Do you know that the first decentralized cryptocurrency, Bitcoin, was created in 2009 due to the economic crisis wreaked by the financial calamity?
After that, many cryptocurrencies have had launched; however, every one of them, from Bitcoin and Ethereum to Dogecoin and Tether, has different specialties and degrees of utility, adoption, and promise.
As the world is revolutionizing day by day, many people are investing in cryptocurrency. The question here is that how can the investors know which cryptocurrencies to invest in?
As there are different types of cryptocurrency, investors have several options to choose from as per current crypto prices.
For those wanting to invest in cryptocurrency, it is crucial to remember that most blue-chip cryptocurrencies can also be unstable at times.
Therefore, just as one would invest in the stock market, they should only stake the money they can afford to lose
But before deciding which cryptocurrency to invest in, let's discuss why people should invest in it in the first place:
Why Invest In Cryptocurrency?
There is no denying that digital currencies have grown exponentially. However, the scope of cryptocurrencies has only increased more extensively due to the remarkable rise of Bitcoin (BTC) and Ethereum (ETH).
Aside from initial coin offerings (ICOs), several different types of blockchain investment products are available. These range from decentralized finance to non-fungible tokens.
Moreover, digital currency enthusiasts think these investments will create a new generation of digital currency millionaires (or billionaires).
However, those who still have not invested in the digital currency space may be questioning if there are any convincing reasons to start now.
Hence, here are some of the reasons people might find helpful before investing in cryptocurrency:
Control Over Assets
One essential and fundamental decentralized nature allows you to control your assets without a third party's involvement.
As a result, the value of the support does not depend on the exchange or a middleman. This gives traders the full authority to avail maximum profits from the usual exchanging rates.
What results in deflationary assets for Bitcoin and other cryptos is their limited supply. This means that the purchasing power of cryptocurrencies increases over time.
Moreover, the algorithm of each cryptocurrency puts a cap on their total supply.
Cryptocurrencies are popular because they offer complete transparency, made possible by open-source and publicly verifiable technology.
Long Term Investment
Despite the instability and fluctuations that characterize the crypto market, long-term investments in cryptocurrencies are viewed as very advantageous.
For example, they can serve as a decent source of savings after retirement or provide a much-needed cash buffer during an economic crisis.
24x7 Trading Accessibility
Crypto trading is available 24 hours a day, seven days a week, allowing traders to plan their buying and selling strategies at any time of the day.
Furthermore, the creation of altcoins like Ethereum, Dogecoin, and Ripple expose the crypto market to new buyers, miners, and speculators.
Unlimited Choice Of Coins
Although no one doubts Bitcoin's dominance in the world of cryptocurrency investments, the truth is that there are hundreds of other altcoins to purchase and sell out there.
Thus, you have an unlimited number of coins at your disposal to help you diversify your portfolio and perhaps enhance your fortune.
While some undervalued coins may be a risky investment, others merit your consideration and are a worthy investment.
Low Entry Threshold
Investments in stocks and real estate need a lot of capital initially. However, cryptocurrency has a low entry threshold.
There are several platforms out there that do not require a massive amount of money for trading crypto. Therefore, you can even start trading cryptocurrency with as minimum as $100.
Secondly, it will also save you from all the complicated and time-consuming procedures and paperwork.
With the widespread use of smart contracts and decentralized apps, blockchain technology has proven helpful to the gaming, medicine, business, and voting sectors, among others.
Several private and corporate processes are switching to blockchain and digital payments, especially during the ongoing coronavirus pandemic.
Moreover, a spike in the download of crypto apps was recorded during the COVID-19 lockdown in 2020. Before getting into crypto trading, make sure to follow these dos and don'ts:
- Do your own research and find out everything about cryptocurrency trading
- Understand the risks related to crypto due to its volatility. One should only invest in cryptocurrencies when they’ve understood the technology behind the assets
- Understand the role of demand behind the liquidity and stability of a cryptocurrency. The higher the market and the community backing, the more profitable cryptocurrency is for the investors
- Before investing, analyze the coin's supply limit
- Conduct thorough research on any specific type of cryptocurrency you are interested in investing
Top 5 Cryptocurrencies To Invest In 2021
The process of judging the top cryptocurrencies to invest in is based on their capitalization or the total worth of all the currently circulating coins.
In 2021, this list reads:
- Bitcoin (BTC)
- Ethereum (ETH)
- Binance Coin (BNB)
- Cardano (ADA)
- Tether (USDT)
Keep reading as we elaborate:
1. BITCOIN (BTC)
Since its creation, there is no denying that Bitcoin has been the dominant player in its field; even theories on its utility differ.
However, its position as the pioneer in cryptocurrency has exponentially ballooned its value. As we speak, one BTC is worth $46, 300 – a value considered out-of-reach for most normal people.
And although the creation of trading apps has made buying and selling Bitcoin a more straightforward task, those without expendable assets must think twice before investing.
But we cannot deny that it is now widely accepted and considered usable by several multinational and national companies - they have been accepting Bitcoin and supporting the blockchain tech.
Moreover, the number of people adopting the blockchain wallet since 2019 has constantly been increasing, meaning that the acceptance of Bitcoin will not fade any time soon.
As per reports, the number of investors purchasing Bitcoin via various platforms – like PayPal and Cash App – has increased rapidly.
In a recent report, Cash App revealed that for 2021, there is a 200% increase in Bitcoin (BTC) revenue for the second quarter year-on-year. It further publicized that profit grew 91% YoY to $1.14 billion.
For the app, Bitcoin services increased $2.72 billion in revenue, with a gross profit of $55 million and respective increases of 210% and 223%, respectively, year-on-year. Overall, Cash App made a gross profit of $546 million, up 94% YoY.
And if you wonder, “how does Bitcoin work?” well, the answer is simple!
Bitcoin is a computer file saved in a 'digital wallet' app on a smartphone or computer. People can easily send Bitcoins to each other in the digital wallet. All the transactions are recorded in a blockchain.
2. Ethereum (ETH)
Ethereum is the first global programmable money. It stores instructions on the blockchain that self-execute once certain conditions are met.
As a result, people who initially had invested $1000 in Ethereum when it was introduced six years before could be having more than $1 million worth of profits today.
On the other hand, Ethereum has a market capitalization of about $267 billion, and its share of the overall crypto market is about 18%.
Moreover, to fix a mounting challenge for cryptocurrencies like Bitcoin, Ethereum will be undergoing a significant transformation.
Instead of proof-of-work (PoW), the Ethereum network will change into one based on proof-of-stake (PoS) by the end of 2022.
Anyone will be able to authenticate transactions based on how many Ethereum they own under the PoS regime. Moreover, approximately 32 ETH or about $80,000 will be required for staking.
3. Binance Coin (BNB)
Like Bitcoin, Binance Coin has a strict limit on coins in circulation, which is one of its most significant advantages.
Hence, with a limit of 200 million, BNB has ranked in the top 5 valuable cryptocurrencies globally. In 2021 alone, Binance's value has gone up by over 700%.
However, unlike other cryptocurrencies in the market, it operates on a different basis, destroying, or burning, a significant chunk of its currency quarterly.
If you are thinking about buying a Binance Coin, follow these steps:
- For starters, obtain a Binance wallet
- Find what your BNB-based address is
- Get registered on Binance
- Using cryptocurrency or visa or master card, purchase Binance coins
- It’s your call, you can checkout coins from your virtual wallet, or you can leave them for later use
4. Cardano (ADA)
Cardano was launched in 2017 and has quickly gained a lot of popularity and now has a global presence — Cardano's price continues to increase day by day.
It uses a native cryptocurrency because it is classified as a decentralized blockchain platform.
Cardano does this in part by employing a proof-of-stake protocol that does not reward excessive energy use and is becoming an increasingly popular method for blockchains to confirms transactions.
In addition, with a market cap of $43 billion, Cardano is working towards allowing smart contracts, which will be fully operational by fall 2021.
Additionally, compared to other coins, Cardano's ADA token has had relatively modest growth. For example, ADA's price in 2017 was $0.02; however, its price was $2.11 in August 2021, making an increase of over 10,000%.
5. Tether (USDT)
Previously known as Realcoin, Tether was launched in 2014 and is one of the cryptocurrencies secured to the US dollar.
Tether is a blockchain cryptocurrency with crypto tokens backed by an equal amount of physical money held in a designated bank account, such as the US dollar, euro, or Japanese yen.
It is a stablecoin, a type of cryptocurrency that attempts to keep the digital currency values stable. This is to avoid the significant volatility witnessed in the pricing of other popular cryptocurrencies.
With a total market capitalization of $2.24 billion and a per token value of $1.00, Tether was the third-largest cryptocurrency in January 2021.
Learn About Cryptocurrencies With An Expert
Apart from the above top 5 cryptocurrencies, there are several others in which you can invest. If you want to learn more about cryptocurrency or how it functions, find an instructor.
Private tutors for crypto exist, and they are well-versed in the recent trends and ideologies linked to trading and mining.
If you want to find a personal crypto expert to help you learn about the revolution, sign up with Superprof.
Superprof is a platform that links teachers and students by area and other details. So all you have to do is make an account, list your preferences, and find an expert in your area!
The platform that connects tutors and students