Even if you’ve been living under a rock, you’ve probably heard about the Bitcoin boom in 2017 and the subsequent rise of Bitcoin billionaires.
However, it’s didn’t disappear right after. As a matter of fact, Bitcoin topped $50,000 as of last month, which aided in its mainstream acceptance. If you’re a newbie in the cryptocurrency field, it’s very easy to get overwhelmed by the sheer amount of choices available to you.
But, no worries. You’ve come to the right place. Keep on reading for our full breakdown on how to pick the best cryptocurrency to buy, as well as the key cryptocurrencies currently available on the market.
What Is the Best Cryptocurrency to Buy in 2021?
Before we delve into the strategies you’ll want to use when picking the best cryptocurrency to buy in 2021 (and beyond), let’s take a look at the actual cryptocurrencies that are making a killing on the market.
We can’t start without talking about the current king of cryptocurrencies, Bitcoin. It’s not only the most popular of the bunch, but it actually has around a 40% share of the market cap. It dominates the market, and it’s also one of the oldest cryptocurrencies available.
Admittedly, Bitcoin prices tend to fluctuate, but it’s showing great promise in 2021, so you’ll want to hop on the train now before the boom happens.
In 2019, Ethereum had a total market cap of approximately $70 billion, with a price of around $720. That’s actually less than its rates at the beginning of 2018, when Ethereum reaches its highest recorded price of $1,423 in January of that year, with a total market cap of $138 billion.
That boost in 2018 made the prices skyrocket and placed Ethereum as the second-largest cryptocurrency on the market, right behind Bitcoin. Yet, it’s important to know that the Ethereum community found out that it’s been hacked in 2016, which caused the price to drop severely from $21.52 on June 17, 2016, to $9.96 the next day on June 18.
Also known as XRP on the market, Ripple sort of broke the cryptocurrency market in 2017 with a growth rate of 36,000%. Yes, it shot through from $0 to almost $2.4 at the end of 2017.
Right now, the currency is set at $0.20. So if you’re comfortable with high degrees of risk, you’ll probably like investing in Ripple.
Similar to Ripple’s insane growth in 2017, Litecoin also experienced a growth of 8,000%.
Besides, you’ll be delighted to know that Litecoin is the 5th largest cryptocurrency on the market with a cap of approximately $11 billion. One of the reasons why Litecoin is so popular with many investors is its close connection to Bitcoin.
Moreover, Litecoin was the first cryptocurrency on the market to perform a “lightning network” transaction in May 2017.
Basically, a Lightning Network is a new technology that turbo-boosts the speed of transactions on the blockchain network. Litecoin was able to conduct a transaction that transferred funds (around 0.00000001 Litecoin) from Zurich to San Francisco which took less than one second.
How to Pick the Best Cryptocurrency for Your Portfolio
Now that you’ve got a nice breakdown of the top-performing cryptocurrencies on the market, for both 2021 and beyond, it’s time to take a look at the actual strategies that will help you make your decision when shopping for the right cryptocurrency for your portfolio.
Choose the Appropriate Level of Risk
You’ll want to start by using the right cryptocurrency that matches your preferred level of risk.
Generally speaking, you’re probably aware that Bitcoin is the most stable of the bunch, so you can start with BTC as a beginner, then diversify your portfolio as you become more and more familiar with cryptocurrencies and their fluctuations.
After all, stable currencies are designed to mimic flat currencies. This helps in keeping the price fluctuations to a minimum and attracts different kinds of investors.
Regardless of the cryptocurrency you choose, you’ll want to buy them from a reputable source like this platform. You can easily check their homepage here.
Do Your Own Independent Research
Investing in cryptocurrency is not the time to skimp on solid research. Of course, listing to a company’s representatives and the market experts is an important step, and it’ll give you unique insights that can be invaluable to your decision-making.
However, nothing substitutes your own unbiased research. So start by looking at your preferred cryptocurrency’s historical charts. Other areas of interest are the market cap and the circulation rates, so don’t get stuck on the price alone.
You’ll want to choose a cryptocurrency with a solid growth stage, and a stable record of continuous growth. If a cryptocurrency is showing a severe drop in its market cap, it’s better to stay away. This is an indication of dying demand, which means that selling it would be a loss.
Keep an Eye Out for Possible ICO Offerings
Nothing triumphs the wins you can gain from going for Initial Coin Offerings (ICOs).
This is the key method for digital currencies to gather working capital and roll out new cryptocurrencies on the market. You can think of it as a similar process to the stock market, where you bet on a company’s ability to deliver a product or service, and you’ll be getting returns for your investment.
Stay Vigilant and Aware of the Market
This isn’t the type of market where you throw your investment and forget about it.
It’s crucial to your returns to stay vigilant and monitor your portfolio rather closely. You’ll also want to keep up with the latest news of the cryptocurrencies market, and routinely conduct independent research, even after you’ve already invested in a specific cryptocurrency.
Ready to Diversify Your Portfolio?
We know how scary the cryptocurrency investment market can look, especially for novice investors.
However, we hope that our guide on the best cryptocurrency to buy for 2021 and beyond has shed some light on the key cryptocurrencies that are performing well, and also how to go ahead and make your decision.
Just remember that when you’re in doubt, there’s no such thing as too much research. So, put in the research hours and we can assure you that you won’t regret it.