Cryptocurrencies had quite a year in 2020, with the market having seen a period where the prices for cryptos fell off a cliff and then rebounded to soar to record highs. You could invest in several altcoins, but not having a clear picture of which coins to look out for creates more confusion. So which are the coins that could make you a fortune? Let's take a look at 5 altcoins to watch this year.
There are several cryptocurrencies that you can choose from to invest in. Some cryptocurrencies like Bitcoin and Ethereum have been around for a long time, while several others are new but equally promising.
Here are the five altcoins that show the most potential in the markets and the ones that you need to watch this year.
The Top 5 Altcoin to Watch in 2021:
1. Ethereum (ETH)
Ethereum is expected to have a bullish 2021, with most price predictions forecasting an exponential price increase. And this trend is visible if we look at the performance of ETH throughout 2020.
Ethereum was probably the most stable altcoin in the market, with no sudden falls in value. In fact, the overall trend for the crypto asset was a gradual increase in price all through 2020.
Towards the end of 2020, we see some significant movement in ETH, with a marked increase in value.
This trend continued in 2021 when ETH jumped from $740 on January 1 to $1327 on January 10. The price did encounter some resistance at this level and fell back to around $1040 the next day.
Since that minor blip, the price of ETH has been on an upward trajectory, with the currency crossing the $1300 mark by the end of January 2021. February started on another positive note for ETH, with the currency jumping to $1672 by February 4. In April ETH price broke the $3500 level.
ETH hit its all-time high of $4,362 in May, breaking the psychological $4000 barrier. Even though it couldn't hold the price and fell back, it is predicted to rebound.
Ethereum is in the middle of a bullish phase, with the cryptocurrency market as a whole surging.
ETH is easily one of the best performing altcoins in the market, second only to Bitcoin. There are several reasons behind this. Market sentiments are generally very positive towards cryptocurrencies. The Covid-19 pandemic and the global economic decline have also brought the digital asset into focus, turning investor interest towards cryptocurrencies.
So what are the factors that could drive the price of Ethereum? There has been considerable interest in decentralized applications and DeFi, and that interest is set to increase in 2021. This is expected to considerably drive up ETH's price as Ethereum is the go-to platform for DeFi and decentralized applications.
Ethereum 2.0 is expected to transform the digital asset, with the platform shifting from a Proof-of-Work consensus mechanism to a Proof-of-Stake mechanism, giving it the capability to process thousands of transactions second and improving scalability.
Ethereum is also attracting considerable institutional interest, with institutional investors realizing ETH's potential as a store of value. A number of institutions have taken positions making the digital asset a favourite among investors.
The soon-to-be-launched Ethereum focused funds will also give ETH more exposure.
Read More: Is Ethereum a Good Investment Right Now?
2. Ripple (XRP)
XRP entered the market at a price point of $0.0058, maintaining this price level for a while.
XRP traded at levels of $0.0058 for most of 2013, subsequently trading at a higher price in the following year. The valuation stayed relatively modest until 2017, which is when XRP's first real surge happened. XRP's price rose to $0.41 by the middle of May. The rate found stability at the $0.20 mark and generally traded above that until the end of the year.
XRP reached record price levels in 2018, reaching its all-time high of $3.84 on January 4. However, it could not hold this price, and the price fell to $0.20 by the end of May 2019. A slight increase in the price saw the coin trade at $0.54 in September and October before closing the year at $0.35.
XRP started 2020 at a price of $0.19; an increase in price thanks to a mini bull run propelled the currency to $0.3. The altcoin consolidated its price between $0.15 and $0.30 before seeing a fall in price. XRP's price rose to $0.62 by the end of November 2020 but fell sharply by the end of December due to issues with the SEC.
Ripple's price has been fairly consistent for the past few months, albeit with a couple of price jumps.
The price of XRP rose from $0.44 to $0.69 on November 2020, after which it dropped to $0.26 towards the end of December 2020. This price drop can be attributed to XRP's issues with the SEC. It couldn't break the $0.32 mark until the end of January 2021, when its price surged to $0.50.
This jump in price can be attributed to a crowd pump, similar to GameStop, which was fueled by a Telegram group known as Buy & Hold. Currently, XRP is trading at $0.87.
Ripple's plans for 2021 include creating a payments system that banks can use to transfer funds internationally and domestically. The success of this system could have huge ramifications on the price of XRP. Ripple has partnered with financial institutions like Banco Santander, HSBC Holdings, JP Morgan, Mizuho Financial Group, and MoneyGram.
Even though XRP started the year on a bearish note, thanks to a drop in value towards the end of 2020, most analysts believe that the altcoin would recover its losses as its price rebounds. It isn't expected to hit the highs of 2018 but some price predictions forecast that XRP could test the $2 mark by the end of 2021.
If there is sustained institutional interest, then XRP could break the $2 mark as well, according to some predictions.
Check Out: Ripple Price Prediction
3. Litecoin (LTC)
LTC is remembered for its legendary price rally of December 2017 when the altcoin reached its highest ever price of $375.
If we look at LTC's price history of 2020, it has had a fairly stable year. Its price rose from $41.67 on January 1 to $82 by the middle of February. The altcoin could not find any support at this price level, and the price dropped to $32 by the middle of March. However, LTC has maintained an upward trend in price since its price increases gradually to break $40. The price stayed between $40 and $50 till the end of July when LTC saw another bull run. The price peaked at $67 on August 18, 2020.
November saw the price of LTC touch $88, and the bull run carried on in December, with the altcoin reaching a high of $131 on December 2020.
2021 also started on a positive note for LTC, with the currency peaking at $179 in January. The bull run didn't stop there as LTC, after encountering some volatility, rallied again with its price shooting past the $200 mark.
This rally peaked on February 20, when the price touched $235. Currently, LTC is trading at $342, and its price is expected to rise further.
Analysts predict that LTC's price would see a significant increase in 2021. This increase can be attributed to new partnerships and integrations that Litecoin has in the pipeline for 2021.
Litecoin's developer community also plays a significant role in determining the price of LTC, with regular updates and improvements to Litecoin seen as having a positive impact on the price.
LTC is expected to perform better than other altcoins in 2021, with most analysts predicting that its price could cross the $500 mark.
Don't Miss: Could Litecoin Be A Millionaire-Maker Coin?
4. Cardano (ADA)
Cardano's initial rally at the end of 2017 and the beginning of 2018 saw the altcoin surge in value from $0.027 to $1.28. However, it could not sustain this price level, and the price fell to $0.509 in a little over a fortnight.
ADA's price kept dropping, and by the end of 2018, its price was down to $0.042. 2019 started on a brighter note for ADA, with the price reaching $0.05 by February.
The price fell to $0.035, finding support in this range and rising to $0.10 by April. The price dropped to $0.057 again before reaching $0.11 in June.
2020 started on a bearish note for ADA, with its price at around $0.03. The price rose to $0.07 by the middle of February. However, it could not push beyond this point, and the price fell again. This fall in price can be attributed to the COVID-19 pandemic and the sell-off that the pandemic triggered.
By August, ADA had recovered, and its price touched $0.14 before encountering resistance. As a result, the price fell again before another rally in November saw ADA's price peaking at $0.18 for the month of December 2020.
ADA has caught the eye of investors in 2021, with its price surging since the start of the year.
The price jumped from $0.34 on February 1 to $0.94 on February 13 and reached $1.56 in April. The rally didn't stop there, with ADA's price reaching its all-time high of $2.46 in May.
Most analysts predict that ADA's price will surge in 2021 on the back of more projects on the Cardano platform and due to mass adoption. With Cardano gaining popularity, investor interest in the digital asset will also increase, pushing the price higher.
Some analysts predict that ADA will realize its full potential and could set even higher price markers as the year progresses.
Don't Miss: Cardano (ADA) Price Prediction
5. Stellar Lumens (XLM)
After its rally of 2017, Stellar Lumens has been going through a pretty rough patch. However, the altcoin has rebounded, recouping its losses.
XLM's growing popularity is expected to drive long-term growth significantly. Currently, XLM is trading at around $0.41, a far cry from its all-time high of $0.93.
After achieving its highest price, XLM has seen a gradual fall in price; however, the bearish sentiment was attributed to the cryptocurrency market as a whole seeing a downturn.
XLM lost significant valuation thanks to the bear market. 2019 started in a similar vein for the altcoin, with its price unable to break $0.15 for most of the year, except for one brief moment in May 2019.
However, XLM's price saw a significant movement towards the end of November, rising from $0.082 on November 19 to $0.20 on November 26. The price encountered some volatility and resistance at this point; by the end of December, the price fell to $0.13.
XLM started the new year in stellar fashion, with its price jumping from $0.12 on January 1 to $0.33 on January 8. Once again, XLM encountered some resistance but rallied again after falling to $0.24, reaching a peak of $0.54.
Most predictions state that XLM could be in for a bullish year in 2021, thanks to renewed interest in XLM as an investment asset and an increase in the popularity of DeFi.
One major factor that will have a positive influence on the price of XLM is IBM World Wire. The collaboration with IBM hopes to improve financial services by optimizing remittances, cross-border payments, and foreign exchange.
Read More: Stellar Lumens Price Prediction
Altcoins To Watch This Year: Conclusion
Accurately predicting the prices and price trends of cryptocurrencies is a tricky affair, with their price depending on market sentiments and the price of other cryptocurrencies. However, these are the 5 altcoins to watch this year.
Several factors point to a favourable and bullish year ahead for these altcoins, with all five of them predicted to grow considerably.
Each investor has a different goal in mind while investing, however, investing isn't risk-free, and it is important to do your research thoroughly before investing.
eToro – The Best Platform to Buy Cryptos
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.