What is the Best Cryptocurrency to Invest in 2021?
Cryptocurrency has stirred up more investor interest than perhaps any other financial asset in history. When Bitcoin first launched in 2009, the nascent digital currency was seen as a potential game-changer in the world of finance and its underlying blockchain technology promised to revolutionise the way transactions were processed.
Whilst digital may not have replaced traditional fiat currency as some industry insiders predicted, its popularity as an asset for trading has grown exponentially in the years since its inception. Bitcoin turned out to be just the tip of the iceberg and going into 2021 there are literally thousands of cryptocurrencies in existence - with more emerging all the time, each one promising to push the capability of blockchain to the next level.
Stories of huge profits being made overnight might be exaggerated, but with the right educational resources and sensible investments, adding cryptocurrency to your trading portfolio for 2021 could prove to be very lucrative.
Maybe you’ve been considering investing in crypto for a while, but weren’t quite sure when was the best time to enter the market or which token was the best to buy.
The following guide will give you a few suggestions for the top cryptocurrency to invest in 2021, as well as a few tips for maximising your chances of success.
Below, we will look over the top seven cryptos that offer good opportunities in 2021.
To help speed up the process, We have reviewed 7 of the best cryptocurrencies on the market and put together a comprehensive list of what to look for as you make your final decision.
What is the best Cryptocurrency to invest in 2021? Where to Invest
If you think about where to invest in 2021, Digital coins might be your best and most profitable option for you. Indeed, the market has more than 5000 different kinds of cryptocurrency, and it might be overwhelming for beginners to make up their minds.
Take a look at these top cryptocurrencies to invest in this year, and start off your 2021 on the right path.
1. Bitcoin - BTC
Bitcoin is the token that started it all. By far widely known cryptocurrency in existence, it is also the biggest in terms of market capitalisation, trading volume, and value. Bursting onto the scene in 2009, Bitcoin introduced the world to blockchain technology. Of course, this illustrious history is all very impressive - but how does it rank amongst cryptocurrencies to invest in 2021?
Often dubbed ‘digital gold’, many investors believe that Bitcoin will actually overtake gold in terms of market capitalisation within a decade. It has indeed seen a meteoric rise in value since its inception, but more recently most of the profits to be made from Bitcoin have been from its volatility as opposed to consistent growth. However, despite a drop in value in March 2020, Bitcoin has since made an impressive recovery and at the time of writing its value is around $44,000. Looking ahead, experts are more or less unanimous in their prediction of future growth.
Given its resilience and continued status as the number one cryptocurrency on the market, experts are forecasting big things for Bitcoin - with many continuing to predict that the token will hit $1 million over the next ten years. Of course, any wild speculation should always be approached with caution, but whoever you ask, 2021 looks to be a good year for the original cryptocurrency.
2. Ethereum - ETH
The emergence of Ethereum in 2015 re-ignited the cryptocurrency trend and was a huge leap forward in demonstrating the all but limitless potential of blockchain technology. Often seen as the second generation of cryptocurrency, Etherum’s market capitalisation was approaching an impressive $128 billion at the time of writing, with the native Ether token valued at $1,145 at the beginning of 2021.
Some traders have touted Ether as the ‘next’ Bitcoin, but it’s important to remember that BTC is still much, much bigger than Ethereum. The latter’s potential growth for 2021 is driven by two main factors. Firstly, cryptocurrency market sentiment, in general, will be directly or indirectly linked to Bitcoin, as the original cryptocurrency is seen as something of an indicator for the wider industry.
The second factor relates to the Ethereum blockchain - which has recently been upgraded with the release of Ethereum 2.0. This multi-staged development seeks to solve problems with the network’s scalability and security and could potentially yield huge gains for Ethereum.
Etheruem therefore should not be seen as an investment alternative to Bitcoin, but rather a complement to a diversified crypto portfolio. Ethereum also experiences more volatility than BTC, so it is a popular currency with day traders. In any case, with the launch of Ethereum 2.0, the future looks bright for the Ether cryptocurrency and it should certainly be a contender for the best cryptocurrency to invest in 2021.
3. Ripple - XRP
Ripple is another major cryptocurrency and one that marks a departure from the focus on decentralisation as a key selling point, as seen with Bitcoin and Ethereum. Ripple actually refers to the company behind the technology, which is comprised of a payment network - Ripplenet - and its proprietary cryptocurrency token, known as XRP. At first glance, this may seem to be at odds with blockchain’s biggest advantage - it’s secure, decentralised nature - but many investors see this as Ripple’s key to success and at the time of writing XRP was the fourth-largest cryptocurrency in terms of market capitalisation, approaching $13 billion.
Ripple has focused on facilitating fast, low-cost transactions, with the aim of appealing to banks and financial institutions looking to make interbank and cross-border transfers. The payments system has already won the support of some major banks, including Spanish multi-national Santander, which certainly lends credibility to the technology’s future potential as a mainstream financial platform.
But is Ripple likely to be a top cryptocurrency heading into 2021? One of XRP’s biggest selling points is the comparatively low cost of the token - around $0.30 at the beginning of 2021. This makes it a great investment for those looking to enter the crypto market without committing a huge amount of capital. Furthermore, the potential for further support from some of the world’s biggest financial institutions, means that Ripple has a potential driver for long-term growth that other cryptos may lack.
4. Bitcoin Cash - BCH
Bitcoin Cash came into being in August 2017 as a result of a hard fork in the Bitcoin blockchain. It was effectively created to address scalability issues with the original cryptocurrency and quickly gained the backing of several prominent cryptocurrency figures and exchanges. As a result, in its relatively short existence, it has already managed to establish itself as one of the biggest cryptocurrencies on the market - consistently within the top ten by market capitalisation, which at the time of writing stood at approximately $9 billion.
The factors driving the value of Bitcoin Cash are similar to those of most other altcoins: awareness from financial institutions, demand and, of course, the correlation to Bitcoin. However, Bitcoin Cash has certain advantages over its predecessor - it is capable of processing transactions much faster and at a lower cost.
Some investors have raised concerns that the speed in which Bitcoin Cash blocks are created belies a less secure system, but the general consensus is that the advantages outweigh the disadvantages in this respect.
The value of Bitcoin Cash has dropped since the beginning of 2020, when it reached a $9 billion market cap and the token was priced around $500. However, this decline means that 2021 could be a good time to consider Bitcoin Cash.
It remains to be seen whether Bitcoin Cash will emerge as amongst the best cryptocurrencies to consider in 2021, but it’s certainly one to keep an eye on.
5. Cardano - ADA
Cardano is relatively new to the crypto scene, having been developed in 2017. But despite being a relative latecomer, this altcoin brings something entirely new to the world of blockchain and has even been dubbed a third-generation cryptocurrency.
What makes Cardano special is that it is the world’s first peer-reviewed blockchain - having had its protocols scrutinised by leading academic minds from various institutions around the world during its development phase. Cardano also has a unique two-layer architecture which will facilitate potential hard forks to occur in the future and improve its long-term scalability, when compared with second-generation cryptocurrencies.
Cardano and its native token ADA were created by ex-Ethereum co-founder Charles Hoskinson - which gives the cryptocurrency a certain pedigree right from the outset. There have also been some prominent industry names making big predictions for Cardano. So what can we expect from Cardano in 2021?
The value of Cardano remains strikingly low, at just $0.16 at the time of writing - an increase on the $0.02 of October 2017 but far short of Cardano’s $1.33 all-time high set in January 2018.
Experts from CoinSwitch, DigitalCoinPrice and CoinFan are all predicting growth for Cardano - but they vary on timescales and the rate of increase. As such, Cordano is worth approaching with caution. It may well emerge as the best cryptocurrency to invest in 2021, but investors should be aware that any substantial price increases could take a little longer to manifest.
6. Litecoin - LTC
Litecoin has famously been dubbed the silver to Bitcoin’s gold. Created in 2011, it was actually modelled on the existing Bitcoin blockchain, with refinements made to the original code to improve scalability and reduce block-creation times. Put simply, Litecoin was created to be a coin that would be more suited to everyday digital transactions than its predecessor.
The formula has certainly shown promise - Litecoin has consistently been amongst the top ten cryptocurrencies in terms of market capitalisation and has shown impressive growth since its launch. Valued at around $150 at the beginning of 2021, Litecoin is still well behind Bitcoin’s token value but the former’s scalability and superior processing speed lend it a huge amount of potential as the world continues to embrace the idea of digital transactions.
As for Litecoin being a top cryptocurrency for 2021, most experts would agree that the altcoin is certainly one to watch. In fact, CoinSwitch has predicted the price of Litecoin could soar to $600 - growth which could well make it the coin to invest in over the next year.
EOS is another major altcoin that effectively took its cue from Ethereum, with a focus on a fast blockchain that can support the development of decentralized applications. EOS developers claim their platform offers a combination of the best features of Bitcoin and Ethereum - air-tight security and programming versatility. In addition, EOS promises to be one of the most scalable cryptocurrencies on the market.
This all sounds very impressive, but naturally, EOS’s potential rests on similar factors to that of all cryptos - including market sentiment towards Bitcoin and the mainstream uptake of blockchain technology. However, the sheer versatility of EOS means there is always interest and the possibility that its value could skyrocket. As it is, EOS has a market capitalisation of around $2.6 billion and is consistently amongst the top-performing cryptocurrencies. xxx
EOS experienced a turbulent first couple of years but 2020 saw it make a strong recovery, with prices fluctuating between a low of $2.43 per token and a high of $5.47. What’s more, despite a shaky start EOS has provided early investors with a 240% ROI - which shows it has some very serious potential as an investment option. As such, EOS should definitely be on your radar as a top cryptocurrency to watch in 2021.
Other points to consider when choosing which crypto to invest in 2021
The cryptocurrency is notoriously fast-paced and influenced by myriad factors, meaning change occurs quickly and frequently. If you are serious about choosing the best cryptocurrency to invest in 2021, then you’ll of course need to familiarise yourself with the main contenders. However, there are also a few more general things to consider when planning your investments.
1. Look to the Market
The cryptocurrency market’s volatility is what makes it such a good opportunity for traders and investors, but volatility also carries an inherent degree of risk. Before appraising the potential of an individual token, you should always consider that coin’s market.
As we have already mentioned, Bitcoin is often a key indicator of market sentiment in general and this can often be a good place to start. But you must also look at how a coin’s price has been moving over the course of recent months and source some reliable technical analysis to see how it is projected to move in future.
Of course, looking at the market is just one aspect - it can only tell you so much and any savvy investor should cross-reference their findings with other information streams to identify the best cryptos to invest in 2021.
2. What does the project offer?
As you will have inferred from this article, each cryptocurrency offers to bring something different to the market. Whenever a new project comes into the cryptocurrency space, there is inevitably a lot of hype - this in itself can lead to investment opportunities of course, but it’s important to identify which of these projects that can offer sustainable gains.
The cryptocurrencies to invest are those with a provable track record, showing good price movement over at least 2 years and ideally having partnerships or endorsements from well-established, non-crypto institutions.
3. Consider the Source of your information
When you’re looking for cryptocurrencies to invest in 2021 - or any financial asset for that matter - then information is your greatest ally.
Anyone familiar with cryptocurrency and blockchain will know that there tends to be a great deal of hype and speculation surrounding the technology - with developers making some pretty ambitious claims about their systems. Whilst this can be an important consideration when looking at a token’s potential for growth, it’s important to diversify your research materials to make sure you have the latest, unbiased information.
4. Looking ahead
There are several cryptocurrencies which could be poised for big things if they continue to break through into mainstream use - especially those endorsed by established banks and financial institutions.
The potential applications of blockchain make the crypto-sphere an exciting investment opportunity so it’s important to always be considering a long-term strategy. As new generations of crypto seek to solve the technology’s shortcomings, the chance of them becoming used as a genuine alternative for everyday transactions increases. A top cryptocurrency will always be that which can appeal to the mainstream industries on some level.
How to invest in cryptocurrency in 2021
Today there are more opportunities to trade and invest in financial assets than ever before and cryptocurrency has demonstrated huge appeal to both experienced and novice investors. If you’re serious about finding cryptocurrencies to invest in 2021, then you’ll need to find a platform that gives you access to the markets.
Fortunately, there is no shortage of reputable trading platforms that allow you to buy and sell cryptocurrencies at the touch of a button. The availability of popular retail brokerage services like eToro means there has never been an easier time to start investing in crypto.
Once you’ve identified your picks for the best cryptos to invest in 2021, then you’ll need to open one such trading account. In most cases, this takes a few moments and you’ll be ready to make trades almost right away. In addition to offering crypto trading, most of the top brokerage platforms will also offer plenty of analytics and market information, so be sure to use all the tools at your disposal.
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Virtual currencies are highly volatile. Your capital is at risk.
Tips for successful investing
Ultimately, investing in cryptocurrency bears many similarities with any other financial asset, be it forex, stocks or indices. It will therefore be of little surprise that many of the tools traditional investors use to maximise returns are also applicable to anyone looking to trade cryptocurrencies.
One of the most widely utilised tools is margin trading. This is effectively borrowing funds from a brokerage firm to enter a trading position, using funds already in your brokerage account as collateral. Not only does margin trading allow investors to profit whether the market goes up or down, but it also allows a trader to get much more market exposure and amplify potential returns. Most brokers will offer margin accounts, but the margin multiplier could vary depending on the type of account you open.
Novice traders should be aware, however, that using leverage on a margin account can also amplify potential losses. If your trade starts going the wrong way, a margin call may require your broker to close the position without prior consent.
Investing in any of these cryptocurrencies in 2021 is an idea worth considering, the potential is promising for all of them to a different extent.
Cryptocurrencies remain a major opportunity for committed investors and by approaching the market with an open, analytical mind, there’s no reason why the top cryptocurrency picks can’t yield fantastic returns in the year ahead.
To summarise, here are a few points to remember for choosing the top cryptos in 2021:
- 2021 presents big opportunities to invest in cryptocurrencies in 2021
- Bitcoin remains among the top cryptocurrencies to invest in 2021, with some forecasting that prices will hit $120,000
- The growth of decentralized finance is driving interest in cryptos such as Ethereum and Ripple
- It’s worth investing time developing a strategy based on your objectives
- Experienced traders should consider leveraged trading as a way to maximise returns
- Some tokens are better suited to long-term investment strategies
- Look out for potential partnerships between cryptocurrencies and established financial players
- Short-term cryptocurrency strategies centre around faster trades, profiting from rapid price fluctuations
Is it a good idea to invest in Cryptocurrency in 2021?
Many industry figures are expecting a strong year for cryptocurrencies in 2021 - in fact, some believe it could be the best year yet. However, the nature of the asset means there is always risk involved with investing and profit is by no means guaranteed. You can however improve your chances by carefully researching the top cryptocurrencies to invest in 2021.
How to find the best cryptocurrencies to invest in?
When looking for the best cryptocurrencies to invest in information is king. The more analyses and market data you can find, the better. Cryptocurrency presents an exciting investment opportunity but it’s crucial you carry out due diligence on any cryptocurrencies that are of interest to you.
Is Bitcoin still a top cryptocurrency to invest in 2021?
Bitcoin has so much mainstream notoriety that the word is often seen as a synonym for cryptocurrency. However, despite its being by far the biggest token on the market, many experts predict major growth ahead for the original cryptocurrency. Of course, predictions vary in scope, but some have speculated that the price of Bitcoin could hit $120,000 in 2021. As such, it is still a top cryptocurrency for any portfolio.
Where can I trade cryptocurrencies?
If you are new to cryptocurrency trading, then you’ll need to find a broker or exchange that will allow you to enter the markets. We recommend eToro for novice investors, as it offers plenty of learning tools as well as a CopyTrader feature allowing you to observe pro traders investors and copy their strategies automatically.
What is the best cryptocurrency to invest in 2021?
There are several coins vying for the title of the best cryptocurrency to invest in 2021. Bitcoin, Ripple, Litecoin and Etheruem, for example, are all set for potential growth. However, the key to a successful portfolio is diversification - so it's better to find the top cryptos to invest in, rather than peg your hopes on a single token.