5 of the fastest-growing cryptocurrencies to watch in 2021
It has been a banner year for cryptocurrency and digital assets, with a number of momentous industry events and record-breaking runs serving to help define the future of the space. From the halvings of bitcoin and Zcash in 2020, to the increased interest in digital assets amongst mainstream investors, we are seeing firsthand the continued evolution of crypto from former niche trend to legitimate investment vehicle.
And with that, we are also seeing an unprecedented number of newcomers making their way into the space – a task that can bring with it a considerable learning curve. Many novice members to the digital asset space find themselves asking, “Which is the best cryptocurrency to invest in?”
A common approach is to invest in not just one, but several forms of cryptocurrency, as diversifying within the crypto space is just as important as it is in a traditional portfolio. And when you are choosing which cryptocurrencies to invest in, you should start with those with the brightest future.
Here are five of the fastest-growing cryptocurrencies for you to consider adding to your portfolio in 2021 and beyond.
Please note that this post does not explicitly endorse or recommend any particular strategy or form of cryptocurrency. For specific investment advice, please contact your financial advisor.
Bitcoin (BTC): The grandaddy of them all
Market cap rank: 1st
Bitcoin is and always has been the poster child of the crypto space. It was the first cryptocurrency to come into existence and has remained the most popular in the decade-plus since.
Today, it is still a great choice for both new and seasoned investors and has seen record-breaking performance over the past several months. Its market capitalization surpassed $1 trillion in January of 2021, meaning bitcoin at the time accounted for more than 69% of the entire crypto market.
Because it is the most popular, it is also the most widely adopted and accepted in the mainstream, with many merchants and vendors taking steps to begin accepting bitcoin as a method of payment.
Crypto in all forms has begun to serve as a popular form of diversification and hedge against the risks of traditional markets, especially in times of economic uncertainty. With bitcoin being the face of virtual currencies, it has understandably led that charge and will certainly continue to do so.
Ethereum (ETH): The programmable powerhouse
Market cap rank: 2nd
As bitcoin experienced record highs in 2020, Ethereum was right there with it. Founded with the goal of decentralizing the entire internet – not just currency – Ethereum stands apart from bitcoin in its network’s ability to do much more than just transfer ether (the virtual coin that powers the network).
The Ethereum network is fully programmable, meaning developers can use it to serve as a marketplace for many different things – most notably, decentralized applications (DApps).
The Ethereum network also supports other crypto platforms such as Uniswap, Maker, and Aave, all of which are active in the world of Decentralized Finance (DeFi). DeFi is considered one of the fastest-growing crypto trends out there, aiming to make things like insurance, loans, and savings programs independent from banks.
There is widespread confidence in the future of Ethereum and its ability to provide users with more control over their finances and online data.
Cardano (ADA): Proof-of-stake for visionaries
Market cap rank: 4th
Cardano is described by many as a rival to Ethereum, and is described by itself as a “blockchain platform for changemakers, innovators, and visionaries” with an overarching goal of bringing about positive global change.
Cardano is a proof-of-stake (PoS) cryptocurrency, which may also contribute to the potential rivalry with Ethereum, as the Ethereum 2.0 upgrade signaled a shift of that platform toward a proof-of-stake format. The key value prop of Cardano is in developing native smart contracts using PoS protocol.
Cardano was the first crypto to be founded on peer-reviewed research and to be developed through evidence-based methods, having recently released a protocol update that introduced native tokens and multi-asset support. The update allows users to create non-fungible tokens (NFTs) as a way to prove the ownership and authenticity of everything from digital art to social media posts.
The price of Cardano has soared in recent weeks and is now up more than 2,400% in the last year, making its way to a market cap of nearly $40 billion.
Chainlink (LINK): The eventual heir to bitcoin?
Market cap rank: 10th
Chainlink was founded in 2014 by SmartContract.com in the hopes of creating a bridge between external data sources and public blockchains. In the years since, the Chainlink network has grown significantly and was recently recognized by the World Economic Forum as one of the 100 most promising Technology Pioneers of 2020.
As its parent company name would suggest, Chainlink is focused on expanding the capability of smart contracts by enabling access to real-world data, events, payments, and more, without sacrificing any of the security or reliability blockchain has become known for.
In a recent report by Citi Group, it was forecasted that Chainlink may eventually gain prominence over bitcoin. Developers that use the Chainlink network pay using the protocol’s native token, LINK, which helps facilitate the growth of the on-chain ecosystem. As it becomes more critical to the larger blockchain infrastructure over time, it’s not out of the question to some experts for LINK to gain prominence over bitcoin.
Chainlink has seen a price boom of its own of late, having increased by nearly 600% in the last year.
Polkadot (DOT): Uniting independent blockchains
Market cap rank: 6th
The rapidly growing Polkadot has already seen its price jump by more than 360% since we flipped the calendar to 2021.
The startup blockchain is also considered a potential rival to ETH, despite being created by Ethereum co-founder Gavin Wood. The two platforms do share a common goal: to empower developers to build and share their own DApps. Where DOT differs is in giving developers the ability to create apps that can communicate with other ledgers through a relay chain.
Polkadot also features the concept of parachains – blockchains that can run a higher transaction throughput than Ethereum due to a more sophisticated design.
DOT’s surge has been so impressive that last fall, investors were looking at it to potentially become the next Ethereum as DeFi continues to grow. In the past year, prices have skyrocketed by more than 1,300% to make it the sixth-largest crypto in the world in terms of market cap.
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