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What are the Top 10 Cryptocurrencies To Invest In 2021?

Top 10 Cryptocurrencies To Invest In 2021

April 28, 2021 | 

904 Views | 

JOHN K MWANIKI | 

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Gone are the days when most people did not know what cryptocurrencies were, blockchain was a complex concept, and Bitcoin was something to be feared. Now, more people have embraced cryptocurrencies. So much that big institutions like Tesla and big investors are investing in them. Additionally, there are now organizations like J.P. Morgan that want to introduce crypto indices to help investors interested in the new asset class to diversify their portfolio automatically. 

If you are more interested in investing in individual cryptocurrencies, you will find a list of 10 cryptocurrencies below. Additionally, you will also find five factors you should consider when investing. This list will not include Bitcoin but altcoins; 

10 cryptocurrencies to invest in in 2021

1.    Ethereum

Ethereum is the 2nd largest crypto by market cap with 13% dominance. It is an open-source, decentralized software platform. While the blockchain has its own cryptocurrency, Ether, it is also a platform on which developers can create decentralized platforms and smart contracts. It is currently in the process of upgrading to Eth 2.0, which among other benefits, will enable it to shift from the slow and energy-intensive proof of work (POW) consensus algorithm to the proof of stake (POS) algorithm. 

2.    Cardano (ADA)

Cardano is a decentralized blockchain network that was founded by one of the founders of the Ethereum network. It allows developers to write smart contracts into the blockchain as well as develop apps. Cardano already uses the POS consensus algorithm and has lower transaction costs than some blockchain networks.

3.    Polkadot (DOT)

One major problem faced by the existing cryptocurrencies is the lack of interoperability. All blockchain networks exist alone, meaning that it’s hard for them to communicate with each other. Polkadot intends to solve this problem by allowing interoperability. It was also created by a founder of Ethereum. If it succeeds at solving the interoperability problem, it could be the key to mass adoption of cryptocurrencies. 

4.    Litecoin (LITE)

Majority of the cryptocurrencies on this list differ from bitcoin in one way or another. Litecoin is no exception. This network launched in 2011 is the 8th largest crypto by market cap. It boasts of carrying out its transactions 4x faster than Bitcoin and using scrypt POW, which is more effective than Bitcoin’s POW algorithm.

5.    Bitcoin Cash (BCH)

This cryptocurrency created in 2017 was a hard fork from Bitcoin. There are some major differences between Bitcoin Cash and Bitcoin, but the major one is that its blocks in the blockchain are 8MB in size compared to Bitcoin’s 1MB. This means that it can handle and record more transactions per second than Bitcoin. It also has lower transactional fees. 

6.    Ripple (XRP)

This is a decentralized blockchain platform. One reason that earns it a spot on this list is its utilitarian value for institutions. It enables institutions to perform cross-border money transfers in a fraction of the time it would normally take. It has already seen some uptake with several institutions, and as you will say in the factors, adoption is a key factor when considering what cryptocurrencies to invest in. 

7.    Chainlink (LINK)

Chainlink is a decentralized oracle network. Oracles are infrastructures that connect smart contracts to real-world data from external data feeds and APIs. Successful development of the Chainlink network may help solve the oracle problem currently faced by smart contracts. 

8.    Binance Coin (BNB)

Binance Coin is a utility crypto on the Binance decentralized exchange. It was initially launched as a token on the Ethereum network. It uses POS and is a payment method used when trading on the Binance Exchange. Binance Exchange is one of the largest cryptocurrency exchange platforms in the world and as long as its use continues to grow, the BNB coin is expected to appreciate in value along with it. 

9.    Monero

Monero may be shrouded in mystery and scandal, but it is still a great cryptocurrency to invest in. Monero is a privacy enhanced cryptocurrency that adheres to the original principles guiding cryptocurrencies of privacy. All transactions on the Monero network are secure and untraceable. Its decentralization and scalability make it a worthwhile investment. 

10.    Stellar (XLM)

This is an open network blockchain that was founded by one of the founders of Ripple. Just like Ripple, it helps facilitate cross-border transfers of money by financial institutions. Those who use the network transact using lumens (XLM).

Five factors to consider when investing in cryptocurrencies:

a.    Technology 

You want to invest in a cryptocurrency that has a firm technological foundation. One way to evaluate this is to look at the development team or company behind the cryptocurrency. Good developers translate to a higher probability of success for the cryptocurrency.

b.    Adoption 

You want to invest in a cryptocurrency that already has a community around it, and that is being adopted by people and organizations. These two elements increase its liquidity and supply.

c.    Track record

Assess how the cryptocurrency has been behaving. The past does not always equal the future, and sometimes, the behavior of the price charts may warn you not to invest in it. 

d.    Utility

You want to invest in a cryptocurrency that has utilitarian value. There are thousands of cryptocurrencies, and in the end, the ones that have real-world utilitarian value have a higher chance of survival. 

e.    Longevity

This is about looking at the future potential of the cryptocurrency. Sometimes, a cryptocurrency has utility value now, but there are factors that show that it may not be useful for long. For example, a cryptocurrency that is useful but not scalable may not survive for very long. 

Conclusion

While the boat may have sailed for some people to invest in Bitcoin, there are still some great cryptocurrencies worth investing in. This article has given you just ten of these cryptocurrencies. Using the factors listed above and a little research, you should be able to find the cryptocurrency with the potential to become the next Bitcoin. Remember to diversify your portfolio when investing. 

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Total Market Cap The Total Market Capitalization (Market Cap) is an indicator that measures the size of all the cryptocurrencies.It’s the total market value of all the cryptocurrencies' circulating supply: so it’s the total value of all the coins that have been mined.

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