Millions are planning to enter the crypto world but do not know how to make their way into the maze of several cryptocurrencies that are being offered by different exchanges across the world. We can help you get started with the top cryptocurrencies that you can invest in.
Before going through the list, it is important to understand the factors that have been considered for preparing this list of top cryptocurrencies to invest in:
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1. Business use case
A crypto project is valuable only if it can give value back to the crypto industry. It is important to understand the business use case of any cryptocurrency that you plan to invest in
2. Market Cap
Always take into account the market cap of the coins that you are investing in. There are small caps, mid-cap, and large-cap coins. Small and mid-cap coins have the potential to make life-changing money for you but are equally risky. On the other hand, large-cap coins are comparatively stable but offer comparatively low returns.
3. Diversification
You should focus on diversifying your portfolio across the various growing industries like blockchain, DeFi, Gaming, Metaverse, etc. Diversification helps in spreading your risk across the different sectors of the crypto market.
4. Community engagement
You need strong community support for any crypto to gain scale and success. The community needs to be aware of the business use cases and how the crypto asset can make a difference in the world.
These are the top 5 cryptocurrencies to invest in 2021:
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1. Bitcoin (BTC)
This is a no-brainer. The king of cryptos has to be there on the list. Based on distributed ledger technology (DLT), Bitcoin has emerged as a preferred peer-to-peer payment mechanism that works seamlessly across the globe.
Since the supply is capped at 21 million, Bitcoin or BTC is scarce. El Salvador has accepted Bitcoin as legal tender. Bitcoin is accepted as a store of value and medium of exchange throughout the world.
Although the price of Bitcoin has zoomed in recent years, it still has the potential to continue its growth run for the foreseeable future.
2. Ethereum (ETH)
Ethereum is the second most popular cryptocurrency in the world. If Bitcoin has given the crypto industry blockchain, Ethereum’s rise is based on the concept of smart contracts. A smart contract is an improvised version of the traditional contract which does not require any third party to ensure the execution of the contract.
The smart contract feature resulted in a drastic increase in the business case for Ethereum. Developers can build a smart contract-based application on Ethereum and deploy them. These are popularly known as decentralized applications or dApps.
3. Polkadot (DOT)
Polkadot’s unique design that connects various blockchain networks into a single unified network has made it popular as the internet of blockchains. Its parachain design allows several blockchain networks to work at the same time and makes it faster than Ethereum.
Polkadot has been able to launch an improvised version on the Ethereum network. DOT is the in-house token of Polkadot. With a market cap of over $28 billion, Polkadot regularly features in the top 10 list of cryptocurrencies by market cap.
4. Decentraland (MANA)
Decentraland is a decentralized virtual world built on the Ethereum network. It is important to note that the project is a combination of virtual reality, gaming, and blockchain technology.
Decentraland is one of the leading projects in the area of virtual and augmented reality. It has already proven its worth in real money terms as a digital asset. Recently, a piece of land was sold on Decentraland for a massive $900,000. There is already a Decentraland Games casino in there and Kraken has set up its headquarters in Decentraland.
With a market cap of around $1 billion, experts believe it has the potential to grow much more as a decentralized virtual economy. This is our dark horse pick in this list.
5. Uniswap (DEX)
Uniswap is built on a smart contract on the Ethereum network. It is a Decentralized Crypto Exchange (DEX) that does not need any human to run or manage it.
Since there is no human interface involved, the identity of the buyer and seller is kept completely anonymous. Also, the transactions are conducted by way of a smart contract and without any trusted intermediary.
UNI is the in-house token of the platform. It has a market cap of over $15 billion.
These are the top 5 cryptocurrencies that you can choose to invest in. Please note that this information is for educational purposes only and should not be taken as investment advice. Please do your research before deciding to invest.
