2021 is all set to become one of the biggest years for cryptocurrencies. 2020 has been one of the most challenging years that we have ever faced. Not only has the COVID-19 pandemic wrecked several families, but it has ravaged the global economy as well. However, towards the end of 2019, investors have tended to use cryptocurrencies as a hedge against significant economic risks.
What does this mean for cryptocurrencies in 2021?
This has two major implications for digital assets in 2021:
- Firstly, with cryptocurrencies proving themselves to be investor-friendly in late-2020, one could expect more influx. Many financial institutions have started recognizing the game-changing potential of crypto, while some, like MicroStrategy, have started making huge investments. This has positive implications for overall network growth.
- Secondly, with digital payments becoming the new normal, it could have tremendous implications on mass adoption. Plus, along with DeFi becoming big, it could have even more positive long-term implications.
So, how can you get your slice of the crypto pie? Well, suppose you have $2,000, here is what you need to do.
Looking for growing cryptocurrencies in 2021?
The Top 5 growth cryptocurrencies to consider buying and holding in 2021
We have put together a list of the best growing coins in 2021.
So without further ado…
1. Bitcoin - isn't going anywhere and will continue to grow
Over this year, Bitcoin has grown up 158% and is currently trading for $57,460, with a market cap of above $1 trillion. Many might consider BTC to be a little too overpriced. However, many analysts believe that we are on the cusp of a significant bull run.
Firstly, as we have already mentioned, there is a growing amount of institutional interest. MicroStrategy has already bought a little over 40,000 BTC. Tesla has disclosed that it has bought $1.5 Billion worth of Bitcoin. Similarly, Square has again purchased $170 million worth of Bitcoin after October and now holds a total of around $400 million worth of Bitcoin. Secondly, multiple price models are predicting BTC to have a monstrous 2021.
Plan B, the creator of the controversial bitcoin stock-to-flow (S2F) price model, predicts BTC to reach $100,000 by August 2021. However, do note that the model predicted the price to reach $30,000 by 2020 end, which looks pretty far-fetched.
2. Ethereum - ETH Will Continue to Rule DeFi
The smart contract giants have experienced gains north of 350% starting the year at $125. It is trading at a price of $3,340. However, this could be just the start. 2021 will be a massive year for Ethereum as it consolidates its Ethereum 2.0 upgrade and works on becoming a pure proof-of-stake (PoS) protocol.
However, technical changes aside, the biggest factor behind Ethereum’s valuation will be the booming DeFi sector.
The total value locked (TVL) up in DeFi was around $3 billion in 2019. However, this year, that amount has surpassed $41.50 billion. Despite this rise, the rising gas fees have significantly inhibited the developers from creating sophisticated dApps. Now with the implementation of EIP-1559 in the July London hardfork, these gas fees will be significantly reduced.
DeFi is the most practical use case of blockchain technology and something that can help usher in a bunch of new investors into Ethereum's ecosystem.
3. Ripple - XRP to Get Love from Institutional Investors
As mentioned before, Ripple is primed for institutional adoption in 2021, with FRMO Corp singling it out as one of the more intriguing cryptocurrencies of 2020. Ripple had expanded to more than 300 providers across 40 countries, including Banco Santander (SAN) and American Express (AXP), JP Morgan (JPM), HSBC Holdings (HSBA), HDFC Bank Limited (HDB), and the Bank of America (BAC).
With a market cap of around $70 billion, Ripple is trading at a price above $1.50. As per OMFIF (the Official Monetary and Financial Institutions Forum), Ripple could “position itself as an alternative to SWIFT,” and solve the five major issues of cross-border finance – security, speed, traceability, cost, transparency, and risk management.
The only factor that can affect Ripple’s growth is the security complaint registered by an SEC lawsuit. But currently, the state of law suite is in a limbo state, and there is a good chance that Ripple will gradually bounce back. With increasing adoption, Ripple could potentially see itself ruling the roost in 2021.
4. Litecoin – Faster than Bitcoin
Litecoin has more than doubled in size from the beginning of 2021 having grown from $126 to $350. LTC still has some growing potential. Litecoin has never left its place in the top 10, and it doesn't look like it's going to go down in 2021 either. It is trading at a price around $350.
The launch of LiteBringer – a Litecoin-based RPG fantasy game where each move is a transaction – brought a lot of utility into the protocol. Right after the game's launch, Litecoin transactions skyrocketed, exceeding 130,000.
According to Cryptoground.com, Litecoin price will climb up to $470 by the end of 2024 following the next halving.
Read Also: Litecoin Price Prediction for 2025 and 2030
5. Tezos - XTZ to provide a DeFi alternative
Since the beginning of 2021, Tezos has climbed up from $2.10 to $6.50. Tezos is a smart contract platform like Ethereum, but it utilizes the delegated proof-of-stake (DPoS) algorithm, which allows it to be far more scalable and flexible. This also means that it presents a viable DeFi platform alternative for developers who may not be satisfied with Ethereum. Currently trading at a price of $6.50, Tezos has a market cap of around $4,840,169,660.
Along with speed, Tezos is significantly cheaper than Ethereum. In this November's Delphi upgrade, Tezos managed to reduce smart contract gas fees by 75% to attract developers. The upgrade is “crucial to enable novel applications on Tezos that target areas like DeFi, collectibles, and gaming.” Upon proper implementation, Tezos can leverage DeFi to boost its valuation significantly.
We believe that these five coins have an immense upside for 2021. Before you take the plunge and invest, we request you to do your own research.
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Virtual currencies are highly volatile. Your capital is at risk.