cryptocurrency to invest in 2021

Top Five Cryptocurrencies to Invest in 2021

Ever since the first cryptocurrency, Bitcoin, was invented in 2009, the cryptocurrency market has unarguably proved to be one of the most profitable investment avenues. It is even more profitable than conventional investment avenues such as stocks and commodities like oil and gold. However, 2013 was the year when people got to know about Bitcoin, and cryptocurrency to invest in 2021 since then, the cryptocurrency market has been seeing tremendous growth.

With more than 7,000 cryptocurrencies today, if you want to choose a cryptocurrency to invest in 2021, it will certainly not be an easy task. Therefore, we at FinanceShed have put our best minds to work and have come up with the top five cryptocurrencies to invest in 2021.

Before we see these top 5 cryptocurrencies to invest in 2021, let us give you good news! According to many crypto experts and enthusiasts, 2021 is perhaps going to be the best year to invest in the cryptocurrency market. So, if you have already done the risk-reward analysis and have made up your mind to invest in cryptocurrency in 2021, then just find an opportune time and go for it!!

Now, let us have a look at the top five cryptocurrencies to exchange in 2021:

Bitcoin (BTC)

cryptocurrency to invest in 2021

Source: sundayguardianlive.com

A quick snapshot:

Approximate Market Cap: $900 billion

Year of the invention: 2009

Cost per transaction: $15

Returns in 2020: 309%

USP: Best for retail adoption

If you have heard of just one cryptocurrency, it is probably going to be Bitcoin. Bitcoin is the biggest cryptocurrency by market cap and presently has a 40% share in the total cryptocurrency market cap. It is even the oldest and the most popular cryptocurrency. Even the Tesla man, Elon Musk, invested a hefty amount in Bitcoin last month. Since Bitcoin is highly traded, it offers seamless liquidity to its investors. 

Moreover, Bitcoin is the undisputed king when it comes to retail adoption. Other cryptocurrencies are basking in Bitcoin’s glory and are being considered as a potential payment medium. However, Bitcoin’s prices are very unpredictable and volatile.

The price of one Bitcoin has increased from around $76 in September 2013 to as high as $20,000 in December 2017. That was the highest it has ever reached but later its price dropped to around $6000 in February 2018 and has been dwindling ever since. Its prices are on a crazy roller-coaster ride indeed!

Some more things to know about Bitcoin

Bitcoin is also the most expensive cryptocurrency. However, it offers a bundle of benefits such as user autonomy, easy accessibility, secure transactions, and the absence of banking fees among many others. ‘The Gold of Crypto Coins’ as Bitcoin is called, even Bitcoin had to bear the brunt of the COVID-19 pandemic. Its prices went crashing down to $4000 per Bitcoin. Nonetheless, it recovered quickly and is now trading at $49,000, and it is expected to grow even further.

Top hedge fund and banking experts opine that Bitcoin’s prices can soar up to and can even go beyond $100,000 by the end of 2021. Even the Citi Bank claims that Bitcoin could hit $300,000 next year, which is roughly six times its current value! 

Thus, if you are looking for a cryptocurrency to invest in 2021, Bitcoin should certainly be in one of your top five choices.

Ethereum (ETH)

cryptocurrency to invest in 2021

Source: sfox.com

A quick snapshot:

Approximate Market Cap: $176 billion

Year of the invention: 2015

Cost per transaction: $10

Returns in 2020: 470%

USP: Holds most market enthusiasm

Ethereum is the second-most popular and second-biggest cryptocurrency after Bitcoin. It has a fairly strong market cap. It was in the year 2017 when Ethereum’s prices sky-rocketed by over 3000%, thereby placing it second, just after Bitcoin. 

However, unlike Bitcoin, Ethereum is not only a digital currency but it is also a more advanced blockchain project. Ethereum offers a very unusual and unique benefit vis-à-vis other cryptocurrencies. Developers can build their own cryptocurrencies by using Ethereum’s platform. Thus, we can say that Ethereum makes the process of launching new blockchain projects easier.

Few of its other benefits include high liquidity owing to its high demand and compatibility with smart contracts and decentralized mobile applications (dApps).

Blockchain experts claim that the market cap of Ethereum will become as high as $200 million by the end of 2021. Moreover, Ethereum has plans of bringing in enhancements in its technology this year. Its new protocols are almost ready to go as well. Thus, in our opinion, Ethereum is absolutely a cryptocurrency worth watching out for in 2021 and is, therefore, one of our top five cryptocurrencies to invest in 2021.

Ripple (XRP)

cryptocurrency to invest in 2021

Source: bitcoin.com

A quick snapshot:

Approximate Market Cap: $20 billion

Year of the invention: 2012

Cost per transaction: Nominal

Returns in 2020: 16%

USP: Best for high-speed transfers

An invention of Ripple Labs, Ripple is mainly known for XRP, its currency, and RippleNet, its innovative digital payment platform. It is different from other cryptocurrencies in many ways. It offers a variety of benefits such as a surprisingly low exchange rate and instant confirmation of payment transfers. Therefore, it is extensively using worldwide in high-speed and low-cost money transfers.

In addition to a digital currency, Ripple is also a payment system. It leverages blockchain technology to make international money transfers easier, faster, and safer. Many large financial institutions such as JP Morgan and American Express have already adopted Ripple’s technology. Moreover, Ripple Labs has entered into partnerships with leading money transfer service providers. Many such partnerships further expect in the future.

Ripple has witnessed a breathtakingly glorious past. In 2017, its market cap soared by about 36000%! Its price was $0 at the beginning of 2017 which reached $2.4 by the end of the year.

However, do not think that you have missed out on an exciting time to invest in Ripple. In our opinion, now is the best time to buy Ripple as its price is quite low and affordable as compared to its other cryptocurrency competitors. Its price has dropped to almost $0.45 as compared to its all-time high of $3.4 in 2017. Thus, it certainly deserves to be among our top five cryptocurrencies to invest in 2021.

Litecoin (LTC)

cryptocurrency to invest in 2021

Source: currency.com

A quick snapshot:

Approximate Market Cap: $12 billion

Year of the invention: 2011

Cost per transaction: Nominal

Returns in 2020: 172%

USP: Known for fast transaction time

Just like Ripple, Litecoin has also witnessed an impressive performance in 2017 by registering a growth of almost 8000%. Its price was approximately $4 at the beginning of 2017 which rose to around $358 by the end of the year. However, it has been dwindling since the beginning of 2018. Nonetheless, it is the fifth-largest cryptocurrency and its close association with Bitcoin further lures investors towards it.

Litecoin was mainly created to enhance Bitcoin’s technology and rightly so. Litecoin can complete a digital transaction four times faster than Bitcoin. Not only that but also the maximum supply of Litecoin is capped at 84 million, four times that of Bitcoin. 

Also called the ‘Silver of Cryptocurrency’, Litecoin was the first cryptocurrency to perform a lightning network transaction in 2017. For all those who do not know, the lightning network is a new technology that increases the speed of transactions on the blockchain network. Using this lightning network, 0.00000001 Litecoin could be transferred from Zurich to San Francisco in less than one second! 

Thus, Litecoin, undoubtedly, is one of the top five cryptocurrencies to exchange in 2021.

Also Read: Tesla Invests in Bitcoin: Find Out What, Why, and How, Here!

Bitcoin Cash (BCH)

cryptocurrency to invest in 2021

Source: metalpay.com

A quick snapshot:

Approximate Market Cap: $9 billion

Year of the invention: 2020

Cost per transaction: Nominal

Returns in 2020: Not applicable

USP: Best alternative to Bitcoin

Bitcoin Cash, a fork of the original bitcoin project, was developed using the modified code from the Bitcoin project. Thus, Bitcoin Cash allows larger block sizes, enhanced scalability, and faster transaction times. However, the expert opinions around Bitcoin Cash are quite mixed. Nonetheless, it is still a promising alternative to Bitcoin

Therefore, even with all the controversies surrounding Bitcoin Cash, in our view, it is still one of the top five cryptocurrencies to invest in 2021.

A Quick Word on Security!

cryptocurrency to invest in 2021

Source: investorplace.com

Having shared our two cents on the best cryptocurrencies to invest in 2021, we cannot bid adieu to our readers without sharing a word or two about security.

Many investors have seen their crypto journey come to an end because they failed to pay enough attention to security. Thus, if you are truly keen on investing in cryptocurrencies, you ought to take special efforts to protect your investment in cryptocurrencies by reinforcing your security

For instance, you can enable 2FA (two-factor authentication), you can ensure you do not leave your coins in an exchange, you can own a hardware wallet, and you can simply stay vigilant of scams and suspicious activities.

Hope you enjoyed reading this article. For more such informative and insightful articles, you can have a look at FinanceShed

Stay tuned and happy reading!!