Cryptocurrency is digital money that is not managed by a centralized system such as the government. Instead, it is built on blockchain technology, the most popular of which is Bitcoin.
As digital currency gains popularity on Wall Street, more possibilities become available. There are already over 5,000 cryptocurrencies available on the market.
While bitcoin can be used to make purchases, most people view it as a long-term investment. However, due to volatility, investing in cryptocurrencies is dangerous, so it’s critical to understand what you’re getting into before you buy-in.
These are the top eight cryptocurrencies worth investing in 2021.
1. Bitcoin (BTC)
Bitcoin has the longest history of any cryptocurrency. It’s clear to understand why it’s the market leader, with a far higher price, market cap, and volume than any other investing option. Despite the presence of thousands of different cryptocurrencies on the market, Bitcoin still accounts for more than 43 percent of the cryptocurrency market’s worth.
Bitcoin is already accepted as payment by many businesses, making it a wise investment. Visa, for example, accepts Bitcoin transactions. Furthermore, Tesla revealed in February that it had invested $1.5 billion in it, and for a time, the business accepted it as payment for its vehicles – and it may soon do so again. Furthermore, major institutions are starting to incorporate Bitcoin transactions into their offerings as well.
Risks of Investing In Bitcoin
The value of Bitcoin fluctuates a lot. During any given month, the price can fluctuate by thousands of dollars. If big changes like these make you uncomfortable, you should probably stay away from Bitcoin. Otherwise, as long as you remember that bitcoin may be a good long-term investment, this volatility should not be too alarming.
The price of Bitcoin is another reason to reconsider investing in it. With a single Bitcoin costing more than $51,000, most consumers are unable to purchase entire Bitcoins. This is a disadvantage for investors who want to avoid purchasing a portion of a Bitcoin.
2. Ethereum (ETH)
Ethereum differs from Bitcoin in that it is more than just a cryptocurrency. It is also a network that lets developers to use the Ethereum network to generate their own coin. While Ethereum is far behind Bitcoin in terms of value, it is considerably ahead of its competitors.
Despite the fact that it was released years after certain other cryptocurrencies, it has significantly outperformed its market position due to its unique technology.
Risks of Investing In Ethereum
While Ethereum makes use of blockchain technology, it only has one “channel” for transactions. When the network is overcrowded, this can cause transactions to take longer to process.
In 2016, a hack that exploited a security hole resulted in the loss of more than $50 million in Ether.
3. Binance Coin (BNB)
Binance Coin is one of the few cryptocurrencies that has reached its high since 2017. During that year, there was a bull market, and the prices of all cryptocurrencies soared along with it, reaching a peak before plateauing and declining in value.
Unlike other cryptocurrencies, Binance Coin has maintained a modest but continuous rising trend since 2017. Binance Coin has proven to be one of the more solid investment options, with fewer risks, as a result of its performance.
Risks of Investing In Binance Coin
Binance Coin differs from its competitors in that it was founded by a company rather than a bunch of IT developers. Although Binance Coin’s commitment to a solid blockchain has won over many critics, some investors are still wary of this cryptocurrency and its possible security risks.
4. Cardano (ADA)
Cardano’s network has a smaller footprint, which appeals to investors for a variety of reasons. Cardano requires less energy to conduct a transaction than a larger network such as Bitcoin. This means that transactions are speedier and less expensive.
It asserts to be more adaptive and secure. Cardano is constantly improving its development in order to remain ahead of hackers.
Risks of Investing In Cardano
Cardano may not be able to compete with larger cryptocurrencies even with a better network. Fewer users equal fewer developers. Most investors who wish to see a high adoption rate will find this unappealing. The platform has huge goals, but there are questions about whether it will be able to live up to them.
5. XRP (XRP)
XRP was founded by the founders of Ripple, a digital payment processing startup. It functions as a cryptocurrency PayPal, facilitating exchanges of both crypto and fiat currencies.
Ripple is significantly investing in non-fungible token developments that leverage the public blockchain XRP Ledger. According to Inside Bitcoins, this investment indicates that Ripple is establishing itself as another “Ethereum killer.”
Risks of Investing In XRP (XRP)
The Securities and Exchange Commission filed a complaint against Ripple and two of its executives in December 2020, saying that they violated the Securities Act of 1933 by raising more than $1 billion through an unregistered digital asset securities offering. The inference that XRP is a security rather than a currency could have ramifications not only for XRP but also for other cryptos.
6. Dogecoin (DOGE)
Dogecoin began as a sarcastic meme portraying a Shiba Inu dog, but it is no longer a joke. Elon Musk and Mark Cuban are both investors, with Musk describing Dogecoin as one of the “three major assets” he owns in addition to his company, according to Fox Business.
Risks of Investing In Dogecoin
Dogecoin prices have proven to be particularly susceptible to the hype – both good and bad. For example, the coin plummeted following Musk’s performance on “Saturday Night Live” in May, when he referred to it as a “hustle.” And, unlike Bitcoin, there is no limit to the amount of Dogecoin that may be mined.
7. Polkadot (DOT)
Polkadot was founded by Ethereum executives who decided to establish their own cryptocurrency with a superior network. Polkadot offers numerous “lanes” to conduct transactions in, rather than just one.
This cryptocurrency was created to reward real investors while weeding out those who are only trading to earn quick money. Investors that participate in the platform also contribute to decision-making on issues such as:
Network fees, Network upgrades, Establishing or removing parachains
Risks of Investing In Polkadot
Gavin Wood, the founder of Polkadot, first announced the coin in a white paper in 2016. It was first introduced in 2020. Polkadot lacks a track record for comparison due to its brief existence, making it a risky investment for potential buyers.
8. Chainlink (LINK)
Chainlink is enticing to investors for a variety of reasons, including its low pricing. It has also demonstrated that its worth can rise, and there is still plenty of space for expansion.
Chainlink can also be purchased on Coinbase, one of the world’s largest cryptocurrency exchanges. Chainlink is more interesting to investors since it is more accessible.
Risks of Investing In Chainlink
While it is still higher than thousands of other cryptocurrencies, it has a smaller volume and market capitalization than more enticing cryptocurrencies.
Rating the Top Cryptocurrency Choices
A fast online search will yield dozens of suggestions about how to invest in cryptocurrencies. The following considerations were taken into account when selecting the top eight options.
How long has cryptocurrency been in existence? New cryptocurrencies aren’t outright banned out, but having historical data to compare to allows you to understand how a company has performed up to this point.
How has the company performed over the course of its existence? It’s a good indicator if prices remain stable. Even better, if you discover that the cryptocurrency is gaining traction and becomes more valuable over time.
In terms of usability and security, how does the platform compare to others? The first thing you should check at is the speed with which transactions are completed. The network should be able to easily accommodate transaction traffic.
You also want to ensure that your investment is safe. The majority of cryptocurrencies employ blockchain technology, which makes all transactions transparent and easy to follow. Blockchain technology does not always make it more difficult for hackers to take your cryptocurrency. It does make it easy to trace your money so that it may be recovered rather than lost due to fraud.
How many individuals are investing in the cryptocurrency you’re thinking about buying? When there is a high level of adoption, it indicates that the coin has better liquidity. Trading, selling, and spending will become more convenient in the future.