Best Cryptocurrency to Invest in 2021 - Top Cryptocurrencies
What is the best cryptocurrency to buy right now? Bitcoin is the most obvious answer, but there are even more promising cryptocurrencies, such as BNB and LINK. The experts of the EMCD mining pool compiled a short list of the six best coins to invest in that you should include in your investment portfolio in 2021.
On April 14 2021, the price of Bitcoin reached $64,600. If you had bought BTC on January 1, you would have made 96% in profits. And yet, Bitcoin isn’t necessarily the cryptocurrency with the most potential for 2021. For instance, ether has already grown by over 300% in 2021, while BNB has appreciated by a factor of 16.5. After such a period of massive growth, you might be wondering if it still makes sense to buy expensive BTC and ETH – or if you should look for some new upcoming cryptocurrency that’s still cheap.
In order to show you which is the best cryptocurrency to invest in in May 2021, we divided the tokens and coins on our list in three groups:
- top cryptocurrency that you can mine, including with the EMCD pool;
- popular cryptocurrency that doesn’t allow mining (PoS coins or pre-minted tokens);
- undervalued cryptocurrency that can soon catch up with the general market rally.
Top cryptocurrency for mining and long-term investment: BTC and ETH
April 2021 was an extremely volatile month for Bitcoin, with a 33% difference between the monthly high and low. Even though BTC was down 2.9% by the end of the month, the long-term trend is still bullish. The recent drop from $64k to $47k is a temporary correction, mostly caused by the 30% decline in the Coinbase stock price after the IPO.
According to a recent expert survey, the recent growth is driven by institutional demand, which is likely to keep growing. Some analysts believe that Bitcoin can reach $100,000 in July (as seems to be predicted by the stock-flow model), while others even say that it will be worth $400k by 2025. So Bitcoin definitely has a place on the list of the best cryptocurrency to buy right now. Make sure to buy in on a dip, though.
As for Bitcoin mining, it can also earn you a profit in 2021, though the network hashrate and difficulty will likely keep growing. If you have access to cheap electricity costing no more that $0.07-0.08 per kilowatt-hour and you mine as part of a large pool, such as EMCD, you can extract a regular income out of your ASICs, as long as you only sell the revenue when the price is high.
Ether has an important advantage over Bitcoin: it isn’t just a form of electronic money and an investment asset but also the basis of a huge blockchain ecosystem. Among the top 20 largest cryptos by market cap, five are ERC-20 tokens issued on the Ethereum blockchain.
Activity in the Ethereum network has surged in 2021, helping ETH to outperform BTC by a factor of three. The total value locked in DeFi smart contracts has exceeded $65 billion, while Ethereum-based NFTs became one of the key trends of 2021. Under these conditions, it’s only a question of time when ether crosses the $4,500 mark.
ETH also retains a lot of growth potential in the mid-term and long-term period, mostly thanks to the extensive program of technical upgrades. After the successful Berlin hard fork on April 15, the price reached a new ATH of $2,544. The next step on the road towards Eth 2.0 is a much more ambitious hard fork called London, scheduled for July 2021. This could mean a huge new rally: the most optimistic analysts even say ether will reach $5,000.
Ether remains more profitable for mining than Bitcoin, since the payback period for GPUs is much shorter as for ASICs, as we noted in our article on the profitability of mining. To find out how much you can earn mining Ethereum, use the calculator on the EMCD pool website.
Two promising coins without mining: BNB and LINK
Binance Coin (BNB)
When Binance launched its native coin in July 2017, nobody thought that three and a half years later it would become the third most popular cryptocurrency in the world in terms of the market cap ($95 billion as of May 1, 2021). This year, the price of BNB skyrocketed from $38 to $630, and it shows no signs of stopping.
There are two key reasons behind this staggering growth spree:
- The success of Binance Smart Chain. Binance’s new blockchain, designed for DeFi, became the sensation of 2021 thanks to its speed and low transaction fees. Many of the leading DeFi protocols announced a migration to or integration with BSC, and the trade volumes on PancakeSwap at some point even exceeded those on Uniswap. Since all the fees on Binance Smart Chain are paid in BNB, the demand for the coin increases together with the number of transactions in the BSC network.
- Clever marketing. Almost all Binance instruments are built in such a way as to give BNB holders an advantage, and these advantages are widely publicized. For example, users get a 25% discount when paying trading fees in BNB, while Binance Card holders earn a cashback in accordance with how many BNB they deposit in the exchange wallet.
Chainlink plays an important role in the blockchain ecosystem, especially in DeFi. Its decentralized oracles allow smart contracts to obtain information from the outside world, such as centralized exchanges’ price feeds. DeFi protocols would have a hard time working without such a solution, because a centralized oracle represents a single point of failure: it can be hacked to manipulate the prices on a DeFi platform.
Chainlink products are used by such major players as Aave, Synthetix, Ampleforth, Haven, dY/dX, Nexus.Mutual, Opium.Exchange, etc. The price of LINK has already grown by 240% this year (from $11.5 to $38.8), but as DeFi turnovers increase (as they have been doing almost every month in the past year), LINK will remain the best cryptocurrency to invest in if you believe in the future of decentralized finance.
Two undervalued cryptocurrencies of 2021: DOT and LTC
DOT is the native coin of Polkadot, the leading blockchain interoperability project. Individual parachains built on Polkadot and Substrate can exchange information and assets. Ethereum doesn’t have this functionality, though its dApps can be connected to Polkadot using special bridges. Moreover, each financial transaction in Polkadot costs dozens of times less than in Ethereum (around $0.03).
All this favors the creation of a large Polkadot ecosystem: some have even called this project ‘Ethereum killer’. For instance, the largest crypto lending protocol Compound has already announced that it’s working on a Substrate-based blockchain called Gateway that will be integrated with Polkadot.
In spite of its great potential, DOT has been underperforming: in 2021, the price has grown by ‘only’ 300% from $9.3 to $36.2. This allows us to place this coin in the undervalued category. Keep in mind that DOT is more of a long-term investment: it’s been trading in a range since February after reaching an ATH of $42. But if you wish to know what crypto to buy for its fundamental potential rather than short-term speculative value, DOT is the answer.
You can successfully mine Litecoin with the EMCD pool, but we still placed LTC in the undervalued section because it has grown by only 110% in 2021. Though it’s one of the oldest coins in the market, in terms of market cap size it’s now trailing behind much younger cryptos, such as UNI (Uniswap).
One of Litecoin’s stronger points is that it’s a much better means of payment than Bitcoin: each transaction costs around $0.3 and takes just 5 seconds to process. Moreover, the project is now testing an upgrade called MimbleWimble, which will allow users to make private transactions.
Interestingly, Grayscale (one of the largest digital asset management firms) increases its investments in Litecoin with every dip. In February it bought 174,000 LTC, or 80% of all the Litecoins mined in the preceding month. Such a high level of institutional interest points to the coin’s long-term potential.
It’s not possible to provide a full list of the most promising cryptocurrencies in a single article. Instead, we selected those coins and tokens that can be used to build a diversified portfolio. There are many other cryptos deserving a place on the list, including COMP, EOS, AAVE, SOL, XTZ, etc. In the coming months, new high-potential coins can emerge – and we’ll make sure to tell you about them.