Cryptocurrency has become a popular investment option in recent years, with many investors looking to capitalize on the potential of digital assets. But with so many different cryptocurrencies available, it can be difficult to know which one is the best crypto investment for 2021. To help you make an informed decision, we've put together a comprehensive guide to the top 10 cryptocurrencies by market capitalization. Adam Hayes, PhD, D., is an expert in behavioral economics and finance. He holds the CFA and FINRA Series 7 licenses, and earned his master's degree in economics from The New School for Social Research and his PhD, D., from the University of Wisconsin-Madison in Sociology.
Adam is currently researching and teaching economic sociology and social studies of finance at the Hebrew University of Jerusalem. At the top of our list is Ethereum (ETH), a decentralized software platform that allows users to create and execute smart contracts and decentralized applications (DApps) without any downtime, fraud, control or interference from third parties. The goal behind Ethereum is to create a decentralized set of financial products that can be freely accessed by anyone in the world, regardless of nationality, ethnicity or faith. This makes it particularly appealing to those in countries without state infrastructure or state identification, as they may have access to bank accounts, loans, insurance, or a variety of other financial products.
Cardano (ADA) is another crypto investment option worth considering. It is a “Ouroboros proof of stake” cryptocurrency created with a research-based approach by engineers, mathematicians and cryptography experts. The project was co-founded by Charles Hoskinson, one of the five initial founding members of Ethereum who left after having some disagreements with the direction Ethereum was taking. Polkadot (DOT) is a unique PoS cryptocurrency aimed at offering interoperability between other blockchains.
Its protocol is designed to connect permissioned and permissionless blockchains, as well as oracles to allow systems to work together under one roof. The main component of Polkadot is its relay chain, which allows the interoperability of different networks and also allows parachains or parallel blockchains with their own native tokens for specific use cases. Stellar (XLM) is an open blockchain network designed to provide business solutions by connecting financial institutions for the purpose of large transactions. These transactions usually take several days, involve several intermediaries, and cost a good amount of money; however, Stellar makes them almost instantaneous without intermediaries and at little or no cost to those who make the transaction.
Binance Coin (BNB) is another utility cryptocurrency that works as a payment method for the fees associated with trading on Binance Exchange. It is the third largest cryptocurrency by market capitalization and those who use it as a means of payment for the exchange can trade at a discount. Stablecoins are another type of cryptocurrency that offer low-risk investments with higher returns than higher-risk investments such as real estate. As with other stablecoins, BUSD offers traders and cryptocurrency users the ability to transact with other crypto assets while minimizing the risk of volatility.
Given its much higher price and market capitalization than any other crypto investment option, it's easy to see why Bitcoin is still the leader in this space. That said, it's important to take a diversified approach when investing in cryptocurrencies to minimize the risk of losing money; this means investing only what you're willing to lose and sticking to more conventional investments for long-term wealth creation. In order to get hold of a cryptocurrency, you will need a “wallet” - an online application to store your cryptocurrencies. Among the cryptocurrency exchanges on the market, Coinbase, Gemini and Webull are some of the best places to start investing in cryptocurrencies. When it comes to investing in cryptocurrencies or businesses, it's important to look out for substantial improvements that will make them more usable or accelerate their long-term adoption. As more institutions accept cryptocurrencies (or at least certain aspects of them), more people are likely to join the Bitcoin bandwagon this year. Cryptocurrency trading robots offer exceptional speed and efficiency when communicating directly with cryptocurrency exchanges and automatically placing orders based on their own pre-set conditions; however, they come with their own risks. As Henrik Andersson - Co-Founder and CIO of Apollo Capital - tells DMARGE: “Crypto asset prices are independent of stock market prices because they are a different set of investors”.
This means that even if stock markets crash, crypto asset prices may remain unaffected. It's also worth noting that even though some cryptocurrencies offer low-risk investments with higher returns than higher-risk investments such as real estate, experts recommend keeping your cryptocurrency investments at less than 5% of your portfolio. In conclusion, there are many different options when it comes to investing in cryptocurrencies in 2021; however, it's important to do your research before making any decisions so that you can make an informed decision about which crypto investment option is best for you.