The growth of the cryptocurrency market has been nothing short of impressive in recent years. In 2018 alone, the Bitcoin market cap grew by more than 3-fold and other cryptocurrencies experienced similar growth rates. BTC remained the king of the crypto realm—it was always the frontrunner by market cap and value, hence its unparalleled position as the best asset class of the decade. This year, despite BTC’s influence over the market, which also helped bring cryptocurrency to stardom in the early 2021 bull market, it was altcoins that truly shone in the new era of influence, which prioritises blockchain use cases over pining over digital gold. Lets know about Top Bitcoin Contenders From The 2021 Bull Market.
Altcoins: The Next Generation of Bitcoin
Altcoins have been around for a decade, starting from early renditions based on the Bitcoin blockchain, such as Litecoin and Bitcoin Cash. According to The Top Coins, there isn’t a huge difference between altcoin vs Bitcoin, as they’re essentially both blockchain networks that house a native coin or token. The only difference is that altcoins make up the category of cryptocurrencies minted after Bitcoin’s legendary claim to fame in 2010.
What sets altcoins apart are their unique value propositions, which span various use cases that play a role in improving the foundation that Bitcoin laid out and innovating the metaverse by creating a decentralised solution to an existing issue.
For instance, VeChain (VET) solves problems in the supply chain by digitising the end-to-end process, from planning to solving consumer waste. Ethereum (ETH) offers a platform where developers can build decentralised applications through smart contract technology, enabling anyone to contribute to decentralising the internet. Likewise, it also allows developers to mint tokens through various standards, creating an entire ecosystem for digital currencies.
How Altcoins Overtook Bitcoin’s Growth in The 2021 Bull Market
Bullish cryptocurrency runs are always spearheaded by Bitcoin, as its influence is strong enough to lead the entire market up or down. The same happened in Q4 of 2020 when BTC shot up in value thanks to nervous investors seeking a hedge against inflation. In addition, COVID-19 made the traditional investment market shaky, so speculative digital coins became the most sensible solution to maintaining wealth amid the possibility of fiat money losing value.
Around the same time, NFTs, or non-fungible tokens, which are digital assets in the form of images, gifs, videos, music, and more, started gaining traction. The most influential artist in this field, Beeple, was able to sell NFT digital artworks for over $60,000 in ETH, as they were minted on Ethereum through the ERC-721 standard. This event marked the start of a growing interest in the NFT sector, which would later play a huge role in ETH’s astronomical growth over a short period.
The Q2 Altcoin Rally
While BTC gained immediate value from the institutional influence of PayPal, Tesla, and more, altcoins needed more time to break into the bull market. In early March, Terra (LUNA) skyrocketed to $21—it was just under $1 in January. South Korean investors were particularly notorious for pouring investments into this extremely innovative blockchain project, marking the start of the altcoin rally in Q2 of 2021.
In mid-May, Ethereum saw its peak of over $4,400 (up by over 50% since the start of the year), thanks to the growing influence of the NFT market. Following Beeple’s $69 million sale of a digital collage of artworks, NFTs became a worldwide sensation—digital artists, luxury brands, and even music artists were joining the bandwagon.
Meme Coin Era
It was also during this time when Elon Musk began shifting his interest from Bitcoin to Dogecoin (DOGE), the infamous meme cryptocurrency that was created as a joke—now a major gold mine for early adopters. The coin quickly shot up in value by over 900% in under a month following the billionaire’s series of tweets alluding to his DOGE investment. As a result, Dogecoin millionaires started popping up worldwide, and meme cryptocurrencies became the internet’s next obsession.
Other meme coins like SHIBA INU (SHIB) and MonaCoin (MONA) began growing in value, amassing community support from investors looking to score big from less serious blockchain projects.
Best Performing Altcoins in Early 2021
While the entire cryptocurrency market is suffering from the aftershock of a massive sell-off following tighter government restrictions in China and Tesla’s pull-out from its promise to accept BTC as payment for its cars, blockchain projects continue to innovate despite all odds. On that note, these are some of the best performing altcoins in early 2021.
Terra coins, known as LUNA, are the new utopian currency created by a network of unmanned solar-powered data centres called “Moons.” The Terra team has been working diligently to create an autonomous framework for running decentralised applications and smart contracts that takes care of all the mundane tasks needed to keep them up and running. While it has suffered from the intense volatility of the cryptocurrency bear market, LUNA continues to be a coin with massive potential to scale up due to the strength of the Terra blockchain and its incredible use cases moving forward.
Paxos Standard Token (PAX)
The Paxos Trust Company was originally founded as a real estate transfer agent before they began exploring blockchain technology with US dollars back in April 2018. Since then, the company has developed PAX, a stablecoin backed by USD and operates on the Ethereum blockchain. The token successfully achieved a “Level-One” regulatory approval with FINRA in November 2018 before trading on exchanges such as Gemini, Binance, and OKEx. Paxos Standard Token shares many of the same benefits as Bitcoin but with a more favourable fiat exchange rate that makes it easier to cash out for everyday users who don’t want or need to deal with difficult cryptocurrency taxation laws regarding capital gains or losses.
Cardano’s ADA is a peer-to-peer, decentralised cryptocurrency designed to allow people in emerging markets, such as Africa and South Asia, to buy goods online without having to pay high premiums. It’s one of the best altcoins with the potential to scale up due to its robust use cases, which mirrors Ethereum’s smart contract-based platform. However, Cardano exceeds Ethereum by being scalable to as much as 1,000,000 transactions per second while being eco-friendly due to its Proof-of-Stake consensus model. In addition, Cardano can do what Ethereum does best—from facilitating the development of decentralised apps to allowing anyone to mint tokens and NFTs directly on the platform.
Stellar is a decentralised, open-source network that connects banks, payment systems and individuals with the goal of improving global payments. It’s one of the top cryptocurrencies in terms of providing a frictionless experience for cross-border transactions and micropayments (smaller than $100), which Bitcoin cannot process due to high fees and slow confirmation times. Stellar isn’t just aiming at removing financial institutions from transaction processing; it wants to put people back into control by making them responsible for their personal data. Its 1,000% growth in the past year proves its relevance in today’s crypto market, which craves coins that can be treated as currency rather than digital gold.
Is Now a Good Time to Buy Altcoins?
Due to cryptocurrency’s speculative and volatile nature, it’s challenging to predict when is the best time to buy and sell holdings—especially as the market is prone to succumbing to emotions, as evidenced by the recent panic sell-off after China’s government-issued crypto crackdown. However, a massive interest in coins, demonstrated by the recent bull market, is also a result of new investors wanting to join in the hype—a once-in-a-lifetime investment opportunity to generate quick cash.
While the market is not nearly as heated as it was just two months ago, the low prices are an indication that now is likely a good time to buy coins—but only if you’re willing to risk the possibility of HODLing for a long period before seeing any significant growth. Before 2020, the last cryptocurrency bull run happened in 2017. If history were to repeat itself, then it will be years before coins see a major increase in market value again—and only if a catalyst pushes for their growth.
Ultimately, there are risks involved in delving into the world of cryptocurrencies. They’re not going away anytime soon, but their relevance in the near future is also compromised due to the increased fervour in government crackdowns. Your best bet is to invest what you’re willing to lose when prices are low and then sell when you’re confident in the total gains.