Today, there are multiple cryptocurrencies available for buying and investment purposes and all of them compete with one another. The cryptocurrency world is highly volatile, and cryptocurrencies can lose or gain vast amounts of value in just a few days.
If you are trying to decide on which cryptocurrency to invest in for 2021, look no further. This article will outline the top 4 cryptocurrencies to invest in as of 2021, explaining what makes each a good investment option as well as the potential risks involved.
It should come as no surprise that Bitcoin is the most popular cryptocurrency in 2021. It is the crypto that started it all and has been around for the longest time. Bitcoin has a much higher market cap and volume than any other cryptocurrency, representing around 40% of the total crypto market cap.
What makes Bitcoin one of the best cryptocurrencies to invest in in 2021 is its growing adoption rate. Moreover, retail and institutional investors are much more likely to invest in Bitcoin before dipping their feet into any other type of crypto. What’s more, many businesses today have started accepting bitcoin as a valid payment method, making bitcoin an even smarter investment.
There are, however, some risks associated with investing in bitcoin. Its popularity among crypto traders means that the exchange value of bitcoin tends to be in flux all the time. These fluctuations in value can be intimidating in the short term, increasing or dropping by thousands of dollars over just a few days. However, Bitcoin is still a very smart long-term investment option.
Ethereum has recently picked up a lot of steam on its trail as it makes its way through the crypto network. Ethereum is different from Bitcoin in that it is not simply a cryptocurrency but is also a network known as the Ethereum Virtual Machine. On the EVM, developers can create their uses for cryptocurrency, including crypto games, non-fungible tokens, and even their cryptocurrencies.
Ethereum might be behind Bitcoin in value, but it has skyrocketed ahead of all its other competitors in no time. Today, Ethereum has an 18% share in the crypto market, making it one of the top crypto to invest in for 2021.
Ethereum represents an innovative use case of Blockchain technology and decentralized finance that allows users to generate smart contracts without mediation by a third party or centralized platform.
However, there are some risks involved with investing in Ethereum. Since Ethereum has just one lane for conducting transactions, it can take a long time to process a single transaction when the network is full.
3. Binance Coin
Binance is a widely used cryptocurrency exchange platform where users can buy, sell, and trade cryptocurrencies with one another in a decentralized way. The platform hosts its cryptocurrency known as Binance Coin, which has proven to be a real crypto competitor in recent years.
Since 2021, the Binance coin has slowly but consistently trended upwards. Since then, its performance in the crypto network makes it one of the most stable cryptocurrencies out there. This means that investors in Binance Coin face fewer risks of short-term fluctuations in value.
Unlike other cryptocurrencies, Binance Coin was created by a company rather than by tech developers. Because of this, many investors are skeptical about security concerns despite the relatively strong Blockchain. Check out this full article about trading bots.
Unlike most of its crypto competitors, the value of the cryptocurrency Tether is tied to the value of the United States Dollar. In other words, for every single unit of Tether available, there is a corresponding dollar in the Federal Reserve Bank. Tether has proven to be a fantastic investment option for those who want to use their crypto to make transactions.
Despite this potential, many people have raised doubts about the reliability of Tether. Some skeptics claim that there may actually be no corresponding dollar in the Federal Reserve for every unit of Tether. If this were ever to be proven, the value of Tether would drop significantly.
With so many different cryptocurrencies to choose from in 2021, investors must perform proper research before investing in any single cryptocurrency. However, given the trends over the last few years, it would be very difficult to go wrong with any one of the four cryptocurrencies listed above.