As Bitcoin (CCC: BTC-USD), Ethereum (CCC: ETH-USD), XRP (CCC: XRP-USD) and others have exploded in value, never before has Wall Street seemed so hesitant about “digital gold,” a name they use to invoke a margin of safety.
But as any experienced crypto investor knows, this is not how cryptocurrencies work. Instead, it’s a digital popularity contest where the winners keep winning and the losers bite the dust.
SO, WHICH CRYPTO-CURRENCIES CAN MAKE YOU RICH IN 2021?
To answer this question, we need to explore the world of altcoins – upcoming coins that you can buy at low prices. This is because it pays to arrive early. For example, $ 1,000 invested in Ethereum’s Initial Coin Offering (ICO) would be worth $ 3.3 million today. Meanwhile, $ 1,000 invested in Bitcoin today could earn “only” 4-5 times as much if you believe JP Morgan’s high target price of $ 146,000.
But there are also significant risks because cryptocurrencies have no intrinsic value. Instead, their value comes from their users. The more users a part has, the more useful it becomes and the more its price increases. But when a coin falls out of favor, nothing prevents it from going down to zero. This means that investing in cryptocurrency requires a strong belief that others will eventually buy it from you for even more.
Today, people invest in crypto for one reason only: to make money. So far, cryptocurrencies have kept this promise. Mom-and-Pop investors have benefited greatly from the boom in Bitcoin and other currencies.
But the risks in 2021 are increasing – at their core, cryptocurrencies are only used to transfer wealth from one party to another. And new competitors have appeared recently.
“China has already developed a cryptocurrency backed by the Central Bank, and in the United States it has been discussed as part of the C-19 stimulus,” writes Laura Gonzalez, Ph.D., associate professor of finance at California State University, Long Beach. “There is also plenty of evidence for speculation, and the value of current cryptos will be affected by future central bank-backed digital currencies.”
In other words, unregulated cryptocurrencies will one day compete with state sponsored ones.
Here’s the point to remember: If you have an extremely conservative portfolio and need to add “risky” assets, choosing a basket of top-rated cryptocurrencies might be right for you. It’s an inexpensive way to gain massive exposure to macroeconomic risks. But don’t be fooled into thinking of crypto as “digital gold”. If 2021 sees a surprise economic slowdown, no hope will keep crypto afloat.
If you’re willing to take these risks, you might want to start your research with the top 28 cryptocurrencies you need to know for 2021:
Ethereum
Bitcoin
XRP
Stellar (CCC: XLM-USD)
Cardano (CCC: ADA-USD)
Dogecoin (CCC: DOGE-USD)
Polkadot (CCC: DOT1-USD)
Neo (CCC: NEO-USD)
Celsius (CCC: CEL-USD)
Nano (CCC: NANO-USD)
Chain link (CCC: LINK-USD)
Lisk (CCC: LSK-USD)
Monero (CCC: XMR-USD)
OMG Network (CCC: OMG-USD)
QTUM (CCC: QTUM-USD)
Tie (CCC: USDT-USD)
Litecoin (CCC: LTC-USD)
Binance Coin (CCC: BNB-USD)
NEM (CCC: XEM-USD)
TRON (CCC: TRX-USD)
Dash (CCC: DASH-USD)
Zcash (CCC: ZEC-USD)
Bitcoin Gold (CCC: BTG-USD)
Bitcoin Cash (CCC: BCH-USD)
Bitcoin SV (CCC: BSV-USD)
EOS (CCC: EOS-USD)
VeChain (CCC: VET-USD)
Dai / MakerDao (CCC: DAI-USD)
While each has enormous potential, some are safer bets than others. As such, I have organized cryptocurrencies based on their overall risk-reward potential, from the most balanced to the least. With that in mind, let’s take a closer look at the wild world of cryptocurrency.
