3 Cryptocurrencies To Watch Closely In January 2021
After a historic 2020, most investors are looking towards the cryptocurrency market with a renewed vigor. The short-term bearish corrections that the coins are currently going through have given investors a new entry point into the market. So, having said that, let's look at the top 3 cryptocurrencies we will be watching very closely in 2021.
Top 3 Cryptocurrencies to Watch Closely in January 2021:
1. Bitcoin - The Crypto Market Leader
The first cryptocurrency that we are going to talk about is Bitcoin. Being the crypto market leader and the benchmark cryptocurrency, Bitcoin is expected to reach new heights in 2021. Firstly, let’s check out the hashrate. Higher the hashrate, the higher the speed and security of the overall network.
As you can see, after the hashrate dipped between 24th and 27th October, it has managed to rise and trend above 125 EHash/s. Ideally, a high number of miners entering the ecosystem equates to a higher network hashrate. As such, there is another interesting graph that we should be looking into – the mining profitability.
When you see the mining profitability chart, we can see a dip around May 2020, following the halving. However, the chart has spiked up recently following BTC’s price spike. This should attract more miners to Bitcoin, which bodes well for the entire ecosystem.
2. Ethereum – Technological Advances With ETH 2.0
Ethereum has been the smart contract platform leader, and by extension, the DeFi platform leader for quite a few years. They recently made their upgrade to Ethereum 2.0, which included incorporating several technologies like – proof-of-stake, sharding, zk-rollups, etc.
So, why is this significant?
Ethereum has always had severe scalability issues. A few years back, “Cryptokitties” was the hottest new dApp (decentralized application) in the market. However, it caused a severe strain in the Ethereum blockchain, which resulted in a host of issues.
Lately, with the rapid rise in the number of DeFi applications entering the market, Ethereum needed to update its outdated systems to account for this increasing utility.
Thankfully, with the Ethereum 2.0 upgrade, the underlying protocol will finally be scalable enough to accommodate these applications.
3. Ripple – Bumpy Road Ahead, As SEC Decides To Play Grinch
Following a mid-December jump, it, unfortunately, looks like Ripple is poised for a sharp drop. Recently, news came out that SEC plans on suing Ripple for “allegedly selling unlicensed securities in the form of XRP tokens.” As of now, it is hard to tell how sharp this drop will be.
However, this could be an opportunity for XRP to pick up “lapsed traders” who may want to leverage this drop and increase their Ripple holdings.
Plus, several financial institutions have discovered the true value of cross-border remittance during the Pandemic. With Ripple offering this as their main use case, one can expect Ripple to boost their already impressive partner list with several more valuable partnerships.
All-in-all, XRP could potentially be a dark horse candidate for 2021. However, do keep an eye out on how the SEC vs. Ripple case pans out.
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