Did you know that there are over 4,000 cryptocurrencies in existence, with an ever-expanding field of offerings?

Although bitcoin has been in the news quite a bit recently, it’s clearly not the only game in town. In fact, for many people “bitcoin” and “cryptocurrency” have come to mean one and the same thing, but cryptocurrency markets are awash in alternatives. However, it can be quite difficult to navigate your way through these crowded waters, much less decide on the best ones to invest in, which is why we’ve put together a list of the best cryptocurrencies to consider this year, from established names to emerging players, that are worth your attention.

Looking to invest in cryptocurrencies?

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Why you should invest in cryptocurrencies

Apple, Google, Tesla, Samsung, Facebook, PayPal, Deutsche Bank—these are just some of the big-name players that have made cryptocurrencies part of their long-term strategic plans recently. As we outlined in our previous post “The Future of Cryptocurrency,” cryptocurrency has transformed from being a niche digital asset to something that is experiencing widespread adoption for a variety of reasons across various segments of society.

No longer the exclusive domain of fintech disruptors and day traders, cryptocurrencies and the technology used to trade them, such as Trality’s state-of-the-art crypto trading tools, have gone mainstream. And with mainstream traders and institutions increasingly eyeing digital assets, there can be little doubt that cryptocurrencies have proven themselves to be both popular and successful.

A few benefits of crypto trading

So what are some of their benefits and why should you invest in them? Let’s start with a bit of hype. If you invested $1,000 in bitcoin in 2010, it would be worth roughly $287.5 million today. While we are not saying that crypto trading is or should be viewed as a get-rich scheme, we mention this statistic simply to illustrate the extraordinary opportunities that a cryptocurrency such as bitcoin presents for traders.

Closer to reality, crypto traders are drawn to the digital asset for a range of reasons: they can function as a store of value; they are a useful portfolio asset; and they can be used as a direct method of payment. Unlike gold, which has similar benefits, cryptocurrency is easier to store, easier to transfer and easier to trade. Basketball tickets, fast food, coffee, taxis and airline tickets can all be bought with cryptocurrency (just try buying your next espresso with gold).

Some additional points to keep in mind:

●     Low minimum investment barrier: Cryptocurrencies are divisible, which means that you can buy smaller fractions, allowing for a very low investment threshold. Consequently, the ability to trade is available to virtually everyone.

●     Liquidity: Cryptocurrency exchanges operate 24 hours a day, which means that you can buy, trade and sell your assets any time.

●     Transparency: The majority of crypto tractions are recorded using blockchain technology, which ensures reliability, transparency, records that are traceable and information that cannot be altered.

●     Diversity of assets: Traders can lower or mitigate risks by diversifying through the vast selection of different cryptocurrencies.

●     Fees: Compared with stock trading or other legacy asset classes, cryptocurrencies offer significantly lower fees.

And now the moment we’ve all been waiting for: drumroll please...

Best cryptocurrencies to invest in this year

Bulls, bears and even the odd wolf in sheep’s clothing. Crypto trading can be exhilarating, but it can also test your mettle. Here’s a rundown of some of the top cryptocurrency picks for the year ahead.

Bitcoin - Investor favorite cryptocurrency
Bitcoin - Investors' favorite cryptocurrency

Chainlink (LINK) is an Ethereum token that powers the Chainlink decentralized oracle network (DON), a leading on-chain provider that allows smart contracts on Ethereum to connect securely to external data sources, APIs and payment systems. At the start of 2021, Chainlink had an impressive bull rally, surging from an $11 low to an all-time high of $36.9. And that’s not all.

According their recent report “BITCOIN At the Tipping Point,” Citibank’s Citi GPS platform had high praise for Chainlink and its token, writing:

“Originally designed for the Ethereum platform, it is starting to be adopted by others such as Tezos and Polkadot. Chainlink was recognized by the World Economic Forum which named the startup in its 100 most promising Technology Pioneers of 2020.

Developers that utilize the Chainlink network pay with the protocol’s native token, LINK. Thus, a token that helps to facilitate the growth of the on-chain ecosystem may also gain prominence over Bitcoin in time as it becomes increasingly critical to the operation of the blockchain infrastructure.

It is thus already possible to envision a commerce-linked or infrastructure-linked coin that may eventually eclipse Bitcoin. More such possibilities may emerge. Innovation in the chain-based ecosystem is continuing apace and today’s offerings may yet give way to a new invention that garners more attention and assets than Bitcoin.”

We’d say that’s reason enough to keep an eye on Chainlink.

Uniswap ($UNI)

Uniswap is a leading decentralized crypto exchange that runs on the Ethereum blockchain. It employs a fairly new type of trading model called an automated liquidity protocol, which incentivizing people trading on the exchange to become liquidity providers. Coindesk has a helpful introduction to the exchange, describing it in the following way:

“Each token listed has its own pool that users can contribute to, and the prices for each token are worked out using a math algorithm run by a computer (explained in “How token price is determined,” below). With this system, a buyer or seller does not have to wait for an opposite party to appear to complete a trade. Instead, they can execute any trade instantly at a known price provided there’s enough liquidity in the particular pool to facilitate it.”

Introduced in September 2020, Uniswap’s UNI is a governance token that was distributed according to a set release schedule. 4000 UNI tokens were airdrop and offered to users who had previously used Uniswap’s services. For those interested in trading them, exchanges, such as Binance, Bitfinex, Coinbase Pro, Gemini, Huobi, Kucoin and, of course, Uniswap itself.

As of this writing, those free tokens are now worth an eye-watering $12,000, making UNI definitely one to watch in 2021.

Cardano ($ADA)

Launched in 2017 as a competitor to the Ethereum blockchain, the Cardano blockchain platform was designed by Input Output Hong Kong (IOHK), a decentralized company headed by Charles Hoskinson, co-founder of Ethereum. IOHK started in 2015 and builds blockchains and cryptocurrencies for businesses, educational institutions and governments.

First offered for sale in September 2015, ADA coins have experienced the same ups and downs of other cryptocurrencies, all the while achieving an all-time high in February 2021 of $1.49. As of March 2021, their market cap is in the region of $39bn, and there are approximately 31.2 billion ADA coins in circulation, with supply capped at 45 billion.

There’s been some buzz about the introduction of smart contract functionality on Cardano, which will offer developers the options to create and deploy their own decentralized applications (DApps). Cardano is also the first to be founded on peer-reviewed research, and their stated goal is” to redistribute power from unaccountable structures to the margins – to individuals – and be an enabling force for positive change and progress.”

Forecasting for ADA remains bullish, with many analysts expecting it to hit $2 by the end of the year. Some are even talking about a peak of $10 by year’s end. Stay tuned.

Tron ($TRX)

No, not that Tron (the 1982 film is fire, by the way). $TRON is a cryptocurrency that was founded by the TRON foundation and is currently one of the most hyped projects making headlines today. CEO Justin Sun was added to “Forbes 30 Under 30 in 2017.”

TRON aims to construct a costless, worldwide digital entertainment network that allows users to distribute and share content effortlessly and inexpensively. By removing the need for a mediator, TRON empowers anyone to put their content on its blockchain-built ecosystem, driving down the prices of distribution channels for publishers, while hinting at the possiblity of lower consumer fees when accessing that content. And $TRX is the token that powers the entire system.

According to their website, they have a number of heavy-weight core partners, including Poloniex, Samsung, BitTorrent, Swisscom Blockchain and Opera. Remarkably, TRON hosts more dApps than Ethereum, which has led many investors to speculate that TRON is going to be a lucrative investment choice in 2021. It remains to be seen if they can follow through on their stated mission to “decentralize the web” and transform stable and even sideways movement into upward movement in the year ahead.

Ripple ($XRP)

First released in 2012, Ripple is both a cryptocurrency and a digital payment network for financial transactions. As we wrote in our article “XRP price prediction for 2021-2025,” Ripple’s XRP coin remains one of the most undervalued crypto assets in the world.

XRP is a payment token that was created by Ripple Labs to be used on its decentralized payments system. While the company started off with a blockchain-based system, XRP is used with a network of validation nodes rather than a blockchain. The Ripple network can be used for more than just sending XRP, and, although the token is limited in supply, it isn't mined in the same way as Bitcoin or Ethereum, which many see as one of its advantages in terms of speed and cost.

Along with every other token on the market, $XRP lost considerable value during the crash at the beginning of 2020, but has risen in value and remains relevant as the fuel for Ripple, the open-source platform developed to facilitate quick and cheap transactions. A number of financial giants have even thrown their weight behind Ripple, including JP Morgan, HSBC and MoneyGram, among others. It remains to be seen, however, if the recent rift with MoneyGram over the SEC suit will prove detrimental to the asset’s value.

Many cryptocurrency traders feel that a global transition away from the traditional financial system to one using blockchain is imminent. Because Ripple offers to facilitate this transition on an institutional level, the token could be one of the best cryptocurrencies to invest in 2021. It is certainly one of the tokens on this list with the most potential. It has solid technology and a rapidly-expanding network, which opens new doors in international banking and payment networks.

Litecoin ($LTC)

Think of Litecoin as the Rodney Dangerfield of crypto - it can’t get no respect. Created in October 2011 by Charlie Lee, an ex-Google employee, it is formed from Bitcoin, with similar features and characteristics, but, crucially, is lighter and faster.

Litecoin is a peer-to-peer cryptocurrency and open-source software project released under the MIT/X11 license. From a technical standpoint, Litecoin is nearly identitcal to bitcoin, making it an early spinoff or altcoin of the popular cryptocurrency. And, just like its older brother bitcoin, the supply of Litecoin is capped at 84 million, with approximately 75% (or roughly 65 million) of it having been mined already.

Many argue that Litecoin is one of the most undervalued cryptocurrencies in the world, despite being around for a decade. Whereas Bitcoin is often referred to as the gold of the crypto world, Litecoin is seen as the silver. Recently, Litecoin surged by more than 630% from its lowest level in 2020, which has brought its total market cap to more than $12 billion, making it the 9th largest cryptocurrency in the world, with forecasters predicting that its value could move beyond $200.

However, it recently shed almost half of its gains without any rebound. But Litecoin enjoys widespread investor confidence and typically enjoys a solid value correlation with Bitcoin. . Despite the perception of it as “the lite version of bitcoin,” it has a lot to recommend itself. For a deeper dive, check out Trality’s Litecoin price prediction article.

Litecoin ($LTC)

After Bitcoin, there was Litecoin ($LTC) and because of that, this altcoin has many similarities to its older sibling. The network is way cheaper and easier to keep up, however, which means it’s also significantly less resource-intensive. Like Bitcoin, its supply is capped and there will only ever be 84 million Litecoins and as of November 2020 miners have mined approximately 65 million of those.

Litecoin touts great usability and speed being 4x faster than Bitcoin which makes sending and receiving payments as quick as sending a Whatsapp message. Litecoin has very low fees too and is in many cases cheaper than what a credit card company would charge.

The price as of November 2020 is $64 after rallying from a sluggish $46 in the overall Autumn crypto surge so it’s not the most bullish option but with a market cap of more than $3bn and big growth on the horizon, you should definitely consider adding this to your portfolio in 2021. If history is set to repeat itself in the next bull run then $LTC will perform well as in 2017, Litecoin showed an impressive performance and grew more than 8000%.

Despite the fact some see Litecoin as Bitcoin Lite and some kind of spinoff, it should not be completely dismissed as such. As we mentioned before, not only is the cryptocurrency a lot quicker than Bitcoin - it has also revealed some pretty interesting news throughout 2020.

The RPG ‘LiteBringer’ was launched which led to a massive wave of new transactions of $LTC. The Litecoin Foundation said that the launch of the game caused transactions to triple in less than a week and more than three-quarters of those were from the game. This movement was so encouraging to some investors that estimates for $LTC’s price in 2021 are as high as $600 according to CoinSwitch. Keep your eyes on Litecoin and have a good read through our dedicated Litecoin price prediction article.

Bitcoin Cash ($BCH)

Variously described as “a software upgrade,” “like a new version of Microsoft Word,” “Bcash,” and even “Btrash,” Bitcoin Cash is a cryptocurrency that is a fork of Bitcoin and was created in 2017. The intention behind the inception of Bitcoin Cash was to accommodate a larger block size when compared to Bitcoin, allowing more transactions into a single block. Despite the differences between the two, though, Bitcoin Cash and Bitcoin have a number of technical similarities, use the same consensus mechanism and have their supply capped at 21 million.

If you’ve got 37 minutes to spare, then check out the video “Bitcoin Cash: The Road To Mass Adoption” in which leading figures from the BCH ecosystem explain the reasons behind their optimism for 2021. Contributors such as Roger Ver, Josh Green, Shomari Prince, George Donnelly and Jonathan Toomin explain why they see Bitcoin Cash as the blockchain world’s answer to the most significant challenges facing the global financial system.Whether or not 2021 turns out to be a breakout year for BCH remains anyone’s guess. But a recent announcement by Japanese e-commerce Rakuten bodes well. The Japanese company has annual revenues of more than $13 billion and is one of the most popular e-commerce platforms in the country. Thousands of consumers across Japan will now be able to make purchases with cryptocurrency, including Bitcoin Cash.

Zcash ($ZEC)

Zcash is seen by some as zee privacy alternative to Bitcoin (couldn’t resist—all of us at Trality are based in German-speaking Vienna). In all seriousness, according to Zcash, it “offers confidentiality to protect your privacy and your financial history, and transactions can be confirmed quickly with low transaction fees,” seeing itself as “a fair and open currency that can be spent, sent and received via mobile phone, computer or digital wallet,” while offering “everyone equal access, regardless of social status or demographic.” All of this is made possible through zero-knowledge cryptography dubbed zk-SNARKs and is developed by the Electric Coin Company (ECC).

First mined in 2016, Zcash has capped its number at 21 million units (its circulating supply is about half this number) just like Bitcoin. At the end of 2020, they underwent their first halving as well as did away with their unpopular “Founders Reward,” but exchanges such as Bittrex have been moving to delist privacy coins such as Zcash, Monero (XMR) and Dash (DASH) in order to ensure compliance with know-your-customer (KYC) and anti-money laundering (AML) regulations.

Only time will tell if these sorts of concerns will impact privacy coins, but analysts have been talking about Zcash hitting $350 by the end of this year. If its price history is any indication, traders could be in for a bumpy ride, as Zcash can be volatile. But, then again, so are most cryptocurrencies.

Ethereum ($ETH)

While bitcoin might be the most popular cryptocurrency amongst investors, it’s not the most influential. That award goes to Ethereum and for good reason, as it allows anyone to build upon its blockchain. If Bitcoin harnessed blockchain for money and payments, Ethereum ‘s blockchain has a wider variety of applications, from its native token Ether (ETH) to smart contracts, among other things.

Founded in 2014, Ethereum is at the forefront of the DeFi (decentralized finance) revolution, which makes it possible to shift from traditional, centralized financial systems to peer-to-peer finance via decentralized technologies built on the Ethereum blockchain.

Ethereum, the second largest cryptocurrency in terms of market capitalization and volume, hit a record high recently, buoyed by growing institutional interest. By the end of September 2020, Ethereum’s market cap skyrocketed by 60% from $25 billion to $40 billion. At one point, one token was worth $483 before sliding down to $358. In the weeks after, Ethereum shocked investors when it reached $410 and continued to rally alongside bitcoin back in November. If this positive trend continues throughout 2021, then we will see a bullish $ETH.

With such great value for money, Ethereum is a smart investment option for those just getting started in the cryptocurrency market. The strength of the $ETH token correlates with the scale of the network, which means the token will only move from strength to strength as more dApps and projects are launched on the network.

In the coming months, the rise in popularity of DeFi products alongside a successful deployment of the Ethereum 2.0 network upgrade bode exceptionally well for Ethereum’s price. In fact, we wrote an entire article on Ethereum in which we dig a bit deeper, analyzing its past performance, current pricing and future forecasting.

Bitcoin (BTC)

Love it or hate it, but you can’t deny its enviable staying power, market dominance and continued importance to the cryptocurrency ecosystem. These are just a few of the reasons why flagship bitcoin is referred to as “the King of Crypto.”

Bitcoin - Investors' favorite cryptocurrency

Developed in 2011 by the pseudonymous Satoshi Nakamoto, Bitcoin’s reputation  precedes itself. No self-respecting cryptocurrency ranking would be complete without mentioning it, especially since it holds about 65% of the market cap.

With its popularity, though, comes a lot of hype. In February 2021, bitcoin prices were achieving record highs, with a single bitcoin valued in excess of $50,000. Anthony Scaramucci, founder of SkyBridge Capital and recent crypto convert, is even predicting that bitcoin will hit $100,000 by the end of the year. Whether its value continues to charge ahead or levels off (or even dips), there can be no doubt that bitcoin will likely continue to command the cryptocurrency market. As it does, traders will consistently benefit from high liquidity regardless of the health of the market. And while bitcoin is volatile, it demonstrates consistent growth.

Ready to invest in cryptocurrencies?

So now that you’ve got some valuable insight into which cryptocurrencies are worth considering this year, you might have a few practical questions related to testing the cryptocurrency waters. Following are four main steps to help you get started:

  • Registering with a crypto exchange
  • Picking a crypto wallet
  • Research, research, research
  • Automate your trading with Trality’s state-of-the-art tools

In the following sections, we’ll cover the basics to get you started quickly and easily.

Step 1: Choose a crypto exchange

In order to trade any cryptocurrency, you need to choose a crypto exchange. As with cryptocurrencies themselves, however, there are plenty of options, and deciding on one in particular can be a bit of a difficult task, which is why we’ve written an in-depth article covering the best ones.

In our rundown, we cover a wide range of exchanges, including Binance, Kraken, Coinbase, Bitpanda, BitMEX, CEX.IO and Luno as well as offer tips about key things to consider when making your decision (e.g. reputation, fees, payment options, KYC verification and geoblocking).

Step 2: Picking a crypto wallet

Just like fiat currency, you need a wallet for cryptocurrency (in this case a digital one). But unlike traditional wallets, crypto wallets don’t actually store your cryptocurrency, but rather your public and private keys. In this respect, a crypto wallet is more like a bank account in which you keep track of your transactions.

Now the private key is a randomly generated string of numbers and letters, which allows you to send cryptocurrency to someone else. Without it, you can’t approve transactions. Be sure to store this key in a very safe place, otherwise you could share the same fate as a handful of Bitcoin millionaires who can’t access their money.

Your public key, on the other hand, is (as its name implies) is derived from the private key through a hash and everyone else can see it. Others can send cryptocurrencies to your wallet via your public key.

As with crypto exchanges, there are various types of crypto wallets (e.g. desktop, online, mobile and hardware), which means that you’ll have to consider the one that best serves your needs (e.g. cost, security, mobility, user-friendliness, etc.). Check our Investopedia’s helpful article “Best Bitcoin Wallets,” for example, to familiarize yourself with some of the industry’s best.

Step 3. Research, research, research

Remember what we wrote in this article about each cryptocurrency? Take it all with a grain of salt. One of the best measures of your future success as a trader is the extent to which you are an informed trader. Read widely. Understand concepts and ideas. Compare and contrast articles, websites and points of view.

Knowledge is power— it might seem like a cliché at this point, but it is the one thing that will ensure years of purposeful and profitable trading.

Step 4. Automate your trading with Trality’s state-of-the-art tools

Unlike traditional stock markets, cryptocurrency trading never stops, making it virtually impossible for private traders to track market fluctuations, diversify risk, reduce error and ensure trading discipline 24 hours a day, 7 days a week, 365 days a year. Luckily, private traders can take advantage of advanced tools such as Trality’s Rule Builder or Code Editor to automate their trading with the help of trading bots. Wall Street has been utilizing them for decades, but now platforms such as Trality are bringing this tech to Main Street so that everyone can benefit from it. In fact, we’ve covered the subject from all angles in our comprehensive article “Crypto trading bots: The ultimate beginner's guide.”

By communicating directly with crypto exchanges and placing orders automatically based on your own preset conditions, crypto trading bots offer exceptional speed and efficiency, fewer errors and emotionless trading. In order to trade on an exchange, all you need to do is authorize your trading bot to trade on your behalf via API keys (Application Program Interface), and access can be granted or withdrawn at any time.

Trality’s crypto trading bots

Did you know that 80% of private traders lose money due to the lack of automation. Choose instead to be among the 20% of smart investors who make money.

Crypto bots offer a non-emotional and systematic approach to trading. Think of them as a roadmap or a GPS, ensuring that you get to your investment endpoint or destination as safely and efficiently as possible. Trading detours based on fear or adrenaline can be costly, often leading to financial setbacks and losses. The point is not to overcome the human element, but to complement it by harnessing the power and potential of artificial intelligence and automation, and at Trality we empower traders with world-beating technology.

Trality Rule Builder (Beginner friendly)

Create your own trading bot without writing a single line of code. The Rule Builder is a drag-and-drop interface that allows traders to easily create and backtest trading bots without writing any code. It’s very easy to use, comes with pre-defined trading strategies and takes just one click of the button to start live trading.

Trality Rule Builder Walkthrough

Video tutorial: How to use the Rule Builder on Trality

Some key features at a glance:

  • Build upon curated, pre-defined trading strategies.
  • Select from over 100 technical indicators.
  • Use Boolean logic to arrange strategy parts.
  • Backtest your strategy with historical data.

Want to know more? Check out our extensive coverage in our article “Building a Simple Trading Bot with the Trality Rule Builder (no code!).”

Try the Rule Builder for free!

Trality Code Editor (for Python coders)

Trality Code Editor is the world’s first browser-based Python Bot Code Editor, which comes with a state-of-the-art Python API, end-to-end encryption and more. If you are looking to build a profitable trading algorithm in Python, then our Code Editor is likely your best bet.

Trality Code Editor Walkthrough

Video tutorial: How to use the Code Editor on Trality

Some key features at a glance:

  • Edit in the browser with intelligent auto-complete.
  • Backtest directly in the browser.
  • Benefit from clear versioning and your backtest history.
  • Use in-browser debugging.

If you want to learn more about our awesome Code Editor check out this article “How to build your own Python trading bot.”

Try the Code Editor for free!

Test drive Trality for free

That’s right: no fees, no catches and absolutely no obligation.

If you decide that Trality is right for you (and we’re confident that you will), then you can continue to benefit from our crypto trading bot tools and even upgrade your account.

Pricing

Trality offers 4 different packages differentiated by trading volume, number of bots, tick interval and log retention.

  • The Pawn plan is free and comes with 1 live bot, 1 virtual bot and a monthly volume limit of 5.000€.
  • The Knight plan is 9.99€ and comes with a monthly trading volume limit of 25.000€. Users can run 2 live bots and 2 virtual bots with this plan.
  • The Rook plan costs 39.99€ and it’s the next upgrade if monthly trading volume exceeds 25.000€ or if you want to run more than 2 live bots and/or 2 virtual bots. This plan comes with a monthly trading volume limit of 250.000€ and it's meant for those who are actively trading crypto.
  • The Queen plan is 59.99€ and comes with unlimited monthly trading volume.

All Trality plans come with a 20% discount for yearly subscriptions. Check the Trality pricing page for more details.

Create, code, build, backtest and trade with trading bots like a professional with Trality’s state-of-the-art technology today.

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Disclaimer: The above article is merely an opinion piece and does not represent any kind of trading advice or suggestions on how to invest, how to trade or in which assets to invest in! Always do your own research before investing and always (!) only invest what you can afford to lose!

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