With over 4,000 cryptocurrencies in existence, you would not be wrong if you get confused about the best cryptocurrency to invest before the end of 2021. In a bid to clear your doubt and confusion, we will be giving you a detailed guide of where you can invest in before the end of 2021. Thus reading through this article will give you the enlightenment you need.
With an ever expanding field of offerings, and about 4,000 cryptocurrencies in existence, it is very clear that Bitcoin is not only cryptocurrency that you can invest in. However it may be bit difficult to get to know the best cryptocurrency to invest in.
But not to worry because here we have put together a list of the best cryptocurrencies that you can consider this year. We have carefully selected from established names in cryptocurrency to emerging players, that are worth your investing in.
Benefits of Crypto Trading
If you are wondering what the benefits of trading crypto are and why you should invest in crypto, here is your answer.
People who trade crypto are drawn to this digital asset for a number of reasons. These reasons when analyzed makes sense and explains why you should join this lucrative venture. First cryptocurrencies can function as a store of value, they act as a useful portfolio asset and can be used as a direct method of payment. Cryptocurrency is quite easier to store, easier to transfer, and easier to trade. You can buy all your essentials using cryptocurrency.
So here let’s outline the benefits:
Liquidity – With cryptocurrency, you can buy, trade and sell your assets at any time because its exchanges operate 24 hours a day.
Asset Diversity – Traders diversify through the vast selection of different cryptocurrencies in order to lower or mitigate risks.
Low minimum investment barrier – Cryptocurrencies are divisible. This implies that you can purchase smaller fractions, which allows for a very low investment threshold. Also the ability to trade crypto is available to virtually everyone.
Fees – Cryptocurrency as compared to other stock trading, offers significantly lower fees.
Transparency – We can say that cryptocurrency is transparent in its dealings. This is because majority of crypto tractions are recorded using blockchain technology, which ensures reliability, transparency and records that are traceable as well as information that cannot be altered.
Best Cryptocurrency To Invest Before The End Of 2021
Bitcoin – (BTC)
Bitcoin is a leader and has been around for the longest time. It has a price, market cap and volume which is much higher than any other investment options. Even with the birth of thousands of other cryptocurrencies out there in the market, Bitcoin still represents 40% of the cryptocurrency market cap.
Currently, most businesses already accept bitcoin as a means of payment, which makes bitcoin a smart investment.
Risks of Investing in Bitcoin
The value of Bitcoin fluctuates a lot which makes the price go up and down thousands of dollars during any month. But if you consider cryptocurrency as a smart long-term investment, these fluctuations should not unsettle you too much.
Another reason you may want to reconsider investing in Bitcoin is its price. A single share of Bitcoin costs over $50,000, which most people may not be able to afford to buy whole shares of the stock.
Ethereum is a network which allows developers to create their own cryptocurrency using the Ethereum network. Even though Ethereum is far behind bitcoin in value, it is also far ahead of the other competitors . Ethereum came out years after some other cryptocurrencies, but still far exceeds its place in the market because of its unique technology.
Risks of Investing in Ethereum
Since Ethereum uses blockchain technology, it has only one ‘lane’ for conducting transactions. This can lead to transactions taking longer to process when the network is overloaded.
BinanceCoin was among the few cryptocurrencies that reach its peak after 2017. In 2017, there was a bull market and the price of all cryptocurrencies rose on it, reaching a peak before plateauing and decreasing in value.
Binance coin unlike some other cryptocurrencies has continued a slow but consistent upward trend after 2017. Owing to its performance, Binance Coin has proven to be one of the more stable investment options only posing fewer risks.
Risks of Investing in Binance Coin
Binance was created by a company instead of a group of tech developers. Even though Binance Coin’s commitment to maintaining a strong blockchain has won over many skeptics, some investors still don’t trust it enough because of its potential security issues.
Of all the cryptocurrencies, Tether is the most stable of them all because it is tied to the U.S. dollar. For each unit of Tether, there is one dollar in the Federal Reserve Bank. This makes this cryptocurrency great for investors who want to transact with their cryptocurrency.
Risks of Investing in Tether
Questions were raised by investors over the actual reserve stock. Some on the other hand are in doubt that there is truly a U.S. dollar in the reserve bank for each Tether unit. If this is ever disproven, the value of Tether’s could quickly drop.
Chainlink is a unique cryptocurrency that has an appealing price. Even though its shares are affordable to buy, they are also priced high enough to not be considered penny stocks. This makes it appealing to investors because it has proven that It can increase in value and still has a lot of room for growth.
Chainlink is also available for trading on Coinbase which is one of the world’s largest cryptocurrency apps. Chainlink is also more accessible.
Risks of Investing in Chainlink
Chainlink has a lower volume and market cap than more appealing cryptocurrencies which is why it ranks so low on the top 10 list.
The Cardano network has a smaller footprint, this is actually appealing to investors for a number of reasons. With Cardano, it takes less energy to complete a transaction than with a larger network like bitcoin. This makes transactions faster and cheaper.
Cardano boasts of being more adaptable and more secure and consistently improves its development in a bid to stay ahead of hackers.
Risks of Investing in Cardano
Even if Cardano has a better network, it may still not be able to compete with larger cryptocurrencies. Fewer adapters simply mean fewer developers and this is not appealing to most investors who want to see a high adoption rate.
Litecoin was originally established in 2011 and hit the market at the same time as bitcoin. Be it as it may, it didn’t take off in the same way. This cryptocurrency, boasts of completing transactions four times faster than bitcoin.
In 2017, Litecoin was the first cryptocurrency to complete a Lightning Network transaction, the transfer was completed in less than one second. This is to say that if Litecoin expands its use of Lightning Network for faster transactions, Litecoin’s value could dramatically increase.
Risks of Investing in Litecoin
Litecoin is closely linked to bitcoin and as such its value will generally fluctuate along with that of Bitcoin.
Cryptocurrency is not a get-rich-quick scheme rather it is to be seen as a long term network which you can invest in.