Planning to invest in cryptocurrencies in 2021? Want to stay ahead of crypto trends? We’ve made it easy with our complete guide to the top 10 cryptocurrencies to invest in for 2021.
Beginners having difficulties finding the best cryptocurrency to invest in for 2021, fear not! We’ve all been in this situation, so don’t worry! We understand how confusing it is when looking for new cryptocurrency investments. And that’s why Trading Education is here to help!
So, are you also looking for the next cryptocurrencies to invest in for 2021? Do you find yourself wondering: “should I be investing in Bitcoin?” or “should I be investing in Ethereum?” Or maybe you’ve invested in both already and now you have no idea what to invest in next?
There are a lot of choices out there. It can get pretty overwhelming. Especially when many coins are attempting to do similar things or have plans so vast it will take decades for them to be fully conceptualised.
And to make things worse, the crypto scene is constantly changing. Investors’ interests change, technology changes; a crypto can be immensely popular one day and disappear the next.
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The Best Cryptocurrencies To Invest In 2021:
| Position | Symbol | Name |
|---|---|---|
| 1 | BTC | Bitcoin |
| 2 | ETH | Ethereum |
| 3 | SOL | Solana |
| 4 | ADA | Cardano |
| 5 | XRP | Ripple |
| 6 | DOGE | Dogecoin |
| 7 | LUNA | Terra |
| 8 | ALGO | Algorand |
| 9 | BNB | Binance coin |
| 10 | UNI | Uniswap |
As 2021 comes to its closing months, it’s becoming clear this crazy ride of a year could still hold some surprises.
Being able to predict new cryptocurrency trends is a key skill for any trader. But with more than 11,000 different altcoins on the market (according to CoinMarketCap), how can you tell which ones will be the best cryptocurrency investments in 2021?
How can you tell the difference between a coin that’s ferocious dynamite, just waiting to explode and a zombiecoin that’s got no future?
Let’s make one thing crystal clear: the future of crypto is never certain, so making cryptocurrency predictions can be tricky — especially because of crypto’s volatile nature. Price predictions should only be viewed as a kind of guidance, to show you what might be possible.
However, the good news is that crypto experts still believe that 2021 could be the year of crypto and that there could still be more action to come, thanks to the market’s recovery and developments such as the long-awaited update to Ethereum.
Below you will find the best 10 cryptocurrencies to invest in 2021 and beyond.
1. Bitcoin (BTC) — On its path to replace gold as the ultimate store of value?
Are you asking yourself, “should I invest in Bitcoin?” “Is the value of Bitcoin already at its peak?” Or “is Bitcoin the best cryptocurrency to invest in 2021?” Well, we wish we knew! However, the following info should help you to decide if investing in the cryptocurrency Bitcoin is a good idea for you.
It should come as no surprise that Bitcoin is at the top of our list of cryptocurrencies to invest in 2021. This so-called ‘King of Cryptocurrencies’ has dominated the market since its birth in 2009 — and there’s no sign that its status will change soon.
Cryptocurrency predictions still suggest that Bitcoin could be set for its strongest year yet in 2021.
According to Ryan Selkis, the CEO of the cryptocurrency tracking site Messari, Bitcoin and Ethereum will retain their top positions when it comes to market capitalisation. This is in contrast to a variety of other assets, which he predicted will lose their ranking in the top 10 cryptocurrencies in 2021.
So, what’s next? In July 2020, a chart associated with Citibank predicted that the price of Bitcoin could skyrocket to an incredible $120,000 in 2021! This is six times what it reached in December 2017 and more than double its current price at the time of writing.
There are likely three primary reasons for Bitcoin’s dramatic price increase:
- Firstly, in May 2020, Bitcoin went through another ‘halvening’, which is where the reward for mining blocks is halved, meaning that less BTC is being created and introduced into the market.
- Secondly, due to the coronavirus pandemic, central banks like the US Federal Reserve, have been printing more money to stimulate the economy. So much so that approximately one-fifth of US dollars were printed in 2020. This has meant that the US dollar has declined in value.
- Thirdly, as a result of the two points above, financial institutions are starting to realise that Bitcoin holds value better than gold as it is the only asset with a fixed amount that will ever exist (not even gold can claim that!).
Elsewhere, in January 2021, JPMorgan, the bank that once called Bitcoin a scam, now expects BTC to reach $146,000. And looking further ahead, the Winklevoss twins believe Bitcoin will eventually reach $500,000 per coin in the next decade and then surpass the gold market cap, which is supposedly between $10 and $11 trillion at the time of writing.
So, is Bitcoin your next cryptocurrency to invest in 2021? Most likely yes. Many experts think Bitcoin could be one of the best cryptocurrencies to invest in 2021. Here’s what price forecasters think for 2021:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| Trading Beasts | $2.57774 | $3.85996 |
| The Economy Forecast Agency | $4.07 | $7.47 |
| WalletInvestor | $3.395 | $8.303 |
| DigitalCoin | $5.28 | $7.54 |
| Coin Price Forecast | $7.33 | $7.49 |
Would you invest in Bitcoin (BTC)?
2. Ethereum (ETH) — The lifeblood of DeFi will have a major update in 2021
If Bitcoin is the King of Cryptocurrency, then Ethereum could well be their heir! Ethereum is the biggest cryptocurrency other than Bitcoin and has maintained a strong market cap ever since its release in 2015, and it is often a new trader’s second choice after investing in Bitcoin.
If you’re looking for top cryptocurrencies to invest in 2021, Ethereum should be a serious contender, forging a new all-time high (ATH) of $4,362.35 in May, more than twice as high as it reached in the 2017 bull run, and is managing to retain a lot of that value.
To many, Ethereum is more important to the crypto market than even Bitcoin. Why? Because its blockchain is the mother of so many other projects — several of which are also present in this list as ERC-20 tokens (some have since left Ethereum).
What this means is that all these projects have created an ecosystem where Ether is constantly in use, and so, the more dApps built on top of Ethereum’s blockchain, the more Ether grows with it.
More recently though, one of the biggest factors in Ethereum’s growth is decentralised finance (otherwise known as DeFi). The Ethereum platform supports many of the cryptos which are driving the DeFi sector, such as Chainlink (LINK), Wrapped Bitcoin (WBTC), and Maker (MKR).
The DeFi market has become a behemoth in 2021 with Ethereum sitting right in the middle of it. Ethereum has processed $13.5 billion worth of decentralised exchanges in 2020 alone — up from under $3 billion in 2019!
The second factor which secures Ethereum’s place on our list of top cryptocurrencies to invest in 2021 is the launch of Ethereum 2.0. This eagerly awaited upgrade is due to be completed by the end of 2021 and will make Ethereum far more efficient by moving from proof-of-work to proof-of-stake.
Once it’s able to process more transactions more quickly, cheaply, and efficiently, we could see its price explode. Do note though that the update is being rolled out in stages, and so no one is 100% sure when it will be completed.
Here’s what forecasters believe could happen to the price of Ethereum in 2021:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $3,019.110 | $4,269.040 |
| The Economy Forecast Agency | $2,996 | $5,320 |
| Coinskid | $3,043.87 | $5,834.72 |
| Coin Price Forecast | $2,276 | $4,673 |
| Price Prediction | $3,827.26 | $4,234.76 |
How much would you invest in Ethereum (ETH)?
3. Solana (SOL) — NFT explosion takes SOL to the top!
Everyone’s going to be talking about Solana very soon, so get ahead of the crowd!
Solana stands out because of its ‘proof-of-history’ consensus algorithm which works in conjunction with an underlying proof-of-stake algorithm. Supposedly, this makes Solana lightning-fast and ideal for smart contracts, dApps and DeFi projects.
Interestingly, much of Solana’s ascent to the top took place after the bull run that ended in May, when it reached its first major milestone of $50. Then in September, Solana smashed that milestone four-fold, reaching $200, and it looks like it’s holding onto much of that progress.
This considerable spike in price is largely credited to Solana’s flourishing NFT market, which launched recently, as reported by Euronews.
But not all is rosy in sunny Solana land. There are, of course, causes for concern too. In September 2021, Solana suffered a 24-hour outage, affecting thousands of users and halting transactions, and supposedly more work is required to ensure stability.
Though prices didn’t suffer too badly, it is extremely worrying that Solana could face such an outage and raises concerns over its security and if it is ready to be used.
Here’s what forecasters believe could happen to the price of Solana in 2021:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $144.237 | $216.839 |
| The Economy Forecast Agency | $106 | $343 |
| Coinskid | $113.10 | $160.90 |
| Coin Price Forecast | $36 | $487 |
| Price Prediction | $179.02 | $188.94 |
Do you also think Solana (SOL) is a good investment?
4. Cardano (ADA) — From zero to hero, is ADA the most improved coin of 2021?
Excitement about Cardano has been fizzing throughout 2021 as it solidified itself as one of the most desirable cryptocurrencies to own.
One of the key factors behind Cardano’s growth is the release of Hydra — a layer two scalability solution that promises to give the Cardano network the power to process more than 1 million transactions every second. Plus, other upgrades and hard forks have introduced features like asset tokenisation.
Many were concerned that hype around Cardano was all words — promises for this and that. And that scared off many investors. But now that Cardano has delivered on smart contracts (the most important feature for everything to work), we may see investors’ interest pique.
That said, we are yet to see the surge we anticipated, so it may still take some big partners to move in and start using Cardano’s smart contracts before we see a bump in value.
Aside from this, there are some concerns over the amount of ADA that is currently staked. According to data from Staking Rewards, ADA is one of the most staked cryptocurrencies, and it has been suggested by some that this may be creating an artificial sense of scarcity.
Here’s what forecasters believe could happen to the price of Cardano (ADA) in 2021:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $2.259 | $3.303 |
| The Economy Forecast Agency | $1.84 | $3.10 |
| Coinskid | $1.78 | $2.90 |
| Coin Price Forecast | $1.38 | $3.35 |
| Price Prediction | $2.73 | $2.83 |
Will Cardano (ADA) make you richer?
5. Ripple XRP (XRP) — More than just a comeback, we might just see a rampage
Did you know that Ripple XRP was the best cryptocurrency to invest in 2017 with a growth of about 36,000%?
Bitcoin vs Ripple XRP price growth, 2017. Source: qz.com
Ripple, one of the more interesting cryptocurrencies to invest in 2021, is the catch-all name to describe the Ripple platform (RippleNet), the company behind its development (Ripple Labs), and its virtual currency (XRP).
Fortunately or unfortunately (depending on how you look at it), Ripple got into a bit of trouble with the US Securities and Exchange Commission (SEC) in late 2020 which hit the price of XRP quite hard.
It resulted in XRP dropping from the third-largest crypto by market cap to sixth.
But here’s the good news — despite the blow, Ripple has recovered pretty well and though it might be a bit late to the party, it is trading at a higher price now than for most of its existence.
While the legal case with the SEC might continue throughout much of 2021 (they are suing Ripple for a bit more than $1 billion and claim that they are a security, not a cryptocurrency despite overwhelming evidence they’re wrong), many are pretty optimistic that they will win and if they do, the price of XRP will likely shoot up.
However, crypto traders should also be on the lookout for Stellar Lumens (XLM) gaining on Ripple. The two are like twin brothers split at birth with a fair degree of rivalry between them. They both have a similar approach to cryptocurrency and similar goals, and if Ripple hodlers get too worried, they may switch sides.
And if you’re planning to invest, it could be sensible to start soon. Although the price of Ripple isn’t going to reach the stratospheric prices of Bitcoin, it does look set for a price increase in 2021.
According to some cryptocurrency predictions, Ripple is likely to increase steadily throughout the year, reaching potential highs of $2.94 by December.
Prices above $2 might not last long though. The same predictions have placed Ripple’s price at $1.72 by the end of 2022, so one investment strategy could be to buy Ripple to sell it before the price slips from its all-time high.
Let’s see what price forecasters are saying today:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $0.776 | $1.783 |
| The Economy Forecast Agency | $0.83 | $1.42 |
| Coinskid | $1.05 | $1.44 |
| Coin Price Forecast | $0.71 | $1.14 |
| Price Prediction | $1.21 | $1.32 |
Is Ripple XRP (XRP) worthy of your portfolio?
6. Dogecoin (DOGE) — Elon Musk’s favourite new plaything
Our list of what is the top cryptocurrency to invest in 2021 cannot be complete without Dogecoin. It showed strong performance in 2021 with a growth of more than 7,000%.
Elon Musk is simultaneously the best and worst reason to invest in Dogecoin. Why? It all has to do with adoption.
Adoption is one of the most important factors in cryptocurrency prices. The more people jump on a crypto — generally speaking — the pricier it becomes (and safer, too).
And what better way to spread the word than via an eccentric billionaire? Musk is one of DOGE’s most well-known fans and loves to tweet about DOGE to his 59.9 million followers.
His love of Dogecoin has led him to do some ridiculous things. Like SpaceX announcing their intention to launch digital billboards in space, which can be paid for… in Dogecoin, of course.
But the other side to this double-edged sword is that Musk is very erratic. When Tesla dropped Bitcoin earlier in the year, it crushed the market. He is insanely influential and he’s not afraid to yield that influence, whoever it might harm.
All this aside, Dogecoin, despite its silly nature, has a very loyal following that could serve it well in months and years to come. In the worst-case scenario, Dogecoin may be only a good short-term investment, if you can master its volatile swings.
What do price forecasters think of Dogecoin (DOGE)?
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $0.194 | $0.367 |
| The Economy Forecast Agency | $0.18 | $0.32 |
| Coinskid | $0.2155 | $0.4446 |
| Coin Price Forecast | $0.25 | $0.32 |
| Price Prediction | $0.27 | $0.29 |
How much could you make investing in Dogecoin (DOGE)?
7. Terra (LUNA) — Is LUNA shooting to the Moon?
Perhaps one of the least-known cryptos on this list, Terra, with its LUNA token, is slowly emerging out of the shadows as a major player.
Terra’s primary purpose is to support an ecosystem of fiat-pegged stablecoins, and LUNA is the governance token that enables users to vote on proposals. On top of that, LUNA can also be used to stabilise the price of stablecoins too.
Terra is similar to Solana in the sense that they are both relatively new to less-informed crypto traders, are proof-of-stake, and much of the value they have acquired is recent, occurring after the major bull run that crashed in mid-May 2021.
According to Jon Quast of The Motley Fool, LUNA leapt in price in August after Coinbase Pro listed two of Terra’s other coins — the Wrapped Luna Token (WLUNA) and TerraUSD (UST).
But don’t think everyone’s bullish on Terra just yet. As one of the youngest coins on this list, some caution is advised.
On top of that, many crypto enthusiasts care little for stablecoins, which can potentially be used to manipulate the price of other cryptos (as some have accused of Tether) and are not fully detached from the old fiat system crypto seeks to destroy.
Here’s what forecasters believe could happen to the price of Terra in 2021:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $30.126 | $42.374 |
| The Economy Forecast Agency | $27.82 | $65.54 |
| Coinskid | $34.90 | $55.59 |
| Coin Price Forecast | $6.56 | $140.95 |
| Price Prediction | $40.03 | $42.97 |
Would you invest in Terra (Luna) in 2021?
8. Algorand (ALGO) — The smartest crypto on the block?
Algorand is perhaps one of the most prestigious cryptos on this list created by MIT computer science professor Silvio Micali who has been awarded a Turing Award for his contributions to blockchain technology and cryptocurrency.
It is notable at this point that a trend appears to be emerging in the crypto market where investors appear to be losing interest in proof-of-work cryptocurrencies and investing more in variations of proof-of-stake, like Algorand, which is considered a ‘permissionless pure proof-of-stake’ crypto.
This can be seen in how formerly popular proof-of-work cryptos failed to meet their ATH’s in 2021’s bull run, such as Bitcoin Cash (BCH), Dash (DASH), Litecoin (LTC), etc.
Jon Quast of The Motley Fool appears to have uncovered why Algorand has been doing so well recently. He believes it relates to El Salvador making BTC legal tender. After this happened, a company named Koibanx approached the government and offered further blockchain solutions. Their proposal was accepted and Koibanx chose Algorand for the project.
Despite all the good stuff we love about Algorand, there is one simple problem that has to be raised: is it interesting enough for investors? While it claims that it can solve many problems and is more efficient (as so many other cryptos claim!), is that enough to get investors to part with their money?
Furthermore, looking at the charts, some would say investing in ALGO would be purely insane, with the asset essentially spending much of its life trying to get back to the highs it started with.
Here’s what forecasters believe could happen to the price of Algorand in 2021:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $1.778 | $2.576 |
| The Economy Forecast Agency | $1.06 | $3.36 |
| Coinskid | $1.70 | $2.76 |
| Coin Price Forecast | $0.88 | $3.93 |
| Price Prediction | $2.15 | $2.38 |
Ready to invest in Algorand (ALGO)?
9. Binance Coin (BNB) — Stealing Ethereum’s DeFi thunder with the BSC?
There is a lot to say about Binance and Binance Coin. Known largely for being the biggest crypto exchange, they’re also involved in staking, mining and, more recently, DeFi.
To speak plainly, BNB wasn’t very interesting before 2021. Mostly known as a discount token to pay for trading fees on the Binance Exchange, BNB caused a stir when the Binance Smart Chain (BSC) was launched.
The BSC is now one of the top chains for DeFi projects and it uses BNB as fuel for smart contracts in the same way that Ether is used on Ethereum as gas.
In fact, BSC has emerged as one of the best alternative chains to the Ethereum network because it’s much cheaper to use for developers. This is almost entirely because of Ethereum’s dramatic rise in gas fees in early 2021. Though prices returned to normal, price volatility is not desirable when you’re building a dApp.
Though Binance Coin is one of the best performers of 2021 (its returns have been huge!), we’re placing it lower on our list because the regulatory environment has recently become very hostile to Binance, which could impact the price of BNB.
BNB also is disliked by some crypto enthusiasts because it is heavily centralised with Binance owning approximately 80% of all tokens, according to data from Etherscan. This gives them the power to effectively vote for whoever they want to be a validator on their network.
Here’s what forecasters believe could happen to the price of Binance Coin (BNB) in 2021:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $349.299 | $561.911 |
| The Economy Forecast Agency | $332 | $595 |
| Coinskid | $370.48 | $596.10 |
| Coin Price Forecast | $304 | $504 |
| Price Prediction | $458.90 | $507.34 |
Is Binance Coin (BNB) the moneymaker you’re looking for?
10. Uniswap (UNI) — The future of crypto trading?
If you only invest in one DeFi crypto in 2021, it should be Uniswap, the largest DeFi project (by market cap) and most successful DEX (decentralised exchange).
Uniswap is a threat to not only crypto exchanges like Binance, Kraken and Coinbase but any financial institution that facilitates trades. During the height of the 2021 bull run, Uniswap had a total locked value of over $8 billion, according to DeFi Pulse.
One of the most exciting things Uniswap has to offer is its ability to tokenise any asset. This means financial instruments like stocks could be tokenised and traded between individuals.
However, Uniswap has to contend with a variety of other DEXs attempting to do the same thing. While Uniswap is one of the more established, that doesn’t make it perfect.
DEXs have a great deal of potential in the next few years, but it must also be highlighted that they currently exist in a very grey legal area for the time being. DEXs could come under immense regulatory scrutiny in the future which could tank the price of UNI.
This is especially true if, like Uniswap, DEXs offer the ability to digitalise any asset. In the eyes of regulators, this could look like a move to manipulate the market.
Here’s what forecasters believe could happen to the price of Uniswap (UNI) in 2021:
| Price Forecaster | Lowest Price | Highest Price |
|---|---|---|
| WalletInvestor | $12.684 | $42.857 |
| The Economy Forecast Agency | $20.48 | $43.35 |
| Coinskid | $19.73 | $33.16 |
| Coin Price Forecast | $19.27 | $27.69 |
| Price Prediction | $27.90 | $29.96 |
Could you make your riches with Uniswap (UNI)?
Want to Start Investing in the Top 10 Cryptocurrencies?
Now you know the top cryptocurrencies to invest in 2021, you’ve got a solid foundation to start your cryptocurrency investing. The next step is to find a reputable cryptocurrency broker.
Whether you’ve invested in cryptos before or are just breaking into this form of investment, its user-friendly service is a great way to compare cryptocurrencies and start trading today.
Whether you’ve traded cryptos before or are just breaking into this form of investment, its user-friendly service is a great way to compare currencies and start trading today.
On the multi-asset platform eToro, you can start investing in all of the top 10 cryptocurrencies that are mentioned on this list.
If you are a crypto beginner who’s looking for the best cryptocurrency exchanges in 2021, eToro’s innovative CopyTrader feature could provide you with some valuable insights into the best cryptocurrency trading strategies.
This functionality enables you to watch the actions of experienced investors in real-time, and then automatically copies their decisions. It’s a great way to try out different strategies before finding the winning formula for you.
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Remember, though, that even the best cryptocurrencies aren’t guaranteed to make you a profit. It’s vital to do your due diligence and find a robust risk management strategy before you start to trade on your chosen cryptocurrency exchange.
If you want to discover the top 10 cryptocurrencies to invest in for 2021, it’s not enough just to Google ‘what is the best cryptocurrency?’ You’ll also need to find the best cryptocurrency trading strategy for you.
Trading is certainly the answer when it comes to investing in cryptocurrencies, the market has grown to a position where traders are offered the best ways to make profits, including margin trading, shorting and the use of traditional strategies.
Although there’s no such thing as a perfect trading strategy, different tactics work for different people. Here are some key things to consider when choosing your cryptocurrency strategy:
- Which cryptocurrencies are you planning to invest in?
- Do your chosen cryptocurrencies tend to fluctuate at particular times?
- How much time can you spend monitoring the cryptocurrency market?
- What are your ultimate cryptocurrency trading goals?
Once you’ve got the answers to these questions, you’ll be in a much stronger position to find the best cryptocurrency trading strategy for you. (You may need to experiment with a few different strategies at first.)
Whether you’d like to make quick-fire decisions or prefer to play the long game, let’s take a look at some of the most popular cryptocurrency trading strategies for 2021.
Long-term cryptocurrency investment strategies
As its name suggests, long-term cryptocurrency investment strategies are ones where you expect the value of your chosen asset to improve better in the long run. Rather than cashing in on sudden price fluctuations throughout the day, long-term strategies rely on careful planning and self-control.
A long-term investment is generally given a time frame of between one and two years. However, some traders can choose to hold their investments for up to a decade or even more.
You can choose whether you want to pledge your full investment at the start of this period or invest varying amounts over a length of time.
If you’re wondering whether a long-term cryptocurrency investment strategy is for you, here are some of the factors which could help you decide:
- How do you expect your chosen cryptocurrency to perform over the next year?
- What unexpected events could make you want to sell your asset? How likely are these events to happen? (Consider new regulations, potential breakout competitors, and the scalability of its technology.)
- Are you happy to hold an investment without watching the market all the time?
There are many benefits to choosing a long-term investment strategy, but it’s not the right plan for everyone.
Often, they are best suited to investors who have day jobs or other demands on their time which mean they aren’t planning to monitor the market on a minute-by-minute basis.
Long-term investment strategies can also be effective if you’re investing in a crypto that you truly believe in.
As an example, let’s say you think the best cryptocurrency for 2021 will be Bitcoin (BTC). You carry out your due diligence and, in the process, discover that the crypto is filling a huge gap in the market, there are compelling plans for the future, and developers have recently added some new capabilities.
This means you have good reason to believe that Bitcoin will become more valuable in the long run. Strong cryptos will be able to weather short-term fluctuations without abandoning their general upward trajectory.
Long-term strategies might not be suitable for cryptos that are going up and down a lot. In such cases, it might make more sense to buy whenever the price is low and sell high, which is more like short-term trading (more on that below).
Also, if you’re in it for the long-term, remember to take profits here and there. This can reduce risk and make sure you have some profit on the side if the crypto depreciates. You can also increase your position during dips or if you feel the crypto stands a chance of doing particularly well.
If you believe an asset will perform better over time, finding a long-term trading strategy could be a smart move.
Short-Term Cryptocurrency Investment Strategies
A short-term cryptocurrency investment strategy is one that theoretically enables you to make quick wins. The definition of short-term can be broad — anything which lasts from a couple of months right down to a couple of seconds is often described as short-term, with the precise time frame depending on various factors.
These strategies are designed around the principle of cashing in on price fluctuations, rather than because you expect a cryptocurrency to grow over time.
Most cryptocurrencies are incredibly volatile. Bitcoin has haemorrhaged value several times in the past, which while initially sounds terrifying, also provides an excellent entry point to the market, something long-term traders are less likely to benefit from.
Could a short-term cryptocurrency investment strategy be the right decision for you? These are some of the key factors to consider before taking the plunge:
- Losses are always a probability when investing in cryptocurrency, even if you choose one of the top cryptocurrencies to invest in 2021. How much of a loss can you accept?
- Do you have enough time to monitor the crypto markets on a very regular basis and respond to price fluctuations instantly?
- Will a short-term strategy yield greater potential profits than a long-term strategy for your chosen assets?
- Are you familiar with technical analysis? This is a good idea if you’re planning to start using a short-term strategy, so you should familiarise yourself with it before you begin.
- How much, and how often, has the price of your chosen crypto fluctuated in the past?
Short-term investment strategies can be potentially fruitful if they suit both your lifestyle and your chosen assets.
They are particularly suited to cryptocurrencies which have a low market cap but a high trading volume. This means that lots of traders are currently buying and selling, which will keep the price moving.
It can also be a good strategy if the cryptocurrency has recently been in the news — even if it’s not one of the top cryptocurrencies to invest in 2021.
When the Financial Conduct Authority (FCA) carried out a study to see how many people in the UK had heard of different cryptocurrencies in 2020 and 2021, the results were telling.
Unsurprisingly, Bitcoin came out on top, with 78% of respondents reporting that they had heard of the crypto (82% in 2021). But the next most widely recognised, which just 22% of respondents had heard of, was Facebook’s Libra (now rebranded as ‘Diem’).
And though we can see from the chart above that Libra/Diem lost a lot of awareness in 2021, it still highlights how media coverage is super important to the popularity of a crypto and is perhaps more important than its actual price or market cap.
Other cryptocurrencies which are well-suited to short-term investment strategies are those that are available via an initial coin offering (ICO).
Investors can usually secure these cryptos at a very low price, which is almost certain to fluctuate as interest in the ‘next cryptocurrency on the market’ starts to grow.
Investing in a cryptocurrency at the start of its launch isn’t necessarily a good idea for a long-term investment strategy unless you’re an experienced investor who truly believes that the crypto will do well (and has a diversified investment portfolio to minimise the risk).
However, if you’re simply looking to take advantage of quick-fire fluctuations, it could be a smart short-term investment strategy.
Read More: How to Identify Cryptocurrency and ICO Scams
There are, of course, some disadvantages to short-term cryptocurrency investment strategies. You should be aware of these before embarking on any short-term trading plan:
- They require you to be able to monitor the market on a moment-by-moment basis. This makes them unsuitable for anyone who isn’t planning to become a full-time investor.
- It’s a riskier strategy than long-term cryptocurrency investing strategies.
- It can be incredibly stressful! Making investment decisions when you’re feeling emotional can lead to impulsive actions which potentially ruin an otherwise well thought out strategy. If you do decide to choose a short-term trading strategy, make sure that you always prepare for the worst and feel confident controlling your emotions.
How To Buy Cryptocurrencies With eToro?
You can start trading cryptocurrencies with eToro in three quick steps. It’s never been easier.
Step 1. Go to eToro’s website, click ‘Join Now’ in the top right corner, and fill out the registration form. Note that you’ll need to upload some proof of ID and address — this is to comply with anti-money laundering laws and counter fraud.
Step 2. Make your first-time deposit. In most countries, this will either be the equivalent of $200 or $50, but in several countries, the first-time deposit is significantly higher, so check before signing up!
Step 3. On eToro’s platform, go to ‘Trade Markets’ → ‘Crypto’ and then choose the cryptocurrency you want to invest in, and choose your terms.
Hazzah! You’re now invested in the crypto market!
What’s Next For The Cryptocurrency Market In 2021?
When Bitcoin launched in 2009, the idea of digital currency was dismissed as a fad.
Fast-forward to 2021, and there are now supposedly more than 11,000 different cryptocurrencies with a combined market cap of well over $2 trillion (Bitcoin alone makes up approximately 40% of this).
With 82% of UK respondents telling the FCA that they had heard of Bitcoin and up to 46 Americans owning Bitcoin — or 17% of the adult population — according to an article published by Nasdaq, it’s obvious that cryptos are rapidly entering the mainstream.
Although you shouldn’t expect cryptocurrency to become the world’s preferred payment method of choice just yet. While it’s undeniable that adoption is growing, we still have a long way to go.
More online businesses are starting to accept payment in some of the top cryptocurrencies, and we’ve even seen the establishment of crypto ATMs in our shopping centres and streets.
Read More: Most Popular Cryptocurrencies In The USA
As the demand for DeFi and dApps grows, it’s understandable that some experts are predicting that 2021 will be ‘the year of crypto’. If this is the case, it will have some tough competition.
2017 is still regarded by some as the most crypto-friendly year so far — it saw the launch of thousands of new cryptocurrencies around the world, causing the total market cap to explode by 4,000%!
Best Cryptocurrency To Invest In 2021 — Key Points
There are many opportunities to invest in cryptocurrencies in 2021, but what has become clear this year is that it is worth examining the best possible projects and coins. Below are the top key points for investing in cryptocurrency in 2021.
- 2021 is being heralded by some experts as ‘The Year of Cryptocurrency’.
- Bitcoin is the top cryptocurrency to invest in 2021, with prices potentially hitting $140,000, according to some predictions.
- The growth of DeFi (Decentralised Finance) is driving interest in cryptos such as Ethereum.
- Choosing which top cryptocurrencies to invest in 2021 will depend on your appetite for risk, with options such as Solana and Terra offering potential benefits to more experienced crypto investors.
- It’s important to find the right trading strategy for you and your schedule.
- Timing is everything when it comes to successful cryptocurrency investing (you need to pinpoint the best moments to get in and out).
- Long-term cryptocurrency investment strategies can be a good choice for cryptos on the up.
- If you believe your chosen investment will perform well over time, you could be suited to a long-term strategy.
- Short-term cryptocurrency investment strategies are designed to cash in on rapid price fluctuations.
- Though short-term strategies can be riskier than long-term strategies and require you to monitor the market constantly.
Investing in any of these top cryptocurrencies now is an idea worth giving proper consideration. Forecasts are promising for all of them to a different extent and investing in crypto has never been easier.
We hope our list of the top cryptocurrencies to invest in 2021 has been helpful. Whatever your investing strategy, keeping track of current trends and predictions is the best way to build a strong portfolio full of the best cryptocurrencies in 2021.
To recap, our top 10 Cryptocurrencies to invest in 2021:
- Bitcoin (BTC)
- Ethereum (ETH)
- Solana (SOL)
- Cardano (ADA)
- Ripple XRP (XRP)
- Dogecoin (DOGE)
- Terra (LUNA)
- Algorand (ALGO)
- Binance Coin (BNB)
- Uniswap (UNI)
Have you ever invested in crypto assets before? How did it go and did you get the returns you hoped for?
FAQs
Is Cryptocurrency A Good Investment In 2021?
Cryptocurrency investing in 2021 is both highly risky and highly rewarding. While there is no guarantee of making a return, cryptocurrencies have outperformed many other financial instruments in 2021.
Many crypto enthusiasts believe that 2021 could be the best year for cryptocurrency yet. However, if you decide to invest, always do your due diligence before investing in the top cryptocurrencies for 2021.
How To Find The Best Cryptocurrency To Invest In?
To find the best cryptocurrency to invest in, you need to become familiar with researching trends, identifying what the market wants and develop expertise in what could make or break a crypto. Staying ahead of the game will help you identify breakout cryptos, secure them while their price is low, and hopefully sell them on for a profit.
Whatever you do, don’t just stick to the top 10 cryptocurrencies by market cap. There’s so much more going on than just those few coins! And don’t blindly follow price predictions!
Which Cryptocurrency Is Growing The Fastest?
So far Bitcoin has grown the most in 2021. Aside from Bitcoin, though, Cardano is a clear winner of recent, jumping several spots to become the third-largest by market cap.
What’s Next For Bitcoin? Will Bitcoin Crash Again?
As institutional money continues to get funnelled into BTC, it will likely continue to appreciate. There will be volatile spells, but we could also see more stability in the coming years as the crypto market matures.
As Bitcoin is particularly volatile it’s impossible to predict its future with certainty. Of course, there inevitably will be other crashes, but it is probably not something you need to be immediately worried about.
What Is The Best Cryptocurrency?
Bitcoin consistently tops lists as the best and most successful cryptocurrency. It has the largest market cap and the most investors around the world.
However, the answer to this question depends on how you define ‘best’. Some traders believe that Bitcoin is unsustainable and alternatives such as Bitcoin Cash (BCH) will make a better long-term investment.
How Does Cryptocurrency Trading Work?
Cryptocurrency trading is the act of buying and selling your chosen cryptocurrency to profit from its price fluctuations. To trade cryptocurrency, you need to buy and sell on an exchange, using crypto stored in your digital wallet.
What Are The Different Types Of Cryptocurrencies?
Cryptocurrencies can be divided into different groups in several different ways.
Some like to divide them based on the ‘generation’ they belong to. For example, Bitcoin, as the first crypto, is a first-generation cryptocurrency. Ethereum, which came a few years later, is a second-generation, and everything that followed Ethereum is classified as the third-generation.
We can also divide them based on if they use proof-of-work, proof-of-stake, or another algorithm for securing the blockchain.
And finally, we can group them by their use. E.g., Zcash (ZEC) is a privacy coin as it focuses on anonymity. Monero (XMR) and Dash also fall into this category.
Other categorisations include utility tokens such as Binance Coin and stablecoins like USD Coin (created by the Coinbase exchange) or Tether (USDT), governance tokens for voting like Tezos (XTZ), and tokens that act as fuel for smart contracts, like Ether.
How Can You Analyse The Crypto Market? What’s The Best Way?
The primary ways to analyse the crypto market include technical and fundamental analysis. Either way, you must learn to read charts and analyse historical prices.
Further to that, you’ll also have to learn everything you possibly can on your chosen crypto and keep yourself informed by following the news and joining groups such as those on Reddit where they can be discussed.
The more you know, the better you will be able to assess the value of cryptocurrencies and set appropriate goals.
If you’re feeling inspired to start investing in cryptocurrency, you may be pleased to know that eToro provides the ability to buy crypto assets on over 90 cryptocurrency pairs. Crypto traders can build a diversified portfolio with the most popular coins.
Disclaimer: Cryptocurrencies are highly volatile. Your capital is at risk and Past performance is not an indication of future results.
Further Reading:
Top Cryptocurrencies and Their Challenges