The best cryptocurrencies to purchase is determined by your level of experience in digital assets and risk appetite.
These are five of the best cryptocurrencies on the market.
It’s been more than a decade since the elusive Satoshi Nakamoto invented Bitcoin, the world’s first and most famous cryptocurrency. Despite its popularity, Bitcoin isn’t the last word on cryptocurrency; imitators, innovators, and spinoffs abound, and there are now over 7,000 cryptocurrencies accessible. How can investors decide which cryptocurrency is the right to invest in when there are too many to choose from? Here are the best cryptocurrencies to invest in 2021, ranging from well-known to lesser-known digital currencies.
01 Bitcoin (BTC)
Since the first bitcoins were mined in January 2009, Bitcoin has dominated the market. Bitcoin’s price soared to more than $60,000 in April 2021, resulting in a market capitalization of more than $1 trillion, giving it a share of the blockchain market of more than 45 percent. Of note, Bitcoin accounted for almost 70% of the cryptocurrency market earlier this year, indicating that other cryptocurrencies might be on the rising. “Bitcoin is already commonly accepted as a safeguard against inflation and macroeconomic uncertainty by hedge fund investors and banks,” says Garrette Furo, a blockchain analyst and adviser with Cosmos Network. “At the same time, Bitcoin is establishing itself as the decentralized ‘gold standard.'”
“At the same time, Bitcoin is now becoming the blockchain finance’s ‘gold standard,’ with it being used as leverage for stablecoins, bonds, and more. As a result, Bitcoin is needed by both sides of the fence, resulting in a great deal of peace.” Bitcoin has had its fair share of uncertainty over the years, and rates have fallen from recent peaks, but being the most well-known cryptocurrency, it enjoys a level of global popularity that its less well-known competitors may not.
02. Bitcoin Cash (BCH)
Blockchain infrastructure underpins cryptocurrencies such as Bitcoin, which holds knowledge about crypto transactions in “blocks” of data that can hold up to 1 megabyte of data. As bitcoin’s popularity increased, these data blocks were overburdened, restricting transfers and raising transaction fees. Some Bitcoin developers suggested a workaround that would potentially minimize the amount of data required in each block, however others were concerned that this would jeopardize the cryptocurrency’s credibility, so they produced Bitcoin Cash in August 2017. Blocks in Bitcoin Cash can hold up to 8 MB of data, making for quicker and more regular transactions.
Blocks in Bitcoin Cash will hold up to 8 MB of data, making for quicker and more regular transactions with lower fees. While Bitcoin Cash is younger and less well-known than its ancestor, its scalability means it has enormous growth potential, putting it in the running for the best cryptocurrency. BCH started trading in 2021 for less than $500, but has recently risen to over $1,500.
03. Cosmos (ATOM)
“Over the last three or four years, Cosmos has completed what could be the most ambitious road map in the crypto space,” says Furo. “Through a breakthrough known as Inter Blockchain Communication, or IBC, the Cosmos Hub enables autonomous, separate blockchains on the Cosmos Hub to share properties and connect with one another.” The Cosmos Hub currently has over $120 billion in digital assets under its control. In comparison to other networks, it still has a very low carbon footprint, according to Furo. The Cosmos Hub’s native coin is ATOM.
If the Cosmos Hub adds additional value-added features, such as a network-specific decentralized exchange, ATOM holders who secure the network will benefit, according to Furo. Furo says. “Arguably this is the most robust reward mechanism for people who secure a network,” he adds.
04. Dogecoin (DOGE)
Dogecoin was created as a lighthearted cryptocurrency, named after the famous “Doge” internet meme of a Shiba Inu puppy. “The year of DOGE has been 2021,” says Ben Weiss, CEO and co-founder of CoinFlip, the world’s biggest crypto ATM provider. This year, the cryptocurrency has grown by more than 13,000 percent, making it the fourth-largest cryptocurrency in terms of market capitalization. Its price reached a high of more than 70 cents in early May, but has since dropped. Because of its greater circulation, Dogecoin’s price stays under a dollar. While Bitcoin has a limit of 21 million coins, Dogecoin already has 129 billion in circulation, with new blocks open to mine every year. The rise of Dogecoin can be attributed to a number of factors.
“The (Elon) Musk Effect” is primarily responsible for Dogecoin’s growth, according to Weiss. The price of DOGE has been known to double in response to tweets from Tesla (ticker: TSLA) CEO Elon Musk, who has referred to it as his favorite cryptocurrency. Weiss believes that “we will continue to see Dogecoin rally to new highs” after Musk’s latest Doge-related jokes on Saturday Night Live. However, directly after his arrival, the price of DOGE fell.
05. Ethereum (ETH)
The decentralization of money is one of the key philosophies behind cryptocurrencies. Instead of decentralizing money, Ethereum’s mission is to decentralize the internet by replacing servers with a global network of nodes, resulting in “one device for the entire planet.” Ethereum is a blockchain-based computing application that allows people to share ether, a cryptocurrency. With a market cap of more than $400 billion, Ether has become one of the most common cryptocurrencies in the world. The platform itself is the true draw: The recent popularity of Ethereum, which has increased by nearly 500% this year, “can be traced in part to the exponential growth in technology.”
The ecosystem itself is the big draw: Ethereum’s recent popularity, which has seen nearly 500 percent gains this year, “can be credited in part to the exponential development in technology that uses the Ethereum blockchain, such as decentralized finance (DeFi) and (non-fungible tokens),” according to Weiss. Another factor is the Berlin hard fork, which was implemented in April 2021 and “optimized the use of transaction fees, increased the network’s stability, and allowed for some new transaction forms,” according to him. Weiss adds that ETH’s immediate future looks promising, given that another update, known as the London hard fork, is planned for summer 2021.