Cryptocurrencies With The Most Potential
The cryptocurrency market is moving again after months of inertia. Suddenly everyone is speculating on the best cryptocurrencies for investing and which cryptos are suitable for trading.
How do you measure the potential of cryptocurrency?
What makes the best crypto to invest in for the future? Is there a cryptocurrency that could be the next big thing? And which cryptocurrency could make you a millionaire? These are the questions everyone interested in cryptocurrencies is asking.
Is cryptocurrency suitable for beginners? Is cryptocurrency a good investment, and what's the best cryptocurrency exchange to buy cryptos?
If you are a beginner at cryptocurrency, you probably have more questions than answers. You may have talked to self-proclaimed crypto experts who told you that cryptos are dangerous and will not catch on for the future.
The mass public does not understand cryptocurrencies. The mass media coverage of Bitcoin in 2017 and 2018 convinced people that you can either become rich from cryptocurrencies or lose your money buying or trading cryptos.
Both beliefs are true.
Bitcoin made a lot of millionaires in December 2017. But, those that made a ton of money had invested in Bitcoin when it was at a low price. Maybe they were savvy investors, or perhaps they were just lucky.
But, the other side of the coin were uneducated novice investors that purchased Bitcoin at the height of the meteoric rise. Then, as the price of Bitcoin came crashing down, these people sold off their Bitcoin for a loss. They regretted it later once Bitcoin rose again, but it reached $64k, over three times higher than Christmas 2017.
If you're seriously interested in knowing about the cryptos with the most potential, don't commit to buying cryptocurrency unless you are prepared to ride the peaks and troughs.
Discover why you should own cryptocurrency. Your family and friends may warn you not to invest in cryptos. But let's debunk the hype and find out if it's worth investing in cryptocurrency.
What are the potential rewards from cryptos? How long do you have to hold onto cryptocurrency before you make a profit? And what happens if the price of your crypto holdings plummets?
This guide shows you four of the best cryptocurrencies available now to buy with the most potential. We will explain the outlook for each cryptocurrency and why the crypto utility can determine a later price.
By the end of this guide, you can decide whether or not to get involved with crypto because you will understand the cryptocurrency market better than before.
Does Bitcoin (BTC) Have Potential?
Well, the answer to that question is an unequivocal yes.
However, that doesn't mean that investing in Bitcoin is suitable for beginners. Today, the price of Bitcoin is over $46,500 (August 2021) and looking likely to head higher. Crypto industry experts suggest that Bitcoin will reach $500,000 or higher by 2030. Admittedly, $500k seems crazy compared to today's price. But, 18-months ago, you could buy Bitcoin for $3,900.
Bitcoin has, in a way, become self-prophesying.
As more people believe in Bitcoin, it increases demand, which means raised prices. Bitcoin capped BTC at 21 million coins, and there are now 18 million coins circulating. Again, as supply limits, the demand for Bitcoin increases.
But is Bitcoin the crypto with the most potential?
Probably not, despite $500k predictions. Most novice investors don't have $46k lying around to invest in Bitcoin. Admittedly, you can buy portions of Bitcoin, and you don't have to buy an entire Bitcoin. But, investing a few hundred dollars, or even a few thousand dollars in Bitcoin, probably won't give you the greatest return.
Bitcoin is the number one cryptocurrency listed by market cap. But Bitcoin lags behind the utility and function of other third-generation cryptocurrencies.
Firstly, mining Bitcoin is ridiculously complex, energy-intensive and expensive. Bitcoin uses a proof of work (PoW) consensus mechanism, which requires Bitcoin miners to validate and secure the network. The energy requirements are massive, and concerns are rising from an environmental perspective.
With an increased government focus on reducing global warming, restrictions on Bitcoin could limit progress. It may seem a long shot right now, but it could happen.
Bitcoin transactions are slow, taking 10-minutes per transaction, and fees are still expensive.
So, Bitcoin isn't on our list of cryptos with the most potential, and we hope you may understand why by the end of the article.
What Makes Crypto Good For Investment?
We talked about Bitcoin not being the best investment for cryptocurrency beginners because of the high price. But, equally, buying the cheapest cryptocurrency may not be a good investment either. It could be the next cryptocurrency to explode in 2021, or it may stay at the same price for many years and never return a profit.
We mentioned third-generation cryptocurrencies, and Bitcoin is a first-generation cryptocurrency. Very soon, fourth-generation cryptos will spring up.
If you started a business in 2001, you'd likely have made many mistakes as you learned to become a streamlined, profitable business. Let's say you are in the widget industry. Over the years, other companies start a widget business, and they review all the mistakes you made and assess what you did right to become successful.
Cryptocurrencies are not dissimilar. Third-generation companies launched, armed with the knowledge gained from previous crypto generations. They fixed the problems of early cryptos and focused on what they understood would make a cryptocurrency work for the long term.
Bitcoin may reside at the helm of cryptocurrencies right now. But, undoubtedly, other cryptos will challenge the right to the #1 position in the future.
Before blindly buying a cryptocurrency because you like the name or it's cheap, check out the following list, which is a guide to figuring out the potential for a cryptocurrency.
- It must be scalable – most first-generation cryptos failed to consider scalability. But it transpires to be one of the essential aspects of success for cryptocurrency.
- Does it have a good following – some of the cryptos featured in the guide have huge followings, and that's important because it signifies belief in, and support of, crypto. Check each crypto for signs of a solid community. Also, watch media coverage for anything that might influence crypto prices.
- Do the founders have crypto experience? – many recent cryptos were founded by co-founders of a previous cryptocurrency. They utilize their expertise and knowledge to develop the new cryptocurrency.
- Utility – what makes the cryptocurrency unique? Does it solve a mainstream problem, and can other blockchains use the technology? Is it innovative and disruptive technology, perhaps challenging mainframe infrastructure? – a good thing.
- What is the vision? – how prepared are the crypto for the future? What are their goals and plans, and are they transparent to the public?
The following four cryptos address the five aspects of checking if crypto is worth buying for investment.
Cryptocurrencies With The Most Potential
The following list is the top four cryptos with the most potential for 2022 and beyond.
1. Ethereum (ETH)
Listed - #2
Price - $3,221
Market cap - $377,745,445,491
Ethereum has a large and loyal following. Crypto experts suggest that ETH could be as high as $20,000 by 2025.
Right now, Ethereum is in the process of an upgrade to Ethereum 2.0. Like Bitcoin, Ethereum started as a proof of work (PoW) consensus, but the upgrade transitions to proof of stake (PoS) consensus, which means you can buy a stake in ETH and earn ETH rewards.
The Ethereum network will no longer need miners to validate transactions and secure the network when the upgrade completes, and transaction speeds may increase to 100,000 transactions per second (tps).
The Ethereum 2.0 upgrade should complete in 2022. Until then, if you stake Ethereum, you cannot access your ETH or ETH tokens. Read our recent article if you'd like to understand how to stake Ethereum and earn up to 8% APY in ETH tokens.
But, if you want to invest in Ethereum, you can buy ETH and store it in a secure crypto wallet. You don't have to invest $3,221 in Ethereum. You can invest whatever amount you can afford, such as $1,000 or less.
Ethereum ticks all of the checklist boxes for cryptos for investment potential.
2. Cardano (ADA)
Listed - #4
Price - $2.11
Market Cap - $67,967,024,125
We featured Cardano (ADA) in a recent article on what's the best cryptocurrency to buy in 2021. Over the last week or so, Cardano moved up from the #5 spot and increased the market cap from $43,688,118,444. The price of ADA has almost doubled.
The Cardano Network is innovative and disruptive. They were the first to launch a proof of stake (PoS) consensus protocol. Cardano wants to become the best crypto platform for smart contracts.
Cardano is third-generation crypto and leads the way for emerging cryptos to follow. Cardano focused on scalability from the offset, intending to become the best platform for smart contract technology – programs stored on the blockchain that operate under predetermined conditions without any external interference.
Cardano's price performance has already exceeded predictions from crypto industry experts. At today's price, Cardano is affordable for most crypto investors, including beginners.
Because Cardano is proof of stake (PoS) consensus, you can earn a small percentage a year from staking Cardono. You can read our article on how to stake Cardano to find out more about staking
Anticipate holding onto your Cardano holdings for the long term. Nobody can truly predict the price for Cardano, but it could well be the next big thing for cryptocurrencies. We say this because Cardano recently released a paper suggesting a possible upgrade to HYDRA's two scaling solution. If this happened, HYDRA would enable 1,000,000 tps which would challenge mainstream transaction speeds.
Cardano ticks all of the checklist boxes for cryptos for investment potential.
3. Dogecoin (DOGE)
Listed - #7
Price - $0.32
Market Cap - $43,007,081,094
Dogecoin recently moved from the #8 listed coin to #7, and the market cap has increased significantly from $26,093,250,383.
Dogecoin is a peer-to-peer service for sharing content. Although it is a proof of work (PoW) consensus, it is faster than Bitcoin. You can also join a Dogecoin community and receive DOGE token rewards.
Elon Musk has mentioned Dogecoin several times as a crypto of interest. Not bad, considering Dogecoin began as a joke.
Dogecoin has a loyal following, but recently, Jackson Palmer, the founder of Dogecoin, made a negative public statement about cryptocurrencies and prices fell. DOGE was static for several months but has now started making gains.
Dogecoin ticks the majority of the checklist boxes for cryptos for investment potential.
Crypto industry experts predict that the price of DOGE could be as high as a dollar by 2025. In April 2021, DOGE hit a high of $0.64, so $1 is not an unreasonable expectation. Market cap increased by $17,000,000 over the last week or so.
4. Polkadot (DOT)
Listed - #9
Price - $24.46
Market Cap - $24,151,414,305
Polkadot is unique as it creates parallel chains from bonding, allowing other blockchains to interlink operations. Founded by Gavin Wood in 2016, we expect Polkadot to withstand the test of time and increase market cap.
Polkadot technology is infinitely scalable, and they have the backing of the Swiss Web3 Foundation, supporting the development of applications and services.
The growth potential for Polkadot is unrivalled. Before the end of 2021, crypto experts predict a price of around $80, and by 2025, Polkadot could be well over $100. With such unique technology, Polkadot prices are likely to rise. Hold onto your Polkadot holdings for a few years to maximise profits.
Polkadot ticks all of the checklist boxes for cryptos for investment potential.
Recap Of Cryptos With The Most Potential
There are thousands of cryptocurrencies listed by market cap, but we have listed four cryptos in the top ten. We believe the four cryptocurrencies will see a rise in prices.
You can buy and hold Ethereum, Cardano, Dogecoin and Polkadot, but you can also stake them other than Dogecoin. If you stake the coins, you can earn a small yearly reward, paid in the token of the currency. Ethereum is ETH, Cardano is ADA and Polkadot is DOT tokens.
You can't yet stake Dogecoin. But if you join a Dogecoin community, you can earn DOGE rewards for participating in the community.
Other cryptocurrencies are worth investing in, but this list of the best cryptocurrencies will get you started. Spread your risk by buying a measured amount of coins, so your portfolio isn't weighted to one coin.
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. There are no guarantees for profiting from cryptocurrencies, and it's advisable only to risk what you can comfortably afford to lose.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Trading Education.
eToro – The Best Platform to Buy Crypto Assets
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.
What is the best cryptocurrency exchange for beginners?
Select an exchange with an established reputation and one where you can stake your coins if you wish and store them in a secure crypto wallet. Don't leave your coins on an open crypto exchange. If the site got hacked, you could lose your cryptocurrency holdings.
How long should I hold my cryptocurrency coins?
Think long-term and hold your coins for a few years, from say 3-10 years. If you can buy enough crypto coins, you can take a little profit off the table as the price progresses. That way, you can cover the cost of your investment but have enough crypto left to make further gains.
Are cryptos good for long-term investment?
Yes, if you can afford to ride the volatile waves of cryptocurrency prices over the years. Cryptocurrency can be an excellent investment, although they are highly volatile with substantial price swings.
At times, you may see your investment halved or more. Try not to lose your nerve and hold tight.
As we mentioned at the beginning of the article, we talked about the sell-off of Bitcoin. People bought near the high of $20k and were panic selling at $9k, not understanding that what comes down will ultimately go back up.
The only way you lose your money is if the cryptocurrency closes down. But, by choosing cryptos from the top ten listed cryptocurrencies, you have a good chance of seeing a return on your investment.
My friend says cryptos have no future. Is that true?
Is your friend a cryptocurrency expert? (unlikely).
The mass consensus of the uneducated crypto public does not understand the immense power of emerging crypto technology. Already, some cryptos can challenge mainframe infrastructure. Fiat currency is flawed, as is the entire financial system. Cash is no longer king, and it became more unpopular during the Covid-19 pandemic.
Listen to the crypto experts. Do your research, and you will learn that cryptocurrency has a great future.