Cryptocurrencies To Invest In 2021
Is Bitcoin still worth investing in, or is it too late now to invest in Bitcoin?
Some crypto industry experts throw around predictions for Bitcoin of $500,000 or $1,000,000, but in reality, is that plain crazy? Should you invest in Bitcoin, or are there lower-priced cryptocurrencies that could, one day, become the next big cryptocurrency to make you a millionaire?
Today, Bitcoin is $40,000, which is a high price ticket by anyone's standards. You may be glad to know that Bitcoin isn't on our list today for the best cryptos to invest in 2021.
So, what is the next big cryptocurrency? Could there be another Bitcoin?
We don't have a crystal ball to predict the best cryptos for long term investment. Neither do we have the psychic powers to predict the best cryptos for short-term investment. But we will discuss the best cryptos for investment in 2021.
Bitcoin first appeared in 2009, and you could have purchased BTC for less than a dollar. At its highest in May 2021, BTC/USD was $64,000. Now, people are searching for the next big thing like Bitcoin. It happened once, well twice, so it could happen again, right? That's the thinking for the next generation of crypto investors. Everyone wants to find low-cost crypto that could make millions.
Nobody could have predicted that cryptocurrencies would become so popular for trading and investing. A decade or so later, there are over 10,000 listed cryptocurrencies. How do you know the best cryptocurrencies for investment? The crypto market accounts for $1.3 trillion, so the opportunities to profit from investing in cryptocurrencies are plentiful.
How do investors choose from the different specialities offered by each crypto, all with unique utilities, innovation and scalability? The objective for investing in cryptos is to find coins with growth potential, and it will be from this base that we select the top seven cryptos to invest in for 2021.
In this guide for the best crypto assets for investment in 2021, we look closely at what makes crypto worthy of investment. You will learn how to choose cryptocurrencies for investment with a checklist and give yourself more chances of becoming a crypto millionaire.
In conclusion, you will know how to find cryptocurrencies for investing and have a clear plan for how and when to profit from investing in cryptocurrencies. If you want to build a long-term crypto portfolio, you may find one or more attractive coins on the list of the seven best cryptos for investment.
If you want to dive into the crypto market quickly and easily, with 0% commission, check out eToro Exchange!
- What Makes Cryptos Good for Investment?
- The Top 7 Cryptocurrencies for Investment in 2021
- Recap of Cryptos To Invest in 2021
What Makes Cryptos Good for Investment?
Just because a cryptocurrency is cheap doesn't mean it is a good investment. Some cryptos haven't moved from the price they started. Investing in cryptocurrencies is not dissimilar to investing in stocks because you still have to do sufficient research to determine a good investment.
We are on third-generation cryptos now. Many people believe that Bitcoin is the crypto to make them rich because they are looking at it purely from making money.
This belief is primarily based on history because Bitcoin has made many people rich. But it's not a good enough reason to start ploughing $40k per coin into Bitcoin, dreaming of the time when Bitcoin reaches the crypto expert predicted price of $500,000.
Bitcoin is a first-generation cryptocurrency. It works on proof of work (PoW) consensus, requiring miners to solve highly complex hash problems to earn BTC rewards. Even now, twelve years later, Bitcoin transactions are tediously slow and costly, and mining Bitcoin is energy-intensive and expensive.
Emerging third-generation cryptocurrencies will undoubtedly challenge Bitcoin's #1 position at the helm. It may take time, but as fourth-generation cryptos come onto the market, they have learned the lessons from past generation challenges and set up from the get-go to enable infinite scalability.
Before investing in cryptocurrency, run the below checklist as a rule before you spend your money.
This list may help you to find the next crypto to explode in 2021.
- Scalability – each generation of crypto advances technology. To maximise growth potential, the crypto you choose for investment must have scalability.
- Community – some crypto projects have huge followings. Followers get behind crypto and support the token even during difficult periods.
- The founders and Team – how experienced are the founders? Have they worked within the cryptocurrency industry before? Are they vocal on social media, and if so, are they focused on increasing trust and belief in their project? Or are they ego led and negatively outspoken?
- Utility – how is the specific crypto project better than others? Is the technology disruptive, and can other blockchains use it? Is it proof of work (PoW) or proof of stake (PoS) consensus? PoW relies on miners to secure the network, but PoS depends on people buying a stake in the crypto. Anyone can buy a stake and receive rewards which makes PoS consensus cryptos attractive to the small investor
- Vision - Is there a vision for the cryptocurrency, and if so, is the journey to that goal transparent? A crypto network with a vision prepares for future growth and has a plan for overcoming challenges. A vision culture encourages innovation within a team
The list is common sense but doesn't overlook the importance of doing your homework for investing in cryptocurrencies.
Not on the list, but equally as important, is to check the media for news about cryptocurrency. Uncertainty causes price drops, and innovation increases prices. So stay updated on current cryptocurrency news.
The Top 7 Cryptocurrencies for Investment in 2021
The following is a list of the best cryptocurrencies for investments in 2021 that are expected to deliver high returns and make an even bigger impact in the years to come.
- Ethereum (ETH)
- Binance Coin (BNB)
- Cardano (ADA)
- Ripple (XRP)
- Dogecoin (DOGE)
- Polkadot (DOT)
- Uniswap (UNI)
Ethereum is in the process of the Ethereum 2.0 upgrade from PoW consensus to PoS consensus. On completion, transaction speeds increase significantly, and the Ethereum network no longer needs miners to validate transactions and secure the network.
Crypto industry experts predict that Ethereum could rise to $20,000 by 2025. Today's price of $2,600 is an increase from a recent drop to $1680. In May 2021, the price of Ethereum reached $4,300. But the crypto market plummeted with declines of more than 50% across most cryptocurrencies.
At the high of $4,300, Ethereum grew 1,500% in a year. Compared to less than 300% for Bitcoin, Ethereum's rise was significant.
Much rides on the completion of the ETH2 upgrade. After completing the first phase (the Beacon chain) in December 2020, followers could stake Ethereum for ETH reward tokens of up to 6%. But you cannot access your ETH stake or rewards until after the next phase of the ETH2 upgrade.
Ethereum has a massive community of loyal followers, and as a project, the growth potential for Ethereum 2.0 is significant.
The London Upgrade happens this week, which reforms transaction fees and how gas fees are calculated. One issue with Ethereum has been the high gas fees.
Checklist for Ethereum:
- Scalability – Yes – the upgrade massively improves the Ethereum Network
- Community – Yes, Ethereum has a significant community
- Founders & Team – A strong team with transparency. The Ethereum website updates information regularly
- Utility – Transactions per second increase to 100,000 with ETH2. Smart contracts functionality
- Vision – Yes. The Ethereum network appears to be looking to the future, with an eye on the #1 spot by market cap
Why Invest in Ethereum?
Ethereum is one of the most expensive price point in the list of top cryptos for investment. If you have sufficient funding, adding Ethereum to your investment portfolio can form part of a solid plan for profiting from cryptocurrencies.
Binance Coin (BNB)
Binance started as a utility token in 2017, used for discounts on trading fees.
Now, uses for BNB range across transaction fees on the Binance exchange, entertainment, financial services, travel bookings and other online services.
Checklist for Binance Coin:
- Scalability – Binance are the world's largest cryptocurrency exchange and focus on driving forward development for the future
- Community – Binance have a large following across many social media platforms
- Founders & Team – the founder Changpeng Zhao has actively been involved with blockchain technology since 2013
- Utility – BNB is a viable vehicle for the growth of crypto trading and investing
- Vision – Yes, with considerable success, Binance continue to look to the future of cryptocurrencies
Why Invest in Binance Coin?
Interest is undoubtedly growing exponentially for cryptocurrencies. Traders locate the Binance exchange to buy and trade cryptocurrencies and use the BNB coin. Binance coin has the second-highest price point, and at #4 listed crypto, it has made significant headway. If the price point is within your risk tolerance for investing in cryptocurrencies, adding Binance Coin BNB could be an option for your crypto portfolio.
Cardano is third-generation crypto and was the first to launch a proof of stake (PoS) consensus. Cardano focused on scalability from the offset, intending to become the best platform for smart contract technology.
Ignore the low market price because Cardano rapidly established their market position at #5. Cardano is likely to increase the market cap.
When many cryptos prices were falling, Cardano prices held steady. At the high of $2.47 in May, the price drifted below 50% but less dramatically than many other cryptos.
Over the last year, Cardano experienced 2,000% growth.
Checklist for Cardano:
- Scalability – Cardano has excellent scalability. The network has endeavoured to pre-empt the future of Cardano by considering all the potential implications for decentralised currencies
- Community – Cardano has a strong community with a loyal following. Many people believe in the future of Cardano
- Founders & Team – Charles Hoskinson was co-founder of Ethereum. He has a strong, experienced team supporting him at Cardano
- Utility – yes, Cardano is a proof of stake (PoS) open-source project with the intent to create a more secure, transparent and fair society
- Vision – Cardano is working on a Decentralised Autonomous Organisation (DAO), which means they would be like the crypto equivalent of Amazon Web Services, becoming a platform for other cryptocurrencies
Recently, Cardano released a paper indicating a possible upgrade to HYDRA, a two scaling solution that would enable 1,000,000 transactions per second (tps). HYDRA would be a total game-changer for Cardano.
Why Invest in Cardano?
Cardano has undisputedly earned its place as the #5 listed cryptocurrency. They have the vision for disruptive technology, innovation and desire to be the crypto version of Amazon Web Services.
The price point of ADA at $1.36 is within anyone's budget.
You may ask, 'what is the price prediction for Cardano?' The crypto expert forecast was $2 by 2023, but the high for Cardano in May 2021 was $2.47.
If Cardano introduces HYDRA, this crypto could take giant leaps ahead of higher listed cryptos, including Ethereum. Cardano could be the next cryptocurrency to explode.
Ripple is a little more complicated to understand than the other cryptos on this list.
XRP is a digital currency that runs on RippleNet, which is a digital payment platform. RippleNet is on top of XRP Ledger, which is a distributed ledger database.
The company Ripple runs RippleNet, but the XRP ledger is not based on blockchain and is open-source. RippleNet is a payment platform enabling instant global monetary payments. XRP is the native cryptocurrency to the XRP Ledger, but you can transact on the platform with any currency.
The objective for XRP was to provide fast, lower cost and more scalable alternatives to other digital assets and existing monetary (non-crypto) platforms such as SWIFT.
The XRP ledger is fast, processing transactions every 3-5 seconds when independent Ripple validators validate the XRP transactions. The global XRP Community maintains the ledger.
Ripple has been the subject of some controversy for the last seven months, with a lawsuit filed in December 2020 by the SEC (Securities and Exchange Commission). The SEC is attempting to ascertain that XRP is not a decentralised currency. They are suggesting that Ripple sold unregistered securities.
The SEC case weakened a few weeks ago when two out of the five SEC Commissioners acknowledged a lack of clarity regarding the regulatory status of digital assets. In a document, Hester Peirce and Elad L. Roisman, SEC commissioners, stated that "the only certainty we see is that people have questions about how to comply with the applicable laws and regulations."
The ongoing case has cast a shadow over XRP since the lawsuit started. But, it's looking increasingly as if the SEC is clutching at straws and are unlikely to win the case. For the last week or so, XRP prices have seen some movement and, if the case concludes in Ripple's favour, a favourable increase in the XRP price would hopefully follow.
Checklist for XRP:
- Scalability – Yes
- Community – Yes, XRP Chat is a large forum for all things Ripple and XRP and the Interledger protocol
- Founders & Team – Ripple was released in 2012 and co-founded and developed by Chris Larsen, Jed McCaleb and Arthur Britto
- Utility – Yes, Ripple provide an essential service for fast, low-cost transactions
- Vision – The company vision is to unlock the power of blockchain, create an inclusive financial system and accelerate the Internet of value
Why invest in XRP?
If you are considering adding Ripple to your crypto portfolio, it might be best to wait until the SEC case is successfully closed in Ripple's favour. When it does, the price of Ripple could see more movement. If you buy XRP, consider it as a long-term investment.
Dogecoin began in 2013 as a joke, an internet meme with the logo of a Shibu Inu (a Japanese dog). For the last eight years, Dogecoin prices have made little to no progress. But, over this last year, DOGE increased by 15,000%, hitting a high of $0.64 in May 2021.
Price gains may have increased due to Elon Musk expressing interest and belief in DOGE. But since the high of May, the price of DOGE dropped over two-thirds and has struggled to get beyond $0.19
Primarily, Dogecoin rewards content creators for sharing content. It's a helpful peer to peer service as most creators pay high content sharing fees on centralised platforms.
Cryptocurrencies are sensitive to media coverage. In Mid July, the founder of Dogecoin, Jackson Palmer, had an online rant about the crypto industry. He intimated that it was all a big con to make the fat cats rich and the multiple millions of crypto minions part with their money. Unsurprisingly, DOGE prices fell following Palmer's outburst and may account for the lack of DOGE momentum.
We are adding Dogecoin to the list because, despite the recent inactivity, crypto industry experts suggest that the price of DOGE could rise as high as $1, and Dogecoin still has a loyal following. Plus, even though Dogecoin is a proof of work (PoW) consensus, you can join a Dogecoin community and receive DOGE rewards. This latter incentive is what has perhaps held DOGE from dropping off the crypto radar.
Checklist for Dogecoin:
- Scalability – Yes, but not as much as other cryptos on the list of the seven best cryptos for investment
- Community – Dogecoin has a loyal following, with many believing in the future of DOGE
- Founders & Team – Jackson Palmer did a great job until his online tantrum. Hopefully, Dogecoin can recalibrate and gain momentum again
- Utility – Dogecoin provides a helpful service to the entertainment community
- Vision – We're unsure of the founder's vision for Dogecoin, so this is a failing in the Dogecoin checklist
Why invest in Dogecoin?
Why invest in a coin that started as an internet joke and has a founder that states he hates cryptocurrencies? Dogecoin has a loyal following and provides a valuable utility. DOGE clawed its way to the #8 listed coin and hit exceptional highs of $0.64 in May 2021.
Some crypto industry experts are predicting that DOGE could rise to $1.
The price of DOGE has held under $0.20 for several months, so there is uncertainty in the crypto markets. As an investment project, it could be worth buying Dogecoin at the current low price.
Gavin Wood (former co-founder and CTO of the Ethereum Network) founded Polkadot in 2016. Polkadot has a unique, open-source, sharding multichain protocol. The technology allows other blockchains to interlink operations by creating parallel chains from bonding.
You don't need to understand the technology to know that Polkadot has incredible utility and scalability. Polkadot have addressed most of the issues that plagued earlier cryptocurrencies.
Polkadot can facilitate cross-chain transfers of an asset or data type, not only crypto tokens. This technology is unique to Polkadot.
Polkadot is a flagship project by the Swiss Web3 Foundation. The mission of the foundation is to 'facilitate a fully functional and user-friendly decentralised web.' The Web3 Foundation support for the development of Polkadot is unrivalled and will likely add further to positioning Polkadot above and beyond most cryptocurrencies.
What makes Polkadot so different?
- Governance – Polkadot token holders have absolute control over the protocol. All privileges are given to DOT token holders
- Staking – game theory incentivises DOT token holders, encouraging honesty. To secure the Polkadot network, good actors receive rewards, and bad actors lose their stakes
- Bonding – new parachains are added by bonding tokens. Any tokens out of date or no longer useful are removed
The Web3 Foundation is a Swiss foundation focused on building Polkadot by developing the services and applications. Top-class researchers, developers and partners are partnering to create 'a superlative realisation of Web3', and Polkadot is at the core of development.
The Web3 Foundation also provides grants for developing the ecosystem.
Checklist for Polkadot:
- Scalability – unprecedented and with the support of the Web3 Foundation, scalability is assured
- Community – Polkadot has a loyal and growing community across multiple social media platforms
- Founders & Team – An impressive team put together by the Web3 Foundation
- Utility – true interoperability
- Vision – innovative, with a vast vision for the future of Polkadot unique technology
Why invest in Polkadot?
As the #9 listed cryptocurrency, Polkadot has growth potential. It's still low-priced at $18 and meets all of the criteria for the pre-investment checklist
Polkadot technology and utility are unique, and with the Web3 Foundation invested in the project, the future could be one to watch for Polkadot. The low price point is attractive for crypto investors.
Polkadot could be the next big thing for cryptocurrencies.
Uniswap is a unique decentralised trading protocol that provides guaranteed liquidity for hundreds of Ethereum applications and facilitates automated and efficient trading of DeFi tokens for millions of users.
Uniswap launched the UNI token in late 2020.
The creator of the Uniswap platform is Hayden Adams, an Ethereum developer. The idea of Uniswap was to introduce AMMs (automated market makers) on Ethereum to a much broader audience. Adams work was overseen by Vitalik Buterin, the creator of Ethereum.
Uniswap aims to solve issues of liquidity that other platforms experience. Lack of liquidity can be a real issue in trading, so guaranteed liquidity reduces risk and increases activity, contributing to the volume, a win-win situation.
Checklist for Uniswap:
- Scalability – yes, Uniswap has infinite scope for further development
- Community – Uniswap has a good following across Discord, Twitter and Reddit social media platforms
- Founders & Team – Hayden Adams is an Ethereum developer, so the foundation for Uniswap is strong
- Utility – Uniswap provide an essential service to the cryptocurrency market
- Vision – Yes, Uniswap are focused on future development
Why invest in Uniswap?
Demand for liquidity is a constant for cryptocurrencies, so Uniswap has actual utility. $22 is affordable for most crypto investors and is a good token to add to your portfolio.
Recap of Crypto Assets to Invest in 2021
From Ethereum to Dogecoin, the choice for investing in cryptocurrencies is dependent on budget, risk tolerance, and if the crypto passes the checklist.
- Founders & Team
The crypto market shifted considerably after the epic rise of Bitcoin in 2017.
Everyone now wants to know how to become a crypto millionaire.
Investing in cryptocurrencies is not dissimilar to investing in stocks. With both financial instruments, you need a reason to buy. Buying a cryptocurrency because you hope the price rises is not a good enough reason.
When buying a cryptocurrency for investment, it's like buying a fancy car. It's all very well looking fancy, but if the steering doesn't work and the engine is faulty, the vehicle is worthless because its' not fit for purpose.
It may seem strange talking about crypto being fit for a purpose. But, in real terms, the price of Bitcoin wasn't based on utility because Bitcoin is a sluggish dinosaur compared to third-generation cryptos.
The Bitcoin boom was based on fear and greed.
Ultimately, if specific crypto has a unique and valuable purpose, the price will rise—the same as with stock investments. If a company experiences growth, innovation and development, the stock rises.
XRP and DOGE are speculative investments for different reasons but are still worth following for future updates. Ethereum is high ticket crypto, and Polkadot is unique. Cardano could be a crypto leader, and both Binance Coin and Uniswap have infinite potential as valuable utility.
There are no guarantees for profiting from investing in cryptocurrencies. It's advisable only to risk what you can comfortably afford to lose.
Please note that the above information is not providing advice on tax, investment, or financial services. We provide the above information without consideration for risk tolerance and a specific investor's financial circumstances.
Trading or investing in financial instruments such as cryptos may not be suitable for all investors. It does involve risk and the possibility of a loss of capital.
eToro – The Best Platform to Buy Cryptocurrencies
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.
Which cryptocurrency has the best future?
The best crypto for the future could be Ethereum, Ripple, or Dogecoin, and any of them could be the next big cryptocurrency and the best cryptocurrency to invest in.
What is the best long-term crypto portfolio?
A crypto portfolio needs diversity.
Look for a range of cryptos that have different utilities. The majority of cryptos correlate with Bitcoin, so pick out a few that don't. Spread your investment budget across a range of crypto tokens rather than putting the weight of your money on one or two coins.
Are cryptos a good long-term investment?
It is preferable to invest in cryptos with a long term investment plan.
For instance, a year ago, you could buy Ethereum for $85. Today ETH is $2,600.
Do you sell your ETH at the high?
Not an easy question to answer because the high is only the high at this moment. In May, the high of ETH was $4,300.
Some investors sell a little crypto to recoup their initial investment and then leave the rest for a defined period. We are at the beginning of the digital currency age, so it isn't a crazy belief that other cryptocurrencies could see massive future price ranges such as Bitcoin.
Why isn't Tether on the list of top cryptos to invest in 2021?
Tether (USDT) is currently under a U.S. criminal investigation by the Justice Department on suspicion that executives for the digital coin may be guilty of committing bank fraud.
Until this investigation began, Tether would have been on our list of stablecoins for investment as essential to the crypto market.
As the #3 listed coin, the market cap for Tether is almost $62 billion, and Tether underpins over 50% of Bitcoin trades.
The overreaching consequences of criminal charges for Tether and the crypto market are not good. The prosecutors are pursuing the possibility that Tether executives concealed bank transactions linked to crypto.
Until such time that Tether executives are cleared of criminal charges, Tether is not on our list of cryptos for investment in 2021 and beyond.