The best cryptocurrencies to invest in other than Bitcoin are discussed in this article.
Bitcoin was created to enable peer-to-peer (P2P) transactions. But, cryptocurrencies have become more popular as tradable assets and stores of value.
Compared to the stock market, cryptocurrency has multiple benefits such as fractional purchase, 24/7 trading, transparent order books and fees, effortless transactions, etc.
Apart from trading, investors can also generate passive income through staking, yield farming using cryptocurrencies
The top 7 altcoins to look out for in 2021 are Ethereum, Binance Coin, Cardano, Tether, Ripple, Solana, and Polkadot.
Investing money is one of the best ways to build wealth over a long period. While it is not a new thing for people to invest money in a profitable source, investing in cryptocurrencies is certainly a new phenomenon. Though the original cryptocurrency Bitcoin was invented a decade back, the space is getting more attention from the past few years due to numerous use cases of altcoins.
Bitcoin was created to eliminate third-party financial institutions to make transactions from one person to another. However, it is becoming more popular as a store of value or as an asset. In today’s world, cryptocurrencies are considered as an investment opportunity rather than using them for P2P transactions. Let us look at the differences between stocks and cryptocurrencies before looking at the best altcoins to invest in.
Is crypto better than stocks?
The stock market has been around for centuries while cryptocurrency is a new concept. Stocks of a company offer equity or ownership of that company to investors. In the case of cryptocurrencies, the investor has rights to a certain amount of the digital asset that can be sold or hold onto.
Cryptocurrencies are considered high-risk investments compared to stocks as they are highly volatile. But in real-time, the price of stocks also goes up and down involving significant risk. The price changes of cryptocurrencies depend on supply, demand, and adoption. Whereas, the price changes of stocks are directly linked to the company’s performance.
The innovative technology of cryptocurrencies provides multiple features and benefits like providing liquidity with the help of automated market makers. Some notable advantages of the crypto market over the stock market are
24/7 trading around 365 days in a year
Transparent order books
Variable and transparent fees
Apart from these, the cryptocurrency market allows the inventors to generate passive income by staking, yield farming, earning rewards by lending funds to a DeFi pool, etc. And since the industry is relatively nascent than the stock market, there can be quite a number of scams. While crypto industry holds significant potential, it is also necessary to perform your own due diligence and research before investing.
Top 7 cryptocurrencies to invest other than Bitcoin
It is overwhelming to get started in the crypto market as there are thousands of cryptocurrencies. Altcoins, cryptocurrencies other than Bitcoin, are emerging as a new trend by enabling use-cases in different sectors. Some altcoins have improved features compared to the oldest cryptocurrency, Bitcoin. Best altcoins that are performing well, are discussed below.
Ether, the native cryptocurrency of the Ethereum network is the second-largest cryptocurrency in terms of the total market cap and the coin’s price. Ethereum is one of the favourable blockchain network of developers because of its applications in DeFi space, NFTs, and smart contracts.
Ethereum’s price has increased significantly in the past five years. The price raised from $11 to $3,000 which is more than 27,000% growth. According to CoinMarketCap, ETH is trading around $3,500 as of October 2021 and the total market cap is over $426 billion.
Binance Coin (BNB)
Binance Coin is the native token of the leading crypto exchange, Binance. BNB is built on the Ethereum blockchain and the platform issued the coins as utility tokens. They can be used for trading as well as for fee payment on the Binance exchange. The BNB coins can be exchanged for other cryptocurrencies like BTC and ETH.
BNB coin was worth $0.10 in 2017. As of October 2021, it is trading at more than $400 resulting in a 382,000% growth in five years. The total market capitalization of BNB is $73.7 billion.
Cardano is known for its proof-of-stake mechanism which helps in increasing the speed of transactions by decreasing energy usage. This cryptocurrency is designed to reduce the environmental impact, as a sustainable blockchain network. Cardano is similar to Ethereum in terms of enabling smart contracts and DeFi applications.
Cardano’s ADA is trading at $2.30 at the time of writing which is 10,500% more compared to its price of $0.02 in 2017. As of October 2021, the total market cap of Cardano is $73.2 billion.
Tether is a stablecoin pinned to the US dollar. It was designed to be always worth $1. Unlike other altcoins that are subjected to price fluctuations, Tether is always stable and trades at $1. Investors who are careful about the altcoins’ volatility choose Tether coins. As we mentioned, it is always worth $1 and the total market cap is $68 billion in October 2021.
XRP was created by a digital technology and payment processing company, Ripple Labs Inc. XRP coins are used for payments, asset exchange, and remittance systems of borderless fund transfers. It also facilitates exchanging different types of currencies including fiat currencies.
The price of one XRP coin was $0.006 in 2017. As of October 2021, XRP is trading at $1.09 having a considerable growth of more than 15,700%. The total market cap is $50 billion at the time of writing.
Solana blockchain network was developed to bolster DeFi use cases like decentralized apps (DApps), smart contracts. It runs on a hybrid proof-of-stake and proof-of-history mechanisms. It is designed to execute 50,000 transactions per second (TPS). Solana is the best performing altcoin for the past few months. It is built for high-speed transactions with ultra-low fees.
Solana launched in 2020 and its price started at $0.77. As of October 2021, Solana is trading at more than $150 with a total market cap of $47 billion.
Polkadot was built with a broad vision of integrating different blockchain networks so that they can communicate and work together. It has the potential to change how cryptocurrencies are managed on an interconnected network.
It was launched in 2020 with a beginning price of $2.93. At the time of writing this article, DOT is trading at $34.04 with a total market cap of $33 billion.
Joining in on the cryptocurrency trend
Cryptocurrency trading is gaining mainstream adoption across the globe including developing countries. The ease of setting up an account on crypto exchanges and effortless buying and selling options are attracting users to trade cryptocurrencies. Altcoin trading is famous as they trade at lower prices compared to Bitcoin. Researching the market thoroughly is essential while investing in cryptocurrencies.