up, we could see a dramatic increase in its value over the next few years.
However, the potential investor of Litecoin must be aware that since Litecoin is closely tied to Bitcoin, its value will also fluctuate up and down depending on the fluctuations in the value of Bitcoin. Since many investors consider the volatility of Bitcoin to be negative, this could also translate as a risk for investing in Litecoin.
With so many different cryptocurrencies to choose from today, potential investors much perform diligent research before investing in any single cryptocurrency. There are so many factors that go into choosing the best crypto to invest in, that it might be best to invest in more than one currency.
However, given the trends over the past few years, it would be difficult, yet not impossible, to go wrong with any of the above cryptocurrencies. If you are investing in crypto for the first time, it is highly recommended that you invest in one of the cryptocurrencies listed above, as they are most likely to give you a head start.