Planning to buy the hottest cryptocurrencies? With more than 7000 digital assets, choosing the best to invest in is not an easy task. Fear not, we at Trading Education have put a list together of the hottest 5 cryptocurrencies to invest in today!
The cryptocurrency market is seeing some crazy moves recently and we’re taking a look at the hottest cryptocurrencies to consider.
This makes the current correction a perfect opportunity to get into hot cryptos that have the potential for exponential growth. Most of the crypto assets that hold potential for huge gains are driven by a combination of strong technical features, hype, and staking.
Despite its volatility, the crypto market offers lots of opportunities to investors. Over the last 5 months, there are hot cryptos that have gained by over 1000% and created instant millionaires. The best part is that the opportunity to make money in this market still exists. You just need to know where to look.
With that quick primer out of the way, let’s take a look at hot cryptocurrencies that are performing the best.
5 Hot Cryptocurrencies Today
What Are The Top 5 Hottest Cryptocurrencies to Buy Today?
Here’s a look at the 5 Hot Cryptocurrencies to watch Today:
Ethereum, like the rest of the market, is dumping today. However, this has little to do with its fundamentals. If anything, this crypto’s fundamentals are getting stronger. Several factors make Ethereum a hot crypto despite the dump.
a) Ethereum ETFs in the U.S
The U.S is the largest financial services market in the world. This may explain why despite multiple crypto ETFs launching worldwide, all eyes are locked on the U.S. In 2018/19, several mini rallies and dumps resulted from hopes of a crypto ETF in the U.S. While the U.S has been reluctant to approve ETFs, things could be taking a turn for the better.
A month, the U.S senate approved Gary Gensler, a pro-crypto person as the SEC’s chairman. His appointment was welcomed by everyone in crypto, including by Ripple co-founder Brad Garlinghouse, who is locked in a court battle with the SEC. If Gensler’s reception is anything to go by, then crypto ETFs could become a reality in the U.S soon enough. One pointer to this is VanECK filing for an Ethereum ETF with the SEC.
If approved, the ETF would be a game-changer for Ethereum in terms of demand. That’s because most institutional players prefer investing in crypto through ETFs. A key added advantage to Ethereum’s demand would be the fact that Ethereum’s ETFs will be physically settled, a factor that would play against short sellers.
b) DeFi is growing
The current market crash coupled with the recent NFT-mania may have taken the spotlight away from DeFi. However, that’s not to say that DeFi is not doing well. If the total value locked metrics are anything to go by, then DeFi is on an exponential growth path. As per data from DeFi Pulse, the total amount of USD locked in DeFi has grown from a little over $900 million a year ago to $74.89 billion presently.
Here is the best part, all the top 100 DeFi projects by value locked run on Ethereum. Simply put, Ethereum is the king of DeFi, and as the space grows, this will reflect in its price. To give you an idea of the potential that DeFi holds, billionaires Alan Howard and Peter Thiel recently announced that they were backing a $10 billion exchange focused on DeFi. This is set to open up the market in a big way and makes Ethereum quite hot at current prices.
c) Ethereum 2.0 is here
Ethereum is in the process of a transition from a Proof-of-Work algorithm to Proof-of-Stake. Already billions of dollars in ETH have been staked. The shift will make Ethereum environmentally friendly, and it’s a big deal. The environment is such an essential factor, and is the reason Bitcoin is getting bashed by the likes of Elon Musk at the moment.
It is also noteworthy that the shift to Ethereum 2.0 will help deal with the scaling issues that have plagued Ethereum to date. Once the change is complete, Ethereum could easily vanquish all other platform blockchains by virtue of its network effect.
Read Also: Why This Is the Best Time to Buy Ethereum
Dogecoin is getting a lot of positive rap currently, and it’s all thanks to Elon Musk. While he is just one man, Musk has singlehandedly pumped up Dogecoin from a few pennies to a high of over $0.71. Musk’s influence is relatively huge on the entire crypto market. As such, his love for Dogecoin is a positive factor for the crypto.
The sway that he has is evident in the price action today. After his negative tweets about Bitcoin, the whole market crashed, with Bitcoin testing lows of $42k. The average market crash has been 10%. One would expect inflationary crypto like Dogecoin to dump even harder in such a scenario, but it hasn’t. If anything, Dogecoin has only dropped by about 7% and seems to be recovering some of its earlier losses.
The people’s crypto
Besides hyping up Dogecoin for some time now, Elon Musk has now nicknamed himself the father of Doge. In a series of tweets, the Billionaire has stated that Dogecoin is the people’s crypto. He has even gone ahead to suggest several upgrades that would make Dogecoin overtake Bitcoin.
The billionaire is explicitly calling for a 100X increase in block times and a 100X increase in block size. This would make Dogecoin super-fast and extremely cheap for everyday transactions. It would make the crypto an everyday currency that can compete effectively with centralized currencies and payment systems. Musk has also praised Dogecoin for being multiple times more energy-efficient than Bitcoin. All this comes a few days after reports that SpaceX would fund its moon mission using Dogecoin.
The implications of all this are quite huge. First, it puts a lot of legitimacy in Dogecoin. Dogecoin has been around for a long time, but it was always perceived as more of a joke than an investment. This perception is changing, and a lot more people are now taking Dogecoin seriously as an investment. This is evident in its price action even as the market dumps. What this means is that once the markets stabilize, this is one of the cryptos that could experience a significant bullish momentum.
The real catch for Dogecoin would be if SpaceX uses Dogecoin to fund its moon mission. The buying pressure it would create would be astronomical for Dogecoin, both before and during the mission. The news media would be all about Dogecoin.
Besides that speculative hype, Elon Musk has managed to bring the Dogecoin developer team back. If the changes he is proposing are actualized, this would be a game-changer for this crypto. That’s because mass adoption would be the next big step.
As it is, Dogecoin is one of the fastest cryptos to transact in and also one of the cheapest. Making it even faster while lowering the cost would see its use-value grow. It could be one of the few cryptos that gain real-world usage that transcends hype and speculation. That’s huge!
3. Energy Web
Energy web may not have gained much in the recent crypto rally, but it has the potential to explode pretty soon. That’s because the project is working on staking, enabling investors to earn a passive income off this token. From the way its staking is structured, staking energy web could be more profitable than many other cryptocurrencies.
This could drive demand as investors take advantage of its relatively stable prices to earn a passive income. For context, most projects that have introduced staking have gained quit significantly all through the recent bull market. By providing a new avenue for gains, Energy web will be huge.
How will Energy Web staking work?
The first step will be the activation of utility nodes. The role of these nodes will be to deliver core services that are essential to energy consumers and the companies that will be using Energy web services. Some of the services that these nodes will offer include decentralized key management and communication with developers. It is important to note that these nodes will be separate from the chain validators.
Once these are setup, the second step will be the utility nodes. These nodes will have to stake EWT tokens for them to be active. By staking EWT tokens, these nodes will have an incentive to keep the network running as it is supposed to. That’s because Energy web will use slashing as a way to incentivize network efficiency. When the staking agent does not do what is required of them, then slashing gets activated.
The energy web is open for all investors to take part in utility node staking or staking EWT tokens to keep the network decentralized. All that is need KYC, and pretty much anyone can become a node validator for Energy Web.
The best part about staking EWT is that there is a huge incentive to ensure that the network is running smoothly at all times. The more efficient a node is, the more the returns. In the initial stages once staking goes live, the rewards will come from the community fund. However, in the long run, as usage grows, the staking rewards will come from those using Energy web for various business-related purposes.
It is also noteworthy that staking Energy web will be pretty easy. The interface for it is already developed, and anyone with basic crypto knowledge can do it. There are also plans to integrate the staking system to exchanges for even easier staking. It’s a big deal, and could see Energy web explode in value once it goes live.
Besides the staking aspect of it, there is a lot of attention on renewable energies lately. This is one of the reasons why Bitcoin has corrected so heavily after Elon Musk touched on how energy inefficient it was. Major economies are also shifting towards renewables, with the U.S hoping to become carbon neutral by the year 2030. All this plays into EWT’s advantage since it is a decentralized market place for environmentally-friendly energy.
Cardano has been pumping recently. Besides the market-wide momentum that is pushing up the entire market, this project has a lot going for it.
a) DeFi on Cardano
DeFi is huge and is the main reason behind the explosion in value of Ethereum. Cardano too could soon be joining the DeFi bandwagon all thanks to Ergo. Recently, Charles Hoskinson did a video stating that they were collaborating with Ergo to create a Cardano DeFi oracle. Charles stated that Ergo had a DEX already and was looking to launching a stable coin on Cardano. This is already creating excitement in the Cardano community, and as Ergo comes up with more ideas, investor interest in Cardano will rise.
b) Energy consumption is becoming an issue in crypto
A few years ago, any talk of Proof-of-Work mining being unsustainable was dismissed as inconsequential. This is no longer the case. Several influential voices in crypto are now voicing their concerns. The most prominent one being Elon Musk. Musk has discontinued the use of Bitcoin for payments citing its unsustainable energy usage. In one of his tweets that have tanked the market, Elon Musk has noted that it doesn’t look so good on Bitcoin when mining operations are affected when a coal mine closes in China.
Besides Elon Musk and his antics, the world is increasing, pushing towards clean energy, and energy efficiency. This has a lot to do with growing awareness of climate change and its dangers to the world. As this issue becomes more pronounced, energy-efficient cryptos stand to gain the most.
Cardano happens to be one of the most energy-efficient cryptocurrencies in the market. As per Forbes data on annual energy consumption in TWh per year, the global banking system consumes about 263.72 TWh per year. Bitcoin consumes about 113.89 TWh in the crypto space, while Cardano, which runs on Proof-of-Stake, uses about 0.006 TWh per year. This makes Cardano one of the most environmentally friendly cryptocurrencies in the market. It is quite literally a crypto of the future.
c) Cardano staking
Staking has been gaining traction in crypto lately. The incentive comes from the passive income that comes with it. Cardano is one of those cryptos that have benefited immensely from staking. Cardano staking is only likely to get bigger over time, and for a good reason. The percentage gains are reasonable, ranging from 6% to 10%, while still enjoying gains from the value appreciation of ADA.
Then there is the fact that Cardano has a very low requirement on how much one can stake. You can literally stake as low as 1 ADA. This is incomparable to something like Ethereum, where one needs to stake 32 ETH worth thousands of dollars at current prices. This is a factor that could keep adding to the demand pressure of Cardano going into the future. It makes it one of the hot cryptos to watch not just in 2021 but for years to come.
Polkadot has been hot for a while now. In just a year, it has jumped from under $5 to over $40. Going forward, Polkadot will remain one of the hottest cryptocurrencies to watch, one that could easily double or triple its current price. There are a couple of factors that play into DOT’s favor.
a) It is backed by top brains in crypto
Polkadot is the brainchild of Gavin Wood, one of the founders of Ethereum. Gavin is not just some random guy with the title of Ethereum co-founder, he is the one that created Solidity. This is the programming language that powers smart contracts on the Ethereum network.
b) A massive developer team
Polkadot happens to have one of the largest and active developer networks in the crypto space. When compared to Ethereum in its early days, Polkadot has multiple times more developers. This is important because it guarantees stability and continuous innovations on the network.
All the above-mentioned reasons have a bearing on Polkadot’s long-term value. However, what makes it really hot at the moment is staking. Polkadot has become a favourite for many looking to earn a passive income with its fast-rising price.
With the number of those staking ever on the rise, the buying pressure will positively impact this crypto’s price going forward. Ethereum’s almost impossible 32 ETH staking minimum could draw more staking investors into cryptos like DOT in the near term.
Don't Miss: Polkadot Price Predictions
All the above hot cryptos are likely to do well this year. They have the fundamentals backing them up. One thing that makes them stand out is technical superiority and more money flowing into the market.
Ethereum is working on becoming more energy-efficient and scalable. Cardano already has this and is capitalizing on staking to draw investments. The same goes for Polkadot and Energy Web.
These hot crypto assets are drawing in millions of dollars worth of investments from people looking to earn a passive return in the crypto market. On its part, Dogecoin is likely to keep making waves as Elon Musk takes it more seriously, including suggesting upgrades to the protocol.
However, it is important to note that cryptocurrencies are very volatile assets. As such, even when investing in hot cryptos, it is best to take a cautious approach and only put in what you can afford to lose.
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