Top 15 Cryptocurrencies To Know And Watch in 2021: BTC, ETH, XRP, And More!
You must know these top 15 cryptocurrencies to succeed in 2021!
Wondering which cryptocurrency will explode in 2021? Or possibly, which crypto has the most potential in 2021? Will Bitcoin go up in 2021? We’ll cover all this and more!
2021 is going to be a tough act to follow, that’s for sure! Bitcoin really reached for the Moon after it’s halvening and reminded us all the crypto dream is still a reality.
But when you ask what’s probably going to happen in 2021, most cryptocurrency traders give very different answers, so it gets pretty hard to get a clear answer on which will make traders’ their fortune in 2021.
And it’s not just Bitcoin you should keep your eyes on, there’s a lot to be excited about in 2021, and you should keep track of it all! (Sometimes that’s just impossible!)
While Bitcoin is drawing in the big institutions, Ethereum is watched closely as it finally starts transitioning to proof of stake and Ripple deals with a SEC fiasco that might shake the crypto world up a bit.
And looking more closely at altcoins, there is still a wealth of opportunities there too! Plenty that you can still buy into at a low price and profit from much later.
Of course though, in the end it’s all about popularity. The more a coin is used, and potential applications it may offer, the higher its value will become. But that also works both ways - if a cryptocurrency becomes less popular, it can easily stagnate and decline in value too.
In this article, we’re going to look into the top 15 cryptocurrencies to know and watch - and depending on your judgement - best cryptocurrency to buy in 2021!
Top 15 cryptocurrencies to know and watch in 2021:
- Bitcoin (BTC)
- Ripple (XRP)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
- Cardano (ADA)
- TRON (TRX)
- Binance Coin (BNB)
- Stellar (XLM)
- Tezos (XTZ)
- EOS (EOS)
- MIOTA (IOTA)
- Zcash (ZEC)
- Ethereum Classic (ETC)
- NEO (NEO)
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We’ve organised our list based on which cryptocurrencies present the best opportunities for 2021. But all in all, each one is worth keeping an eye out for.
1. Bitcoin (BTC)
Bitcoin is always first in line in the world of cryptocurrency!
Yeah, we know, every list always talks about Bitcoin first … blah blah blah! But 2021 is very, very different. In 2020 we finally saw some major action with Bitcoin, at last reaching $20k territory again and then shooting right past it, two-fold!
Bitcoin offers perhaps the best short term cryptocurrency investment for 2021 with major volatility returning for the first time in about four years. We are yet to see what exactly will happen.
Will it continue to rise to new levels in 2021 or will it find a new point to start ranging at with clear levels of support and resistance? Or Will we have to wait until another halvening until we see such an enormous rise?
Well, to answer these questions, we can look at what some of the experts are saying.
According to Andy Agnas, “we can say that BTC will continue breaching new heights in 2021. But of course, there will be some occasional dips in price, but it won’t be as harsh as what happened in 2018 where it hit its lowest”.
So, bear in mind that Bitcoin’s journey will not always be upwards! In fact, we may also see a lot of ranging at times too as prices stabilise between peaks and troughs.
But then again, some things just can’t be predicted, like Tesla announcing that they have bought $1.5 billion of Bitcoin in early February, and the price shooting upwards past $48k the following day! (Another record!)
We also should not forget two major things that make Bitcoin perhaps the best crypto for 2021:
1) Institutional traders and big banks are getting deep into Bitcoin - they are finally seeing its potential.
And, 2) Bitcoin is like the ‘gateway drug’ to the cryptocurrency world. It’s the most well-known cryptocurrency and newbies tend to turn it first when they start out, before going on to explore other opportunities.
With that in mind, Bitcoin is still perhaps the crypto with most potential in 2021, and you better keep an eye on it! Despite this, Bitcoin traders should still be cautious of a potential crash, don’t start thinking the market can only go up!
- Approximate market cap: $865,033,736,991
- Approximate price per coin: $47,055.05
- 2020 return: 4,698.3%
- Established: 2009
Read our article on Bitcoin here.
Have you considered investing in Bitcoin (BTC)?
2. Ripple (XRP)
Don’t be scared off by the SEC, there’s still tonnes of potential with Ripple!
You were expecting Ethereum, weren’t you? WRONG!
Ripple takes spot No. 2. Why? Well, despite sliding down from the third-largest by market cap to the fourth, Ripple has a lot of potential to rise back up to the top and when it does, it could be very profitable to be there.
The decrease in price has meant it is now easier to get into Ripple. Of course, though, you need to believe that that price is going to bounce back.
And for those of you worried about the trouble with the SEC (US Securities and Exchange Commission), there’s likely no need to be scared of trading it (unless you’re in the US, you may want to exercise some caution). Nothing has happened yet, and it will not likely affect traders outside the USA.
According to PrimeXBT, Ripple’s price prediction for 2021 could be a potential high of $27 per token and a potential low of $0.5, which is actually higher than its current price is at the time of writing!
But perhaps a more reasonable prediction comes from City Telegraph, who believe that Ripple is on a bullish trend that will likely lead it up to $0.755 per coin in 2021 and that we will likely see investors’ interest return once the price crosses $6.50.
Remember, there is also the possibility that the situation with the SEC could be a win in the end, and if that’s the case, which could be very good for the value of Ripple!
- Approximate market cap: $20,807,485,096
- Approximate price per coin: $0.4583
- 2020 return: 2,846.0%
- Established: 2012
Read our article on Ripple here.
Have you considered investing in Ripple (XRP)?
3. Ethereum (ETH)
The queen of the cryptocurrency world is still going strong!
Now, as you probably already know, Ethereum is completely different from Bitcoin in a range of ways. Ethereum has its sights set far beyond just revolutionising how we use money but also how we use the internet!
And that vision is slowly but surely coming to fruition. In the first quarter of 2020, it was reported by the Cointelegraph that there are now 635 functioning DApps operating on Ethereum, with a total of 616,369 ‘active’ users.
While DevTeam.Space, in an article about DApps in 2021, claims there are up to approximately 3,000 on Ethereum! (That said, functioning or not isn’t clear.)
Either way, that’s potentially a very large increase and shows us that Ethereum is still very much growing in terms of usage and this will impact its valuation, potentially making it one of the best cryptocurrencies in 2021.
Another vital thing to remember about Ethereum is that it is typically a new trader’s second choice after Bitcoin.
Once they get a taste of Bitcoin, they typically move on to start investing in Ethereum, the second-largest and well-known cryptocurrency.
In 2021 Ethereum is already reaching new highs. This is likely partially to do with the increased interest in Bitcoin (a knock-on effect that will likely affect much of the cryptocurrency market).
It rocketed upward in February 2021 to reach $1,800 per coin. Though it should be said, experts such as Capital.com still believe that by the end of the first quarter of 2021, it will reach a maximum of $1,628 or a minimum of $1,107.
Though it was launched in December 2020, the transition should be completed at some point in 2021. The move has been discussed for years and is long-awaited. Upon completion, there could be some movement upwards.
- Approximate market cap: $200,073,757,033
- Approximate price per coin: $1,745.84
- 2020 return: 4,622.6%
- Established: 2015
Read our article on Ethereum here.
Have you considered investing in Ethereum (ETH)?
4. Bitcoin Cash (BCH)
Bitcoin’s favourite child may have some growing up to do, but still offers great opportunities!
It is true that Bitcoin Cash has lost a lot of ground in the last year since early 2020 but is still in the top 15 (previously was one of the top five).
Don’t disregard Bitcoin Cash because it’s fallen slightly out of fashion, there is still money to be made and it still represents a very real threat to Bitcoin - or at least a viable alternative.
An important thing to consider is if the volatility Bitcoin is bringing into the market may also pass on to Bitcoin Cash as well.
On top of that, just like Bitcoin, Bitcoin Cash also goes through a halvening, which took place on the 8th April 2020.
Arguably though, we haven’t seen the full effects of this yet, we haven’t seen a big rise in price as we did with Bitcoin and perhaps some traders are wondering if it will happen at all.
So, to sum up, for now, the mood is generally ‘wait and see’. That said, The Economy Forecast Agency is predicting that by the end of 2021, Bitcoin Cash could reach between $881-$923 per coin.
- Approximate market cap: $9,136,379,395
- Approximate price per coin: $489.90
- 2020 return: -60.0%
- Established: 2017
Read our article on Bitcoin Cash here.
Have you considered investing in Bitcoin Cash (BCH)?
5. Litecoin (LTC)
Litecoin is like an old dragon that keeps flaming on!
Litecoin was one of the first-ever altcoins and was seriously big news when it first appeared. But similarly to BCH, Litecoin is a shadow of its former self and has now mostly taken a backseat in the crypto scene.
That said, it’s still one of the top dogs in crypto and there is still money to be made trading Litecoin. It still presents plenty of opportunities and is a major player that should be taken seriously.
According to Arthur Webb of Ripple News, Litecoin price predictions for 2021 are between $150 at the highest and $40 at the lowest.
This can be interpreted in several ways. Either it might break through this projection of $150 per coin and into unchartered territory, or it’s running out of steam and may struggle past this.
So, while you should certainly be cautious, depending on how much you may have invested in Litecoin, $3 on top of each coin you have could be a nice profit, depending on your goals.
Crypterium states that some cryptocurrency analysts see Litecoin’s price reaching $600 by the end of 2021.
- Approximate market cap: $11,222,626,982
- Approximate price per coin: $168.58
- 2020 return: 809.2%
- Established: 2011
Read our article on Litecoin here.
Have you considered investing in Litecoin (LTC)?
6. Cardano (ADA)
Two chains are better than one!
Probably most of us know by now Cardano’s primary selling point is its ‘ouroboros blockchain’ - or blockchains, if you will - one for regular transactions and second for smart contracts. (If Cardano was a rapper, it would be ‘2 Chainz’.)
Now, while to some of you this may sound like old news (it is), we are still yet to see this potentially genius idea pushed to the max; to see if their solution really does work and can solve the issue of scalability.
Sometimes we forget, but if the issue of scalability is not solved, cryptocurrency doesn’t really have a fighting chance to take off and truly take on fiat money.
To give up on this project now would be a little foolish. Cardano still has the chance to be the next cryptocurrency to explode in 2021, but if you quit now and it happens, you’ll feel very sorry for yourself!
So have some patience. It’s easy to forget that, especially since Cardano was very explosive back in early 2018.
Do note though, some of that volatility has been returning in recent months with some sources, such as Investorplace believing that Cardano could reach $2 per coin.
Trading Beasts predict an increase in Cardano’s price, believing that it will reach $1.038 by December 2021.
- Approximate market cap: $21,314,232,382
- Approximate price per coin: $0.6851
- 2020 return: 38.9%
- Established: 2017
Read our article on Cardano here.
Have you considered investing in Cardano (ADA)?
7. TRON (TRX)
Is TRON still quietly ploughing ahead in secret?
People forget that TRON has a hell of a lot going for it.
But perhaps the biggest thing they overlook is that TRON started out on the Ethereum network! Why is this significant? Because it means it uses the same coding language - Solidity.
This is a huge advantage for TRON because it means that DApp developers can easily move from developing on Ethereum to TRON.
So, if there ever is a strong reason to move away from Ethereum (e.g., too costly, scalability issues, functional issues), TRON will be one of the first alternatives they will likely think of.
With this in mind, it is highly possible that TRON could be very undervalued. Now do bear in mind that we might not necessarily see a significant profit from TRON in 2021, but it may be the perfect time to get in and hold before it’s too late.
Trading Beast predicts that by December 2021, TRON could reach a maximum price of $0.0582281, a healthy increase.
- Approximate market cap: $3,340,415,564
- Approximate price per coin: $0.04662
- 2020 return: 463.5%
- Established: 2017
Read our article on TRON here.
Have you considered investing in TRON (TRX)?
8. Binance Coin (BNB)
The Binance Exchange’s utility token is still very popular, but what does its future hold?
Binance Coin is a pretty simple crypto, but hey, what’s wrong with being simple in the complex world of cryptocurrency trading?
Look at Bitcoin, it’s nowhere near as complicated as some of the other cryptos on this list, but yet it thrives!
The question about Binance Coin though, is how long it will truly be worth trading? Will it still serve some use in the future? And if so, what will that be beyond the Binance Exchange?
And, furthermore, what about the discount the exchange gives for using the coin to purchase crypto? Will it stay the same or will Binance continue to reduce it as they originally planned?
According to page 9 of Binance’s whitepaper, by the fourth year (which would be 2021), the discount would be only 6.75% for paying certain fees with Binance Coin. However, so far, they have not reduced it from 25% for the last two years.
And by the 5th year (which would be 2022), it was intended there would be no discount. But perhaps this idea is now abandoned? Binance needs to clarify their intentions.
All this makes it hard to say where Binance Coin will be in the near future, but for now, at least, it is possible to make some profits trading it.
That aside, Digital Coin Price predicts that Binance Coin could reach as high as $158.49 in February 2021 and close the year at around $133.98.
- Approximate market cap: $16,060,572,142
- Approximate price per coin: $103.35
- 2020 return: 11,309.9%
- Established: 2017
Read our article on Binance Coin here.
Have you considered investing in Binance Coin (BNB)?
9. Stellar (XLM)
Is Stellar a viable alternative to Ripple?
Stellar saw some tidal waves of volatility back in 2017 and 2018, and then entered a period of quiet that ended pretty recently (just like many other altcoins).
The aim of Stellar is a familiar story we hear throughout the crypto community: ‘let’s help bank the unbanked’.
According to the World Bank, approximately 1.7 billion adults are ‘unbanked’, which they define as ‘without an account at a financial institution or through a mobile money provider’.
It’s a pretty honourable cause, but it’s also a pretty tough one as well, which is likely why they now focus more on connecting financial institutions with each other via the blockchain.
Perhaps in terms of technology and aims, Stellar most similarly resembles Ripple. In fact, Jed McCaleb, the co-founder and CTO of Stellar, previously worked on Ripple before leaving, disagreeing with the direction they were heading.
With this in mind, Stellar could be a good hedge against Ripple or if you think that the approach the two are taking is the approach that will win over the mainstream.
Especially when Ripple is facing some legal issues, Stellar might stand out as potentially one of the best cryptos to buy in 2021.
3Commas predict that the maximum price to expect for Stellar for 2021 is $0.45 and a minimum of $0.208.
- Approximate market cap: $8,703,291,056
- Approximate price per coin: $0.3895
- 2020 return: 1,263.8%
- Established: 2014
Read our article on Stellar here.
Have you considered investing in Stellar (XLM)?
10. Tezos (XTZ)
Is Tezos the most democratic crypto, and will that help it succeed in 2021?
In theory, Tezos is arguably the most adaptive cryptocurrency so far, with ‘governance’ being a core part of its development. No other cryptocurrency so far is this democratic and decentralised (which is what crypto is all about and gives it value) in terms of development.
And by putting governance before development, the idea is that they can adapt to change quickly and therefore last longer than other cryptos (and hopefully make wiser decisions).
The very nature of how everything is handled is a simple concept to grasp which makes it more easily accessible to the everyday trader.
That said we are yet to see a clear example of this in action. Only then can we really decide how well it works.
Which is why Tezos might be a crypto that traders will have to hold for a while before they see any major value and investing now while it’s cheap might be smart.
Do note that if you take a deep dive into Tezos you will likely hear about the scandal that happened shortly after its ICO (one of the biggest ICOs ever!). But this shouldn’t discourage traders, those days are now long behind them.
Wallet Investor predicts that in 2021, one Tezos token will be worth $4.665 and $10.112 by 2030.
- Approximate market cap: $2,742,180,683
- Approximate price per coin: $3.62
- 2020 return: 241.1%
- Established: 2018
Read our article on Tezos here.
Have you considered investing in Tezos (XTZ)?
11. EOS (EOS)
Is the ‘Ethereum Killer’ just biding time?
When EOS first arrived on the scene, a lot of Ethereum traders, hodlers and developers got worried. EOS were saying they could do pretty much what Ethereum could do - specifically DApps - but better.
Now, while that hasn’t yet materialised into anything just yet. It still makes EOS a great hedge against Ethereum for those who see the future of DApps.
According to DappRadar, there are at least 572 DApps using the EOS network, roughly six times less than Ethereum.
EOS is perhaps one of the best cryptocurrencies to invest in today. It is already in use and very popular among developers already using it while some cryptos on this list are very much ‘wait and see’ (meaning we need time to see if they can achieve their claims), EOS has a practical use now.
The value of EOS is more tangible than other cryptocurrencies who seem to be planning world domination. So, traders looking for an altcoin that has everyday use already, look no further than EOS.
Trading Beasts predict that by December 2021, EOS may be worth a maximum of $3.87264 per coin.
- Approximate market cap: $3,523,772,269
- Approximate price per coin: $3.66
- 2020 return: 118.4%
- Established: 2018
Read our article on EOS here.
Have you considered investing in EOS (EOS)?
12. MIOTA (IOTA)
Will MIOTA’s DAG prove to be as innovative as blockchain technology?
MIOTA is perhaps the most innovative crypto in terms of potential everyday use in the future. Imagine if your car could pay for its own fuel or a house that could pay its own utility bills!
They are very forward-thinking, building something ahead of the technology needed for it to even work.
Because of this MIOTA is one of the best cryptos to invest in for 2021. Traders need to wait a while to see MIOTA’s true value, it will take a while for us to reach the point where this crypto is most useful. It may be even decades!
But there is something else we need to mention; MIOTA is also quite controversial in the crypto community. Why? Well, some don’t even really consider it a cryptocurrency as it uses a DAG instead of a blockchain.
A DAG is a ‘Directed Acyclic Graph’, and it works very differently to blockchain technology, which is championed by most cryptocurrencies and seen as the best solution.
DAGs have existed far longer and in some circles are not seen as effective. Traders will have to make that assessment when looking at MIOTA.
Trading Beasts seem optimistic about MIOTA, predicting it to be valued at $1.1060496 at the highest by December 2021.
- Approximate market cap: $2,033,370,042
- Approximate price per coin: $0.7316
- 2020 return: 9,000.0%
- Established: 2016
Read our article on MIOTA here.
Have you considered investing in MIOTA (IOTA)?
13. Zcash (ZEC)
Is Zcash the top must-have privacy coin of our time?
For any top crypto trader, it’s always seen as a good idea to have at least one privacy coin in your portfolio. In fact, it’s good to have a bit of everything a bit different in the crypto market.
Privacy coins are particularly seen as important to those who believe you should look out for your personal data, specifically your financial data. It shouldn’t be left lying around on the internet for anyone to find, as is the case with distributed ledgers.
But the issue with privacy coins just like Zcash is that governments and banks really dislike them and there is a misconception that their sole purpose is to subvert the law.
To them, the idea of anonymity in finance is reserved for criminals (‘unless you’re a cocaine dealer, why do you need to hide your identity?’).
Now, here’s what makes Zcash stand out from the competition with other cryptocurrencies also aiming to dominate the privacy sphere - Zcash is working hard to prove that it is legal, and it is not to be used to break the law.
And they’re willing to work with governments to prove that there is absolutely nothing wrong with what their cryptocurrency does, and it’s this effort to work with banks and governments that gives it value.
In fact, as early as 2017, JPMorgan Chase, one of America’s biggest banks, started collaborating with Zcash, showing some favouritism by big institutions.
Experts disagree on what Zcash will likely be valued by the end of 2021. Previsioni Bitcoin predicts the price of Zcash of $415.68 in 2021, while Trading Beasts estimate a more conservative maximum of $137.989.
- Approximate market cap: $1,153,269,485
- Approximate price per coin: $103.95
- 2020 return: -99.3%
- Established: 2016
Read our article on Zcash here.
Have you considered investing in ZCASH (ZEC)?
14. Ethereum Classic (ETC)
The best potential hedge against Ethereum?
Closest to the real thing, or shall we say the ‘original’. As Ethereum and Ethereum Classic both continue to develop in separate ways by different teams, the rift between them will become larger and the differences more prominent.
Note that this will especially be true after Ethereum completes its transition to proof of stake - if this causes issues with Ethereum, many might flock to Ethereum Classic, in an attempt to replicate what Ethereum once was.
That said, Ethereum Classic would have to face fierce competition from EOS, NEO, Cardano and TRON, just to name a few.
Perhaps a hedging Ethereum Classic against Ethereum is the most ultimate hedge, and there is absolutely nothing wrong with trading both.
You don’t have to solely identify yourself with one camp, though granted Ethereum definitely has an edge over Ethereum Classic, that edge might not always be there.
For December 2021, The Economy Forecast Agency predicts the price of Ethereum Classic a low of $9.34 and a high of $10.76.
Trading Beasts predicting that the price of Ethereum Classic to reach a minimum of $6.49 and a maximum of $9.55.
- Approximate market cap: $1,066,077,947
- Approximate price per coin: $9.17
- 2020 return: 561.4%
- Established: 2015
Read our article on Ethereum Classic here.
Have you considered investing in Ethereum Classic (ETC)?
15. NEO (NEO)
Don’t forget about one of Ethereum’s biggest and oldest rivals!
Just like Ethereum Classic, it may be wise to allocate a small percentage of your funds for trading to NEO, another player in the realm of creating the next generation of the internet.
And similarly to Tezos, NEO aims to be continuously developed, meaning that it may also stand a chance of outliving its competitors.
But there’s also a lot more going on with NEO - it’s outside the proof of stake vs. proof of work battleground. Instead, it uses a ‘Delegated Byzantine Fault Tolerance’ mechanism, which supposedly is fairly similar to delegated proof of stake.
All this makes NEO a cryptocurrency of interest and potentially the next big cryptocurrency (remember though, patience and a bit of imagination might be necessary!).
Similarly to Ethereum Classic, both The Economy Forecast Agency and Trading Beasts disagree on NEO’s potential with The Economy Forecast Agency giving higher estimates.
Trading Beasts believes that by December 2021, NEO will reach a minimum of $19.52 or a maximum of $28.71. The Economy Forecast Agency meanwhile states that it could be between $39.45 at the lowest and $48.96 at the highest for the same time period.
- Approximate market cap: $2,224,170,822
- Approximate price per coin: $31.53
- 2020 return: 3,571.1%
- Established: 2014
Read our article on NEO here.
Have you considered investing in NEO (NEO)?
So, Which Cryptocurrencies Can Make You Rich In 2021?
Isn’t that the question we all have?
No one can guarantee that you will be rich by investing in any of the cryptocurrencies on this list!
We are not clairvoyant and we certainly do not pretend to be Nostradamus. All cryptocurrencies in our list present great potential and great risk and all are affected by different factors depending on what they are trying to achieve.
The real answer is there is no easy, get-rich-quick scheme here, and cryptocurrency trading has never been one. Everyone who became rich by trading had to wait. No single trade will make you rich and there is a lot of work involved!
Perhaps now, at this current moment, Bitcoin might be the best cryptocurrency to invest in 2021, presenting some of the best opportunities for making a profit this year if the volatility continues.
But putting in a safe amount of your funds for trading in several different coins could be safer, diversifying your risk.
Ideally, you should pick coins you understand and remember that the majority of the coins in this list are still in their infancy, and we need to wait a little longer to see if they have any real value, which is why traders should be patient with them.
Then there is Ethereum, which will continue to transfer to proof of stake in 2021, a process that will take place over several stages. This may boost the cryptocurrency significantly, but the risk of it failing should have traders looking at potential alternatives.
Finally, Ripple’s dilemma with the SEC may look scary, but remember it could actually end up being good for them. The situation may even pave the way for improved regulation of cryptocurrency.
On top of that, the SEC may have just created a perfect buying opportunity for Ripple if it bounces back. As long as you are outside the US, there isn’t much reason to avoid Ripple.
However, you choose to trade, remember to take profits every so often and cut losses.
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Conclusion: Where Will Cryptocurrency Go in 2021?
Now that’s just as difficult to answer as the question about making a profit in 2021! In all honesty, we just don’t know yet what 2021 will hold for us.
One thing we can do is look back at previous years and make some general assumptions about what will likely happen.
But there is a problem with this approach - cryptocurrency has only been around for roughly 12 years, which is not long enough to really have an idea of the direction the market will take.
That said, there are a few things we can take as ‘certainties’, if we are willing to call them that at all.
Looking back on previous Bitcoin halvenings, most likely Bitcoin will find a new level of support and resistance and stay at that point till the next halvening which should be at some point in 2024.
With this knowledge, traders can either try to day trade these new levels or hold until the next jump up.
It is also quite likely that Bitcoin will bring with it a wave of interest in other cryptocurrencies as well. This will probably come in three different forms:
- Bitcoin traders expanding more into cryptocurrency. They likely made some money trading Bitcoin and are now looking to reinvest those profits into other cryptocurrencies.
- Newbie traders who are completely new two the crypto scene who now want to jump into the action after seeing the potential.
- Experienced crypto traders who know other cryptocurrencies will be experiencing some volatility and what to profit off that action as well.
Another thing we will most certainly see continuing into 2021 is a range of new cryptocurrencies flowing into the market as we have seen for the last few years. And while this happens, we will likely see more fade from popularity as well, being mentioned less and less.
On top of that, we should keep our eyes peeled for altcoins moving away from the Ethereum network and to their own ‘mainnet’, which is a continuing trend.
Cryptocurrencies that can successfully migrate to their own network will likely surge.
Ready to dive into the crypto market?
The way we trade cryptocurrency in 2021 may be changing
Probably the biggest development we will continue to see in 2021 is the increasing involvement of big institutions in cryptocurrency who have a lot of money to pump into the market.
Their involvement in the crypto market is largely because it has matured immensely since its early days.
This has led traders of all creeds to start seeing cryptocurrency as a serious development that cannot be ignored and should in fact be embraced. And though the market is still volatile, it’s way less risky than a few years ago.
Further to that, the ways in which you can trade cryptocurrency have evolved a lot too. A key example of this is the crypto futures market.
Bitcoin futures started in 2017, and now in February 2021 we will see Ethereum Futures, which will definitely boost trading and provide more people with access to crypto trading.
Perhaps not this year, but in the next few years coming, we may see more cryptocurrency trading in the form of futures.
Another key development you watch out for in 2021 is the strong influence of Reddit, with Redditors likely to continue to drive up prices of specific cryptocurrencies in an effort to prevent Wall Street traders and hedge funds from shorting them. (In a sense, they are like the antithesis of the big institutions.)
Just like they did with GameStop stock, they are doing the same with Dogecoin (driving it up to the tenth-largest by market cap!) and they may continue to do so with other cryptocurrencies if they feel like there is a threat to them.
The rise of DeFi (Decentralised Finance) has also really changed the cryptocurrency scene and will likely continue to do so for the rest of 2021. Some believe that DeFi may even completely overhaul the way we trade cryptocurrency over the course of the next decade (even Nasdaq does!).
Looking at CoinMarketCap's DeFi section, you will notice the situation is very different there with some altcoins surging while the biggest cryptocurrencies are nowhere to be seen.
In response to the potential threat of DeFi, brokers may eventually start diversifying the cryptocurrencies they offer. Typically, they have been very careful when offering cryptocurrency trading, sticking to the top 10 at the very most.
But as the top 10 has changed significantly over the last few years, it may be wise for them to drop some less favourable coins and add more recent ones.
If they wish to continue drawing in new traders, they may need to take more risks and widen the variety they offer. Only time will tell.
Is the coronavirus fuelling inflation and pumping the price of cryptocurrency?
Perhaps not enough people are talking about it, but one of the primary reasons cryptocurrency, particularly Bitcoin, is increasing in value is because of inflation.
Coronavirus stimulus bills have increased inflation as central banks, such as the US Federal Reserve, print more and more money to provide aid.
Because of this, the purchasing power of the US dollar and many other currencies continues to decline, losing the confidence of many traders who want a safe store of value for their money.
Traders are now putting their profits elsewhere, in this case, Bitcoin, moving away from fiat currency.
Interestingly, according to Investopedia: “Congress is currently in talks to pass another stimulus bill of nearly $1 trillion, aimed to help those suffering from the coronavirus. Should this new stimulus bill be passed it would mean that since the onset of coronavirus, around 50% of the world’s total supply of US dollars will have been printed in 2020”.
More recently, according to Reuters US president Biden has unveiled a $1.9 trillion stimulus plan, almost twice the size of the plan discussed above by Investopedia. Though when this plan will be implemented is unclear.
What does this all mean?
It means that if this stimulus bill goes ahead in the US, there might be another rise in the price of Bitcoin.
Let’s see what happens!
If you remember anything from The Top 15 Cryptocurrencies To Know And Watch In 2021: BTC, ETH, XRP, And More! make it these key points.
- Bitcoin is still the leader and may bring with it a lot of volatility during 2021. After a long period of not too much movement, this is excellent news.
- Ripple’s situation with the SEC could end in a variety of different ways. The bottom line is, don’t be put off, but do exercise some caution.
- Ethereum is getting closer and closer to moving to proof of stake. 2021 could be a great time for traders to get involved.
- Some cryptocurrencies have clear use cases while others require patience. Cryptocurrencies for smart contracts are already in operation, while some cryptocurrencies with more grandiose plans will require time before we see their value.
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