Investing in cryptocurrency involves much more than purchasing bitcoin. In fact, there are estimated to be more than 7,000 cryptocurrencies available for purchase today. While cryptocurrency leaders like Bitcoin and Ethereum may seem like safe choices, getting into the world of altcoins early also holds great profit potential. That is, if you choose wisely. Unfortunately, it is hard to say which cryptocurrency is the best investment in 2021 since crypto doesn’t have any intrinsic value. As a result, the price of the coin might continue to rise in value or fall off the map entirely.
So, as a new investor, what do you choose? Here are some of the best options for cryptocurrency investing.
Following the concept of E-Gold from the mid-1990s, gold-backed cryptocurrencies never gained widespread adoption, at least until now. The concept itself is simple and has been designed to keep costs at a more stable level than bitcoin. To do so, each coin is backed by a certain amount of gold in secure storage. At any point, a trader could theoretically trade in their token for the equivalent amount of gold. Although there are now several gold-backed stablecoins to choose from, Goldcoin has continued to prove itself with a record of continuous growth. The coin can be purchased from the token creator website or on a precious-metal cryptocurrency exchange like GoldExchange.
The first and most well-known cryptocurrency continues to surprise many as it reaches new all-time highs. As a result, Bitcoin (BTC) has taken the first-mover advantage and is now being adopted by other popular payment services like Paypal and Square, making its use even more widespread.
Still a newer coin to the market, Ethereum (ETH) has gained a reputation for the underlying smart contract technology. This system allows payments to be approved or delayed based on real-world events. Although Ethereum is useful, it has a high cost per transaction (estimated at about $15). That said, smart contracts continue to be tested by many organizations and have resulted in more widespread usage. It’s relative stability also makes it an attractive investment.
4. Bitcoin Cash
Known as the younger and less popular brother of bitcoin is the cryptocurrency bitcoin cash (BCH). The currency itself was born out of the slow bitcoin transactions that resulted from an increased user base. As a result, bitcoin cash was created with 8 MB blocks to allow for more frequent transactions and lower fees. Although the coins may not be as popular as bitcoin, they offer tremendous potential for scalability.
Tron (TRX) takes an interesting approach to sharing content by using a blockchain-based platform. Tron allows content creators to directly share their content (without a middleman) and earn a profit in Tronix. The coin itself still faces various opinions as to if it will ever be mainstream. To avoid losing out, purchasing the currency early might just give you an opportunity to buy low.
Growth is imminent, which is clear to investors who look at the business decisions that have accelerated the currency’s growth, including the acquisition of BitTorrent. Even rumors of this acquisition could be attributed to increased coin prices as more traders began to see its potential.
Similar to bitcoin cash, Litecoin was also designed to improve transaction times and reduce the associated fees. Really, the only difference between this currency and bitcoin is that the underlying cryptographic algorithms are different, although it is yet to be determined if Litecoins backend is better.
The good news is that the coin is now quickly gaining popularity and being accepted in more locations than ever before. As new merchants begin accepting the coin, its popularity is only expected to increase.
Stellar (XLM) has seen a significant price increase in the first part of 2021 alone. Tokens (also known as Lumens) are used on the Stellar network, which connects banks, payment systems and other traditional finance systems in a revolutionary way. The company has now conducted more than 450 million transactions at less than a penny each. These low transaction fees continue to add to the competitive advantage created by the currency. More recently, the network has allowed for trading other popular cryptocurrencies, including bitcoin and Ethereum.
Cryptocurrency is anything but predictable. That’s why there is no one best cryptocurrency to watch in 2021. Instead, a savvy investor might plan to purchase some of each to hold for the long haul. This will help you get involved with a new and exciting avenue of investing without the putting all your eggs in one basket.