While this is, of course, good news for the future of blockchain technology, it doesn’t make the average crypto investor’s life any easier. With more new currencies to track, massive amounts of data to sift through, and new developments making headlines each day, a crypto investor can get overwhelmed pretty easily.
Fortunately, we’re here to break things down a little.
If you’re looking to create a strong, diversified portfolio, here are our top ten recommendations for cryptocurrencies towards the end of 2021, what to know about them, and how they may perform as we move into 2022.
Top 10 Cryptocurrencies in 2021
No big surprises here. As the most universally recognized crypto ever made, Bitcoin has revolutionized finance in many ways ever since its launch in 2009 and rules the roost when it comes to cryptocurrencies.
One of the biggest reasons to invest in BTC, especially for beginners, is its considerable liquidity. With mainstream momentum in its favor, Bitcoin is incredibly easy to buy and sell – you will always find someone to match your order on the hundreds of online exchanges available today.
The main reason to back Bitcoin is its overwhelming market share – over 60% of all cryptocurrency is in the form of BTC. This almost guarantees the push towards higher valuation and widespread usage – exactly what a crypto investor should be aiming for.
While Bitcoin may have been the source of our current crypto boom, Ethereum does have the distinction of being the first major project to add smart contracts into the equation.
In simple terms, smart contracts refer to programs written to run on the Ethereum blockchain. Users can then interact with them for a host of unique functions, such as digital ID management, replacing middlemen in transactions, and even banking applications such as mortgages, bonds, insurance claims, and more.
Founded by crypto experts Vitalik Buterin and Joseph Lubin, Ethererum offers a loyal dev team and community, and fascinating use case scenarios. From a trade standpoint, it even offers high liquidity as the 2nd highest crypto by trade volume, right behind Bitcoin.
An interesting project spearheaded by Binance, one of the world’s most popular crypto exchanges, BNB was launched to further facilitate trades and reward Binance’s user base.
Launched back in 2017, BNB powers the entire Binance framework. Initially used as a utility token to claim trading fee discounts, BNB can now be used for regular spending, to invest in early-stage crypto startups, and even proof-of-stake applications.
Much like Ethereum, Cardano is a flexible, sustainable, and scalable blockchain platform that has one central goal in mind – to become the most environmentally sustainable and decentralized crypto on the market.
It aims to accomplish this by using a unique consensus mechanism called Ouroboros – similar to the upcoming ETH2 update to Ethereum. Most cryptocurrencies such as BTC use a ‘proof-of-work’ system where massive amounts of energy are spent to authenticate transactions.
Not only is this wasteful – it tends to concentrate mining control within a few major corporations that can afford to own massive server farms.
Cardano, on the other hand, uses a ‘proof-of-stake’ system. The idea is simple – the more ADA you hold, the more stake you have. This stake is then used to determine who can mine a block on the blockchain. Cardano also puts a heavy emphasis on ‘stake pools’, where multiple delegates can combine their total stake and earn shared rewards in the form of more ADA.
One of the major ‘stablecoins’ in circulation, Tether is a cryptocurrency with tokens that are pegged to $1.00 in value. Originally launched as ‘RealCoin’ in 2014, it has now become a major player – representing 57% of all bitcoin traded into stablecoin, with a market cap of nearly $70 billion.
Since it’s tied to a traditional fiat currency, it’s a popular choice for crypto investors who are looking to circumvent the massive volatility found in most cryptocurrency investments. It creates a bridge of sorts between the U.S. dollar and other cryptocurrencies – one that offers stable, transparent transactions with low transaction charges.
This means that Tether functions as an excellent medium of exchange and store of value, rather than a speculative investment such as Bitcoin.
While new on the block, Solana has been positioned by crypto journalists as something of an ‘Ethereum-killer’ – and has very good reasons to be called so.
For starters, 2021 saw an explosion in both value and transaction volume as thousands of users flocked to SOL as their decentralized finance and NFT solution of choice. This catapulted the Solana blockchain into several top 10 lists, furthering its popularity.
The main draw of Solana is its incredible scalability and transaction efficiency – the SOL blockchain can handle a stunning 50,000 transactions per second, at transaction costs of $0.0001 per transaction. This makes it way more effective than Ethereum, even considering what we know about Ethereum 2.0’s launch.
Created by US-based Ripple Labs Inc, XRP is a coin developed primarily for the purpose of modernizing and streamlining international currency transfer.
Sending fiat money around the world can be quite expensive, with banks and other financial institutions charging high rates to process any money transfers. XRP not only cuts down on this cost – it even makes the process instant and secure.
While regular transfers may take days to process by outdated banking systems, Ripple claims that XRP transfers can be processed in under four seconds.
Across its near-decade of existence, XRP has faced quite a few challenges, such as a major lawsuit from the US Securities and Exchange Commission (SEC), but continues to showcase its usefulness on the world stage, with a rising market cap of over $50 billion and major adopters in the banking sector.
While setting up blockchains has become increasingly common, there’s been very little exploration done with respect to connecting and linking actual blockchains. That is until Polkadot launched in 2020.
The central idea is that the Polkadot protocol allows different blockchains to securely link up and exchange data, without any intermediary. This application is extremely important and has a lot of value as we move towards 3rd-generation cryptocurrencies.
Designed for speed and scalability, the protocol links together main blockchains by using ‘parachains’ – application-specific blockchains that massively speed up transaction speed as well – Polkadot can handle more than 1,000 transactions per second, compared to BTC’s 7 and ETH’s 30.
Everyone’s favorite meme coin, DOGE represents an internet joke that has morphed into a fairly popular blockchain based on the underlying tech of Litecoin.
With its famous ‘Shiba Inu’ image, it’s become a mainstay of meme culture amongst crypto enthusiasts, and offers a unique proposition – while most cryptocurrencies have a ceiling on how many coins can concurrently exist, Dogecoin has no such limit.
While the coin has a relatively low value at around $0.24 at the time of writing, it represents its own fun, casual side of the crypto world, and has become a popular crowdfunding choice due to its low value per coin and high level of community participation.
Relatively new to the stablecoin scene, USDC launched in 2018 as a collaborative project between fintech innovators Circle and major crypto exchange Coinbase.
Serving as an alternative to other dollar-pegged currencies such as Tether, USDCoin works by keeping actual dollars in reserve, in accordance with U.S. law. In fact, all USDC issuers are legally obligated to report their holdings – making this a very stable token.
Final Thoughts
If there’s anything to take away from this list, it’s that the future of crypto is filled with opportunity and promise. Each option we’ve discussed above represents a large variety of innovative and interesting projects that also offer major gains for investors.
That said, it’s important to keep a few factors in mind before heading off to your favorite crypto exchange. Before you invest in a new cryptocurrency, ask yourself the following questions across these 3 factors:
Track Record
How long has the currency been around? How has it performed since its launch, and does it currently exhibit price stability?
Technology
How efficient, innovative, and scalable is the technology involved? Does the cryptocurrency run on proof-of-work, or proof-of-stake? What security measures have the crypto team put in place to secure your transactions?
Popularity
While new currencies may exhibit unique and valuable ideas to the public, how well has the currency spread? How many exchanges is it available on? Can you use this currency to make regular purchases?
These 10 exciting options are a great place to start – but it’s important to partner with a trusted exchange that helps you understand the nature of your crypto investment.
That’s where BitTrust comes in. With a beginner-friendly approach towards crypto, BitTrust can help you set up crypto wallets, learn the ropes, and give valuable advice regarding your cryptocurrency portfolio – get in touch for a great consultation that’s tailored to your crypto needs.
In Bitcoin we Trust™
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