The year 2020 has not been an easy one and has witnessed a fair share of setbacks, ups and downs of trends in the global economy at the same time. The increased popularity of DeFi projects has triggered a new surge in demand for cryptocurrencies and a steady rise in the price of the cryptocurrency king, bitcoin, which has reached its highest point.
The cryptocurrency market is the most favourable to invest in right now for many reasons. First, national currencies are devaluing, while cryptocurrencies are proving to be a new medium for savings and even a way to add value. Secondly, cryptocurrency payments are becoming increasingly popular. Tesla and HGreg offer bitcoin to pay for cars, Dogicoin can be used to pay for tickets to NBA games or electronics from Newegg, and PayPal offers access to a range of digital assets.
Despite these benefits, many still wonder whether cryptocurrency is an investment tool or a pyramid scheme. Investing wisely, too, requires first deciding on the currency in which you will be investing. Several criteria can be used to determine whether to invest in a particular asset, and the question of how to choose a cryptocurrency to invest in is acute. But it is also important to predict the outlook for cryptocurrencies in 2021 to select the most promising ones.
To develop a complete concept for evaluating cryptocurrencies, it is important to keep in mind specific themes like benefit, scarcity, perceived value.
This is how a coin can be used in the specific blockchain network it is associated with. For example, it can serve as a tool for accessing project features or as a reward for different actions - serving as an internal unit of account. The network itself is also worth looking at - its current bandwidth, fees and scalability.
It's also worth looking at the cryptocurrency's place among its competitors. Being first to market is a big advantage, and it's the reason Bitcoin has risen to prominence. However, every new cryptocurrency that comes to market often takes into account the shortcomings of the previous ones.
Supply and demand
When trying to assess the usefulness of a coin or token, you need to look at the demand. If a coin has limited supply, then over time the price should theoretically continue to rise as demand demands. Conversely, if the coin continues to increase in supply, it decreases in value.
Since December 2020, there has been a situation where institutional market participants are buying more BTC than miners are mining. This allowed bitcoin to reach a new high of $28,000 in the past year, and later to continue its upward movement.
A sharp rise and sudden fall in cryptocurrency prices are quite common. As the market stabilizes, volatility gradually decreases. Factors that affect the value of a cryptocurrency are mainly as follows:
Demand and supply determine cryptocurrency prices as they have either a limited or predetermined number of coins. Some tokens are tied to an external traded asset and their market capitalisation will be directly dependent on the dynamics of that asset. Usually, this asset is relatively stable in value - for example, gold.
Media coverage plays an important role in determining the value of a given crypto asset. Project developers are aware of the influence of the media on the perception of a cryptocurrency's value. They often coordinate with these media outlets and have a few moles on forums whose sole purpose is to get people interested in the developers' projects so that more people start buying their coins, causing the price to rise.
Community support is one of the most valuable assets a cryptocurrency can have. An active, engaged community that fully shares the team's vision is very valuable to the development of a cryptocurrency's prospects. When these communities are formed by real participants rather than bots, they are undoubtedly informal and complimentary public relations departments, constantly working for the good of the reputation of the projects they support.
Communities can also form around Layer 2 solutions that integrate with the core network. Or, in the case of Ethereum-like ecosystems, around decentralized applications.
When the spectre of regulation looms over cryptocurrency markets, they often react with either a fall or a boom, depending on the country where the regulatory change occurred.
Investing in cryptocurrency requires an understanding of trends. Here are some examples of the most promising cryptocurrencies to invest in 2021, which could grow in value and become a good asset to invest in. The following is a list of the top cryptocurrencies to invest in.
Gold Secured Currency (GSX)
GSX is a stabelcoin hosted on the Apollo blockchain whose main advantage is the ability to remain constant in value thanks to quantum technology and a link to gold. GSX maintains the value of gold and gold-rich land owned by Apollo Fintech in Zimbabwe.
ETH has a market capitalisation of over $460 billion and a price tag of $4,000 as of May 2020. Ethereum 2.0 (also known as Serenity) is an update that aims to add beacon chains, sharding and Proof-of-Stake (PoS) to the Ethereum blockchain. Such changes will increase speed and efficiency and allow investors to bet on their assets and earn well.
Separately, decentralised exchanges support the Ethereum ecosystem. For example, the Uniswap exchange's token, UNI, is among the top 15 largest cryptocurrencies at a capitalisation of over $20 billion.
Chainlink is a decentralised oracle network powered by the Ethereum blockchain. It links data sources to smart contracts on the blockchain through 'oracles'. These oracles are on the LINK network, which has shown great growth in 2020 and is trading at $45 at the time of writing.
Cardano is another cryptocurrency with its blockchain for proper decentralisation, scalability and stakes. It trades at $1.8 with a market capitalisation of $60 billion.
Aave is a well-known peer-to-peer lending platform on the Ethereum blockchain, and its LEND token is worth $575 at the time of writing. The platform promotes profits by lowering transaction costs for users, as well as allowing them to act as protection against malicious borrowers. Over time, its value may rise due to token burn through transaction fees.
This list only gives an idea of which cryptocurrencies have the highest prospect for investment in 2021. There are also many potentially promising cryptocurrencies for investment to keep an eye on.
Cryptocurrency as an investment tool has long shown itself to be beneficial, but whether you're looking for attractive projects for long-term investment or to focus on instant transactions, investment platforms allow investors to stay up to date and react quickly.
When choosing a trading platform, one should first focus on the functionality available to facilitate their tasks. Built-in tools for market analysis and expert advice help investors to create their own strategies and enable them to invest automatically, allowing users to open and close trades without the involvement of the platform. In addition, a lot of sensitive information, such as current and planned transactions, transaction history, available balance information and more, are stored in users' account.
Broex is the best investment platform at the moment, providing its users with a user-friendly and easy-to-use interface, where investing is the easiest thing to do. Broex is a reliable way to keep track of the various factors for successful cryptocurrency trading. Key benefits of Broex for investors include:
- Quick and easy registration;
- The ability to fund your account with bank cards;
- Choice of 30 cryptocurrencies to invest in;
- Tracking returns.
Broex is an official partner of the famous Binance trading platform and will soon offer advanced functionality in the form of a mobile app, real-time asset rate alerts, portfolio investments and more.
Other advantages of Broex include:
- High security with a secure online wallet;
- Intuitive and user-friendly interface;
- 0% hidden fees.