The Best Cryptocurrencies to Invest in 2021
Over the past four years, the total value of the crypto market has risen dramatically from $100 billion to $1.7 trillion, representing an annualized return of 103%.
Of course, it hasn’t been very smooth… The market crashed in 2018, dropping by 65% in just one month. That cycle repeated itself in 2021, but this time the market plunged by 50% in just 12 days, erasing over $1.2 trillion in value.
Despite that unpredictability, many investors still want crypto in their portfolios, but not everyone has the same risk tolerance. So here we have inserted four different ways to invest in cryptocurrency with varying levels of risk.
In the financial field, a topic that has aroused a lot of interest in recent years is certainly Bitcoin , a cryptocurrency that has acquired a lot of relevance given the enormous value it has matured in just a few years, rising from 500 to over 34,000 euros at the beginning of 2021.
What is Bitcoin and What are Cryptocurrencies
The Bitcoin is a cryptocurrency also called crittovaluta or criptomoneta founded in 2009 by Satoshi Nakamoto, fictitious name of a developer of which still do not know ‘true identity.
The cryptocurrency is in other words a digital currency, used to make payments as well as any traditional currency, such as the EURO, but in order to be safe, having regard to its digital nature, is encrypted.
By encryption we mean all those techniques that allow you to “encrypt / disguise” a message or in this case digital data, making them incomprehensible to everyone except those who encrypted it and who is given the key to decrypt them.
Encryption is used for 2 reasons:
- To guarantee and validate transactions (i.e. make payments online safely)
- To create / generate new currency, in this case new bitcoin, this is called Mining and is performed by Miner (Miner).
Bitcoion is not only the most famous and precious cryptocurrency, but also the first to be born and therefore to be appreciated in recent years for its countless advantages compared to classic government currencies such as the Euro. Following the Bitcoin, hundreds of new alternative cryptocurrencies (altcoins – Alternative Coins) were born due to the fact that some aspects of Bitcoin could be improved.
Bitcoins are unregulated currencies, where there is no intermediary authority such as banks or financial institutions and are considered the future of the economy.
Being totally decentralized and not controlled by any government, they are much feared and somehow trying to hinder them despite the great success and approval of many financial analysts. The current capitalization is around 70 billion dollars, a huge figure with which to understand its extent.
10 Best Cryptocurrencies To Invest in for 2021
To be able to invest your money safely, it may be a good idea to take a look at the cryptocurrencies with the highest volume of investments or with the highest growth margins, so that you can immediately invest wisely. Obviously there is no certainty of earning, but it can be a good start to focus only on the cryptocurrencies reported below.
The queen of all cryptocurrencies is undoubtedly Bitcoin , which in fact has “opened the dance” in the sector, taking over time to such high prices as to make all investors dizzy. Most of the users who now hear about Bitcoin have not taken the opportunity to buy some units at the beginning: the period in which it was possible to obtain many units of this cryptocurrency with a very low investment is now far away.
Nowadays, Bitcoin is really worth a lot and it is not known if the bubble will continue to grow or will burst out of the blue: buying a single unit (therefore 1 Bitcoin) requires a really large investment portfolio.
Trying to mine Bitcoin independently (to increase the computing power of the blockchain) is practically impossible today: entire server farms are needed to generate a single Bitcoin, without counting the costs of electricity and maintenance of the infrastructure. For those who want to invest it may be a good idea to trade on Bitcoin , given its high volatility: we can therefore place investments on the rise or fall of the price and generate good earnings, especially if we are already experts in the sector.
Another cryptocurrency on which it is possible to invest is Ethereum , which can boast a good profit margin both for those who decide to buy it and for those who want to trade. The coin was born in 2015 so it has not yet completely exhausted the novelty effect, especially considering the prices it has reached (in the wake of Bitcoin): it can be a good investment in the medium term, while the long-term volatility has to be assessed. period. Ethereum is also the name of the open peer-to-peer blockchain, which can also be used for other cryptocurrencies: they can exploit the technological infrastructure of Ethereum to be able to generate new money.
Today it becomes more and more difficult to mine Ethereum profitably, especially for those with limited IT resources; on the other hand it still remains one of the best cryptocurrencies for those who want to trade or for those who want to buy some units waiting for a marked increase in market value.
Among the currencies that have impressed investors the most are Binance Coin , the official cryptocurrency of the Binance portal (one of the most famous for the cryptocurrency exchange). Made in July 2017 and available to everyone in the autumn of the same year, it boasts good volatility being much younger than the most famous cryptocurrencies such as Bitcoin and Ethereum. It leverages the Ethereum blockchain, so it rests on a solid and secure foundation when traded or bought.
Obviously this coin can be purchased on the Binance website, but more and more trading operators allow you to invest money on the growth or decrease of the price of the Binance Coin, so as to be able to diversify investments in cryptocurrencies to the maximum.
Born in 2013 to make fun of Bitcoin, Dogecoin almost by chance gained fame among cryptocurrencies, becoming the currency with the very high volatility, which led it to be the fourth most traded cryptocurrency in the world. Its value is constantly growing and it is not possible to predict which peaks it will reach: today it is possible to buy it at really affordable prices, making it the best cryptocurrency for those who want to start investing in the sector but do not have a large portfolio available.
This cryptocurrency also lends itself very well in trading, as it boasts absolutely crazy value increases, even within a few minutes: it is probably worth much more as a currency to trade on than as a currency to buy and keep for future sales (seen that it is not possible to predict the maximum value it will be able to reach).
Cardano is an open source project for cryptocurrencies that aims to create a public blockchain platform for the management of smart contracts. At the base of Cardano’s success we find the Proof-of-stake blockchain technology , which allows to significantly reduce the computing capacity necessary to generate new blocks (thus making it always possible to mine new cryptocurrencies without impacts from an energy and climate point of view) .
This cryptocurrency can be bought or mined without great difficulty, has a price that is still very accessible to most investors and can also be a good currency to trade online.
One of the most talked about coins in the cryptocurrency landscape is Tether , the most widespread of the so-called stablecoins , i.e. cryptocurrencies that have very little price fluctuations over time and are based on a solid exchange with a real currency (in this case the US dollar. ). At present Tether offers a market value of 1 US dollar, with small daily fluctuations. This is partially true: taking a look at the amount of Tether cryptocurrency in circulation (currently over 55 billion), the company that manages Tether should have over 55 billion US dollars on its current accounts to be able to guarantee the exchange 1 : 1, which is very difficult to prove.
This has led Tether to be framed as a possible scam , at least until the company is shown to have solid financial foundations to be able to cover every Tether in circulation. Until then, we strongly advise you to stay away from this cryptocurrency , both for trading and for buying.
Another cryptocurrency to consider for future investments is Ripple . This cryptocurrency is the basis of XRP, an open source internet protocol in which transactions are recorded on a verified and secure blockchain. Compared to Bitcoin Ripple offers a much higher maximum amount of circulating cryptocurrency: in fact it will be possible to put into circulation up to a maximum of 100 billion Ripple, counting the 21 million Bitcoins.
Polkadot is a blockchain network created to bring together other blockchains, so as to create a kind of new web. Polkadot allows the exchange of information from private, public, permissionless blockchains and new technologies. This blockchain platform uses Polkadot as its currency, based on technologies very similar to those seen on Ethereum (one of the founders of Polkadot is also the founder of the Ethereum platform).
This cryptocurrency boasts good volatility, remains at an affordable price for medium and long-term investments and can be a good base on which to fill your virtual wallet or to carry out online trading.
Bitcoin Cash was born from the split that took place within the team that manages traditional Bitcoin, firmly opposed to some characteristics present on the cryptocurrency par excellence. With Bitcoin Cash we will have in our hands a currency with an operation very similar to Bitcoin , but with a much faster payment system and the adoption of 8MB blocks for the management of the elements of the Blockchain.
Among cryptocurrencies, the price of Bitcoin Cash is rising at a great speed and is still unlikely to be suitable for direct purchase or mining; it is quite another matter when we talk about trading, where it remains one of the best cryptocurrencies to invest in together with traditional Bitcoin.
In the ranks of the best cryptocurrencies , Litecoin could not be missing , one of the most popular coins along with Bitcoin (having a similar age). Litecoin is a peer-to-peer cryptocurrency based on an open source project. From a technical point of view it is very similar to Bitcoin, of which it follows the functioning of the blockchain: the minting and transaction of Litecoin takes place thanks to an open source protocol and allows you to obtain new money with a faster speed than Bitcoin.
Litecoin is one of the cornerstones among the cryptocurrencies of a good investor, leaving ample room for choice both for direct purchase (at least for those with a medium and long-term investment project) and for trading; from the point of view of mining the required resources are already too high for home mining, while it remains one of the most mined coins in the server farms created for the purpose.
The list of cryptocurrencies seen in the previous chapter are currently those with the largest turnover, as well as having constant and profitable growth margins: it takes very little to understand immediately where to aim for the next investment.
But if we want to examine some new unknown virtual currency and with less evident margins of success (thus running a risk in the investment phase), below we find the complete list of the best 100 cryptocurrencies that can be exchanged in trading or purchased. in your virtual wallet:
Miner and Mining to earn cryptocurrencies
Mining is the operation that is carried out in cryptocurrencies in general, to issue / discover new currency and make it enter the market. As for the miners who bring gold to light through mining, a similar but digital process also takes place for bitcoins.
The Blockchain stores every transaction within data structures called blocks, as mentioned above. Thanks to mining, it is possible to add new blocks to the Blockchain, in other words mining is nothing more than the processing to find an exact very complex code to be found, with a succession of attempts, by a computer processor that can be the CPU of a computer, the GPU of a graphics card, ASICs and other hardware systems.
Whoever finds this code is rewarded, in the case of bitcoin, with an amount of 12.5 bitcoins (an amount destined to decrease over time), plus all the transaction fees entered by him in the incentive block of the mining time used. Those who carry out this operation are called Miner (miner).
Everyone can become a “Miner” and start trying to solve the complex mathematical problem related to new blocks, so that this is created in a valid and encrypted way and can be added to the Blockchain.
However, with the passage of time it is increasingly difficult to mine as the number of Bitcoins totally available is finite and not unlimited (21 million).
A very interesting article about the “miner” topic that I recommend you read is the one you find below, where we will explain how to block sites that mine with our computer, without our knowledge, using the computing power of our processor , causing slowdowns during normal use and a waste of available resources as well as energy consumption:
For those who invest in cryptocurrencies for the first time there are some important and simple tips to follow.
This type of market has huge swings in growth and loss as demonstrated last year and these first months of 2021, so I suggest you first invest only an amount of money that you are willing to lose without causing you any problems .
Secondly, even more important is the cold blood , essential to not get anxious or panic and sell immediately at the first decline, as cryptocurrencies undergo incredible rises and falls every time a positive or negative news is spread for them. Following these two rules will only be a matter of luck and timing to decide a good or bad investment.
Third and final advice is to rely on the safest Exchange services such as Coinbase , as over time there have been many problems with unreliable exchange services.
What is an emerging cryptocurrency
An emerging cryptocurrency is a virtual currency (often available on the market for a few years) characterized by exponential growth , especially if linked to an innovative blockchain platform or which well rewards those who believe in the initial project.
Not all emerging cryptocurrencies are “young”: some cryptocurrencies started quietly many years ago, increasing in value only in the last year to the point of generating the interest of investors and “digital gold diggers”.
Why invest in emerging cryptocurrencies
Investing in emerging cryptocurrencies is a very effective method to diversify investments in cryptocurrencies: instead of always focusing only on the most famous cryptocurrencies, we can focus on currencies that have not yet passed their “golden phase” or whose value is starting to rise dizzyingly , so as to anticipate the times and earn a lot when it is time to sell some of the coins stored in our eWallet.
Emerging cryptocurrencies are also excellent for online trading: their price fluctuations can generate very interesting profits even without having to buy or mine cryptocurrency, but based exclusively on forecasts on the price that the cryptocurrency under consideration will reach.
- The benefits and risks of emerging cryptocurrencies
- The advantages of betting on an emerging cryptocurrency are numerous:
Still Affordable Prices : Most emerging cryptocurrencies still have affordable prices for casual investors, so they can replenish their wallets while waiting for the famous “golden age”.
Availability : many cryptocurrencies have not yet reached even 70% of the total availability, allowing to mine even entire tokens and not fragmented parts of the cryptocurrency (as is now the case with Bitcoin).
High ROI : all the cryptocurrencies that we have reported below offer a high return on investment in the long term, especially for those who place their trust on very interesting projects or which will attract new investors in the short term (such as new blockchain technologies).
Volatility : if we love trading online, emerging cryptocurrencies are the best to place investments in the short term, as they can go up and a lot in just a few minutes.
The risks are the same as those associated with cryptocurrencies in general:
Speculative bubble risk : if the cryptocurrency bubble “bursts”, all cryptocurrencies will lose much of the associated value at that precise moment, causing the entire initial investment to be lost.
Degrowth of the project : it is not certain that the blockchain technology used will impose itself or have the hoped-for success, causing the value of the emerging cryptocurrency to drop quickly.
High resource demand : As the cryptocurrency maximum limit is reached, computers and server farms will be required to manage the blockchain calculations, making it very expensive to mine new tokens.
These risks are enough to alert casual investors but, like everything related to investments, there is always a margin of risk , even with the safest and most reliable projects.
Cryptocurrencies to invest in: the basic rules
The first rule for a successful investment is to avoid the most common mistakes. Here are the dangerous ones in the cryptocurrency industry:
Excessive Enthusiasm : Especially if the experience level is low, it is easy to get carried away by enthusiasm. The solution? An objective analysis of one’s investment capacity and a lot of time to devote to the learning phase.
Lack of information : identifying reliable sources and understanding which are the most reliable offers, among the hundreds of tokens and coins available, is essential to lower the level of risk. Once you have acquired the basic notions you are able to handle the topic with greater confidence. In this transition from beginner to intermediate, reading the White Paper can help. Every cryptocurrency project should have one, public, in which the developers thoroughly describe the idea and how they intend to implement it.
Imprudence : the level of attention to safety must be maximum. Protecting the investment in cryptocurrencies, emerging or not, is the first goal, to be pursued not only by avoiding ‘scam’ sites (easily recognizable because they promise easy earnings for everyone), but also by implementing basic IT protection rules such as authentication. two-factor (2FA).
Summary and conclusions
By carefully following the trend of these cryptocurrencies on the stock exchange, it is possible to immediately choose the cryptocurrency on which to bet (to keep pending an increase in value satisfactory for our interests) or on which to trade (therefore choosing to focus on fluctuations of value).
Considering the large amount of cryptocurrencies on the market (over 2,000), having access to a good list of cryptocurrencies like the one in this guide will allow you to wisely target investments, so as to increase the chances of generating a profit over time.