Before learning about the best cryptocurrencies to invest, let us first get a close understanding of what cryptocurrencies are? Cryptocurrency is considered to be an amalgamation of binary data designed to operate as a medium of exchange through computerised database and strong cryptography to control, verify and secure transactions. They work as an asset and are generally stored in digital wallets through which an user can maintain and manage their trade coins.
Is cryptocurrency good for long term investment?
If you want to directly access the demand for digital currency, then cryptocurrency is a good investment. However, a safer option than crypto can possibly be buying stocks of companies having exposure to cryptocurrencies. Although it is important to note that this will be less profitable. There are several cryptocurrencies including Bitcoin and Ethereum which were launched with hefty amount of goals, which were to be achieved over the longer period of time. Although the success of any crypto project cannot be guaranteed, if the crypto project achieves its goals, in the long term, the early investors can be rewarded handsomely. However, for any crypto project to be successful in the long term, it must achieve widespread adoption.
Should you invest in cryptocurrency?
Having some cryptocurrencies in your pocket can increase the diversification of your investment portfolio, because cryptocurrencies like Bitcoin have historically had little price correlation with the US stock market. If you think the use of cryptocurrency will become more common over time, then it may make sense for you to directly buy some cryptocurrencies as part of a diversified investment portfolio.
What are the top cryptocurrencies to invest in 2021?
1. Bitcoin (BTC)
The arrival of Bitcoin in the market in 2009 marked the onset of the revolutionary change in the world of currency which opened doors for multiple alterations in its technology. After approximately 12 years of its existence, Bitcoin has compounded it’s advantage, causing the market to surge beyond $1 trillion. As the leading “blue chip” cryptocurrency, Bitcoin has not only been time-tested, but also has set new milestones; a prime example of it being Tesla which decided to include Bitcoin on its balance sheet. In addition to that, El Salvador has also recognised it and legalized it’s formal use across the country.
2. Ethereum (ETH)
Despite Bitcoin being the leading cryptocurrency since the beginning, yet, Ethereum has emerged as a force to be reckoned with from 2015 which is considered to be a top-class crypto. Ethereum’s market share in the emerging and fast-growing field of decentralized finance has caused digital currencies to gradually erode Bitcoin’s share of the entire crypto market. For instance, in early 2021, Bitcoin accounted for 70.7% of the market, while Ethereum only accounted for 10.8%. However, in today’s market, the gap between both has largely narrowed, with BTC at 45.1% and ETH at 18% highlighting the growing attributes of ETH and it’s rightful potential for future sustainability.
3. Solana (SOL)
Being a top gainer in 2021, Solana has quickly acquired the market with 0.01% in the market and has been placed top among the 10 best cryptocurrency by market capitalisation. Following the path of Ethereum, Solana has become a leader in DeFi; it is where the users can form their decentralized applications in order to connect financial gatekeepers like brokers, exchanges, banks and clearing houses. It is important to note that Solana’s price increased about 100 times in 2021 alone, from US $ 1.51 to more than US $ 160.
4. Cardano (ADA)
Even though Cardano does not fall in completion with Bitcoin or Ethereum alliance, yet, it has emerged as a mandatory nominee to buy the best cryptocurrency. In terms of market capitalization, it is the third largest market after Bitcoin and Ethereum and is equally younger than both. The first ADA or the local currency unit of Cardano appeared in September 2017. In comparison to other cryptocurrencies, Cardano’s most efficient difference is that it uses a proof-of-stake protocol to incentivize users to create new blocks. Several experts have estimated that the energy efficiency of this process is 20,000 times greater than that of the Bitcoin proof-of-work algorithm.
5. Binance Coin (BNB)
Over the recent years, Binance Coin has emerged as the largest cryptocurrency exchange in terms of trading volume. It was originally based on the model of token issued with the channel of Ethereum blockchain, however, was later changed as it adopted it’s own blockchain technology. Since the first token issuance in 2017, the price of BNB has skyrocketed from 10 cents to around $415. In 2021 alone, the token has risen roughly by 1,000%.
