Before talking about the best cryptocurrency to invest in, you should know what is cryptocurrency and why it is famous nowadays.
What is Cryptocurrency
A cryptocurrency or “crypto” is a digital currency used to purchase goods and services; however, it utilizes an online ledger with powerful cryptography to secure online transactions.
The increased interest in these unregulated currencies is to trade for profit.
It is a form of payment exchanging online for goods and services. Different companies have issued their currencies, often known as tokens, and these can be traded particularly for the goods or services that the company offers.
Think of these currencies as you would arcade casino chips or tokens. You will have to exchange real currency for the cryptocurrency to get all services.
You may have clarity about what cryptocurrency is as it works using a unique technology known as the blockchain.
It is a decentralized technology spread across many computers, managing and recording transactions. The main advantage of using this technology is its security.
The 10 Most Important Cryptocurrencies to Invest In
Following are the best cryptocurrencies to invest in:
Bitcoin is a digital currency, launched in January 2009. It follows the ideas designed in a whitepaper by the mysterious Satoshi Nakamoto.
Bitcoin provides the opportunity of lower transaction fees than old online payment techniques, and, unlike government-issued currencies, it is functioned by a decentralized authority.
Bitcoin is a special kind of cryptocurrency that makes it the best cryptocurrency to invest in 2021. There are no physical bitcoins and only balances carried on a public ledger that everyone has transparent access to.
All of these transactions are verified or secured by a considerable amount of computing power. Any banks or governments do not issue Bitcoins, nor are personal bitcoins valuable as a commodity.
Ethereum is also the best cryptocurrency to invest in. It is a decentralized software platform enabling Smart Contracts and Decentralized Applications (DApps) to be built or work without any fraud, interference, or control from a third party.
The main objective behind Ethereum is to produce a decentralized suite of financial items that anyone in the world can have free access to, irrespective of
ethnicity, nationality, or faith.
This prime aspect makes the implications for people in some countries more appealing, as those without state infrastructure can get access to bank accounts, loans, insurance, or various financial products.
Litecoin, created in 2011, was among the first cryptocurrencies that follow the rules of Bitcoin and has often been known as “silver to Bitcoin’s gold.” Charlie Lee has created this unique currency, an MIT graduate and former Google engineer.
It is based on an open-source global payment network controlled by any central authority. Litecoin uses “scrypt” as a proof of work decoded with the help of CPUs of user-grade.
Polkadot is compelling evidence of digital stake money that is pointed toward conveying interoperability between other blockchains. Its protocol is set up to connect permissioned or permissionless blockchains and oracles to let systems work together under one roof.
Polkadot’s essential component is its hand-off chain that permits the interoperability of changing organizations. It additionally considers “parachains,” or equal blockchains with their local tokens for particular use cases. That is, it is the best crypto to invest in right now.
This framework varies from Ethereum because instead of making just decentralized applications on Polkadot, engineers can make their blockchain while also utilizing the security that Polkadot’s chain has.
With Ethereum, designers can make new blockchains; however, they need to make their safety efforts which can leave new and more modest activities open to assault, as the more significant a blockchain, the greater security it has. This idea in Polkadot is known as shared security.
Stellar is also the best cryptocurrency to invest in 2021. It is an open blockchain network created to offer enterprise solutions by linking financial institutions for huge transactions.
The massive transactions between banks and investment companies usually would take several days, lots of intermediaries, and cost a good deal of money, can now be completed instantaneously with no intermediaries and cost very low for people making the transaction.
While Stellar is renowned as an enterprise blockchain for institutional transactions, it is still an open blockchain that any person can use.
The system permits cross-border transactions between any currencies. The native currency of Stellar is Lumens (XLM). The network needs customers to hold Lumens to be capable of transacting on the web.
Chainlink is a decentralized oracle network that fills the gap between smart contracts. Blockchains themselves can’t link to outside applications in a secured manner.
Chainlink’s decentralized oracles permit smart contracts to communicate with outside data so that the contracts can be executed relied on data that Ethereum itself cannot link to.
Chainlink’s blog gives information about lots of used cases for its system. One of the several used cases explained would be to check water supplies for pollution or illegal syphoning in particular cities.
Binance Coin (BNB)
BNB (as the best cryptocurrency to follow in) is a utility cryptocurrency operating as a payment technique for the fees linked with trading on the Binance Exchange.
Those who utilize the token as a means of payment for the exchange can trade at a discount.
This blockchain is also the platform that Binance’s decentralized exchange functions on. Changpeng Zhao launched the Binance exchange, and the exchange is one of the most extensively utilize exchanges in the world relied on trading volumes.
Tether was the first and most famous group of stablecoins. This cryptocurrency aims to peg its market value to a currency or other external reference point to minimize volatility.
As most digital currencies, even primary ones such as Bitcoin, have experienced various periods of dramatic volatility, Tether or other stable coins attempt to smooth out price changes to get the attention of users who may otherwise be careful.
Monero is one of the best cryptocurrencies to invest in right now. It is a secure, private, or untraceable currency. This open-source cryptocurrency was created in April 2014 and soon gained significant interest among cryptography enthusiasts. The development of Monero (XMR) is entirely donation-based and community-driven.
This cryptocurrency has been created with a significant focus on decentralization or scalability. It gives complete privacy by utilizing a particular method known as “ring signatures.”
Should I Invest in Bitcoin
Should I invest in Bitcoin is the most asked question, and nobody knows what the future has in store for Bitcoin? However, if you are determined to invest in Bitcoin, there are specific ways to minimize your risk to protect your money.
Ensure you have a well-diversified portfolio
Irrespective of where you select to invest, it is always good to have a well-diversified portfolio. However, if you are thinking about investing in Bitcoin, a healthy portfolio is essential to minimize your risk.
To safe answer the, should I invest in Bitcoin is best to describe in this technique. The more diversified your portfolio is, the more negligible effect Bitcoin will have on your all investments if it takes a bad turn.
Invest through an ETF
Cryptocurrencies trade is different from regular stocks, and to invest directly in Bitcoin, and you have to produce a digital wallet and sign up on a cryptocurrency exchange. It can also be a safety concern because if you lose your password to the digital wallet, you cannot access your investments.
A Bitcoin ETF might mimic the crypto price, but you would not be investing in Bitcoin directly. Besides, the ETF makes it so that you may invest in Bitcoin like any other stock via an old exchange.
Consider crypto stocks
Should I invest in bitcoin in 2021 can be answered in this part! Perhaps it doesn’t involve investing in Bitcoin at all but instead investing in cryptocurrency stocks.
A cryptocurrency stock is a company that is included in the crypto market in various ways. Examples of cryptocurrency stocks involve;
The company permits customers to provide cryptocurrencies, including Bitcoin, as a form of payment. It has also bought over $200 million worth of Bitcoin since September 2020.
CEO Elon Musk recently announced a $1.5 billion investment in Bitcoin, and the company also allows payment in the form of Bitcoin.
Though it is not directly linked to Bitcoin, the company builds blockchain solutions that are the technology behind crypto. If Bitcoin becomes mainstream, Salesforce might get an advantage from it.
Now, you can answer; should I invest into bitcoin or not!
The Best Cryptocurrency Trading Platform
Following are the best cryptocurrency trading platforms;
EToro: Best Overall
Etoro is the perfect choice for trading the most famous cryptocurrencies like Ethereum, Bitcoin, and Litecoin.
Etoro is one of the biggest cryptocurrency exchanges globally, with over 19 million customers worldwide and over 19 million cryptocurrency transactions executed on the Etoro platform.
Etoro is supported by over 130 different countries and is the most secure cryptocurrency trading platform in existence.
Though it does not provide various assets to trade as some of their competitors, it does give the fourteen most famous cryptocurrencies. Here is a list of the crypto coins available on this powerful platform;
- Litecoin (LTC)
- Bitcoin (BTC)
- Ethereum (ETH)
- Ethereum Classic (ETC)
- Bitcoin Cash (BCH)
- Stellar Lumens (XLM)
- Cardano (ADA)
- Neo (NEO)
Etoro provides a web-based trading platform and a mobile app as well. The Etoro platform is really simple to utilize, even for newbies.
BlockFi: Best for Crypto Investing
BlockFi is the best crypto trading platform. It is quickly becoming the go-to choice for crypto investors. With BlockFi, you may earn up to 8 % interest on your borrow cash, holdings, and purchase or sell cryptocurrency. BlockFi has no hidden fees and no limited balances.
Why select BlockFi as your cryptocurrency exchange? The reason is easy and simple. Unlike other crypto exchanges, BlockFi provides interest-earning accounts that permit you to earn money on all cryptocurrencies you hold on their platform.
This means that once a trade is executed, your new cryptocurrency asset will begin earning interest the very next day. No other cryptocurrency exchange permits you to make money on your deposits in the same way that BlockFi does!
Binance: Top Crypto Exchange For Trading Altcoins
Binance is also the best platform to buy cryptocurrency. It is the world’s biggest cryptocurrency exchange and is our top choice for purchasing and selling altcoins.
Binance has a whopping 1,500,000 transactions per second and over three billion in average daily volume.
Changpeng Zhao and Yi He produced the Binance cryptocurrency exchange, one of the perfect exchanges today, in China in 2018. Since crypto laws are strict in China, it relocated to Japan and now has headquarters in Malta.
Binance may sport a low transaction fee and some of the lowest prices in the industry as well. It only charges clients 0.2 % on every trade and, while deposits are free, withdrawals cost money.
If you utilize the Binance-owned digital currency, BNB, you may receive a 50 % discount.
Prime XBT: Best Bitcoin Exchange for Margin Trading
The relatively young Seychelles-based Prime XBT cryptocurrency exchange is the best cryptocurrency trading platform.
It achieved exponential growth since its 2019 launch, with customers from 140 different nations making it an inspiring target for any new investor. It may feature different trading pairs and lower transaction fees than others.
The company’s vision is to offer its users the fundamental tools they require for regular trading activities, including purchasing bitcoin and using margin trading. PrimeXBT charges a 0.1 % fee for ForEx and commodities and 0.05% for cryptocurrency as well.
The Best Cryptocurrency Wallets of 2021
For the safety of those looking to invest in cryptocurrency like Bitcoin, we have built a list of the best Bitcoin wallets.
Some of these wallets have more characteristics than others, including the capability to store more cryptos than just Bitcoin and added security measures as well.
This list goes in no specific order other than having hot wallets come first, but that doesn’t mean hot wallets are better than others.
Following are the best cryptocurrency wallets;
- Best Hardware Wallet: Ledger Nano X
- Best For a Large Number of Cryptocurrencies: Trezor Model T
- Best Bang For Your Buck: Ledger Nano S
- Best for Beginners: Exodus
- Best For More Advanced Users Interested in Just Bitcoin: Electrum
- Best for Mobile Users: Mycelium
Pros and Cons of Investing in Cryptocurrency
The price of one cryptocurrency like one bitcoin in US dollars tripled last year, gaining over 150 % in Q4 alone. This impressive rise sparked widespread media or investor interest in bitcoin particularly and in cryptocurrencies more typically.
Furthermore, several payment platforms like Square, BitPay, and PayPal have begun accepting payments in bitcoin or other cryptocurrencies. It is also becoming simpler to trade cryptocurrencies on built platforms.
Here, we will look at some of the potential pros and cons of cryptocurrencies:
Potential for high returns
In the six years to 30 December, 2020, the S&P 500 index of large-cap US equities has compounded at an annualized growth rate of 14 %; over the same period, the price of bitcoin in USD has compounded at an annualized growth rate of 131 %.
Some have cited cryptocurrencies as an alternative hedging instrument to gold in a portfolio context. For example, the S&P 500 declined in 17 out of the 60 months to end December 2020, of which the price of bitcoin rallied in seven.
In the five years to the end of 2020, a portfolio consisting of 10% invested in bitcoin and 90% in the S&P 500 would have generated compound annual returns of 26.8%.
There is a limit of 20 million coins that can be made or “mined.” Right now, around 18 million bitcoins have been mined, leaving under 3,000,000 still to appear.
A connected component is that bitcoins’ pace eases back over the long haul through an interaction known as dividing. In 2009 each square mined was worth 50 bitcoins, the worth is currently 6.5 bitcoins per block.
Protection from debased currencies and the threat of rising inflation
The Global Financial Crisis (GFC) of 2008 was a catalyst for national banks throughout the planet to participate in irregular financial strategies, strikingly massive scope resource buys. Since the GFC, the Fed’sFed’s asset report has extended by 8x, the ECB’sECB’s by somewhat under 4x, and the BoJ’sBoJ’s by almost 7x.
A few groups are concerned this will bring about a monstrous corrupting of public monetary standards and related expansion in swelling. They recommend digital currencies offer choices that can’t be degraded similarly.
Growing acceptance and usage
A 2021 article on Coindesk.com guaranteed that Coinbase had seen $135 billion in digital money dealer exchanges in 2020, a 60% increment more than 2019.
That equivalent article refers to a Chainalysis report that affirms installment processors saw around $ 4 billion worth of bitcoin movement in 2020.
Independently, it is prominent that there has been a considerable expansion in the quantity of bitcoin electronic wallets made in recent years (see diagram beneath), and there is an expanding number of institutional financial backers who are hoping to put resources into cryptographic forms of money, the most recent being Blackrock and Bridgewater.
High volatility and potential for significant losses
The annualized unpredictability of the month-to-month percent change in bitcoin costs in US dollars is about 90 %, as estimated in recent years.
This looks at to annualized unpredictability of the month-to-month percent changes in the S&P 600 and the gold cost of 15 % and 13 % individually.
To give some thought to what this instability may mean for a financial backer, think about the scope of profits: the most extreme month-to-month bitcoin return over the 60 months to end December 2020 was 76 %, and the base – 37 %.
The circumstance of interest in bitcoin or other digital currencies will have a critical bearing on the profits accomplished.
As noted earlier, of the 18 months the S & P 600 fell over the five years to end 2020, the price of bitcoin went up in seven. To put it another way, of the 18 months, the S & P 600 declined; bitcoin also went down in 10 of them slightly less flattering.
Endless potential supply
While it is true that the no of bitcoins created will eventually be capped at 20 million and many other cryptocurrencies also have limited supply established into their protocols, there is currently nothing to prevent an ever-growing no of new cryptocurrencies from being produced. So, cryptocurrency supply is potentially limitless.
A cryptocurrency or simply crypto is a digital currency that can be utilized to purchase goods and services but uses an online ledger with strong cryptography securing online transactions. There are famous cryptocurrencies for marketing, and one of the best cryptocurrencies to invest in is Bitcoin.
There are also some popular crypto wallets, and It is also significant to select a wallet that works well with some of the larger exchanges.