Last year Bitcoin was up 307% and Ethereum was up 440%.
This is a historic rise that can be explained as a consequence of the impact of the pandemic, the crisis that the restrictions imposed by the COVID19 brought about and the entry of institutional investors.
No wonder Bitcoin was born in 2009 as a response to the financial crisis (remember that on September 15 of the previous year Lehman Brothers went bankrupt). A protocol created by the mysterious Satoshi Nakamoto, as surprising as it was ahead of its time, exposed the weaknesses of fiat money and the role of financial intermediaries, whose credibility was already very much in question after big financial scandals were uncovered. Following the footseps of Bitcoin, new crypto-currencies burst onto scene, some of them — it must be said — technically superior… But as the saying goes, the early bird catches the worm, and so did BTC.
Later, thanks to the young genius Vitálik Buterin and his team, Ethereum was born, which broadened the horizons of the new blockchain technology much further with the creation of smart contracts. Its applications were almost unlimited: from deeds and logistics to data protection or polls in a safe, transparent and efficient way.
But we are not going to tackle the technical aspects here, we are simply going to make our prediction for 2021.
Crypto forecast for 2021
One thing is for sure: if the regulators had wanted to get rid of Bitcoin or Ethereum, they would have simply done it already. On the other hand, the underlying technology, i.e. the Blockchain technology, is going to be implemented in a host of applications, including, needless to say, cryptocurrencies and money transfers.
In 2021, unfortunately, the effects of the restrictions caused by the Covid19 will be harsh, specially for certain self-employed workers and some sectors such as tourism, hotels, catering, events, culture… We addressed such issue earlier on Financial Translator (see What impact will the coronavirus have on my job?)
In a low returns scenario, institutional investors have begun to buy the two most reliable cryptocurrencies so far: Bitcoin and Ethereum. They have also bought Litecoin and a few of the over 2677 cryptomonies that currently exist.
This has resulted in a dramatic rise in their prices: as of January 3, 2021, 1 Bitcoin is quoted at £28,101 (i.e. $34,101 or £24,940) and 1 Ethereum is quoted at $775,83 (i.e. $604 or £536).
No one has a crystal ball. Financial Translator does not know the future, but if we had to make an estimate, we would dare say that both Ethereum and Bitcoin will continue to rise in 2021, both because of the socio-economic situation and the strengthening of these two cryptocurrencies. As usual, we will see constant fluctuations, which are part and parcel of any volatile market. We also believe that Ethereum will continue to grow even more than Bitcoin as stakeholders become increasingly aware of all the applications ETH has to offer and the potential revolution smart contracts may bring about. However, Bitcoin has an ace up its sleeve: it is limited, just like gold. There is a limit to the bitcoins that can be mined, so chances are that, unless regulators ban cryptos, its price will skyrocket in the coming years. By the end of 2021, the value of both cryptocurrencies may have doubled or even tripled.
We would also strongly recommend not investing more than 5% of your income or assets in cryptos. Let’s call a spade a spade: It is a risky investment. But… Why not more than 5%? Because if everything is lost, nobody goes bankrupt, not even gets in a pickle, because of loosing 5% of their capital (10% might well cause you some troubles); but on the other hand, if it continues to rise, the investor can make a huge profit.
It would be fantastic to witness the appearance of a social crypto, as we discussed on Wrögl: the miracle of a local currency. But it is a different kettle of fish, or a currency of a different colour 🙂
Here are what I consider the 10 best cryptocurrencies in 2019 and most probably in the following years. I wrote earlier about Dash, Bitcoin, Ethereum, Litecoin, IOTA, Blockchain technology and how to buy cryptocurrencies on this blog. There are currently over 1400 cryptocurrencies, and sifting through them is not plain sailing, so this post will be regularly updated.
If you have reached this post, you may be wondering which is the best cryptocurrency to invest in, so I decided to offer a ranking for all those who are thinking of betting on the most fashionable currencies. First of all, I must say that I do not recommend investing more than 5% of your income, since the fluctuations in these markets are as usual as unexpected. My second advice is not to go crazy about the ups and downs and try to focus on the mid and long run. The crypto market is swings and roundabouts, so don’t panic. Keep calm and don’t invest more than 5% of your income. And finally, I would recommend to bet a little on the two big fishes (Bitcoin and Ethereum) and diversify the rest in other promising currencies. So you better don’t put all your eggs in one basket.
As I see it, there is an unwritten rule, a historical constant which proves over and over again that the most advanced technology always ends up winning out over the obselete one. Blockchain technology on which these cryptos are based is way more advanced and efficient than the old-fashioned fiat money, which could become obsolete in the next decade. Stranger things have happened.
Criteria applied in this ranking
Criteria: I personally attach great importance to the project offering some innovation, some added value —you can find out about it by reading the white paper—. However, the size of the cryptocurrency’s community, the money supply —so that you can weight up whether a given cryptocurrency is attractive for mining or not—, the team of developers behind and their dedication to the project —full or partial—, its country of origin, the exchanges in which it is quoted, whether it is little or very decentralized and, of course, its price-performance ratio so far…. are all good benchmarks when it comes to evaluate and compare them.
Cryptocurrencies by market capitalisation
By market capitalization, that is to say, by the price of the cryptocurrency multiplied by the number of coins in circulation, it is obvious that Bitcoin is still ahead of the curve, without any other coin shadowing it. Ether (Ethereum’s cryptocurrency) is back in the second position, and Ripple is third, Bitcoin Cash features in fourth position, Litecoin (5th), EOS (6th) and Binance coin (7th). In fact, the second largest group would comprise all the other altcoins except Bitcoin and Ether. Market capitalization also indicates the assets available for the purchase and active sale of cryptocurrencies in exchanges.
Bitcoin, with a market capitalization of around $142,520,106,909
Ethereum, with a market capitalization of around $26,643,966,096
XRP, with a market capitalization of around $17,649,693,244
Bitcoin Cash, with a market capitalization of around $7,071,407,437
Litecoin, with a market capitalization of around $6,569,571,432
EOS, with a market capitalization of around $6,285,351,420
Binance Coin, with a market capitalization of around $4,429,651,223
Bitcoin SV, with a market capitalization of around $4,127,066,751
Tether, with a market capitalization of around $3,127,671,181
Stellar, with a market capitalization of around $2,429,528,729
Starting with the most consolidated cryptos and ending with the not so famous but very promising ones (for a number of reasons):
#1 It is my favorite due to the technology Ethereum it is based on. For many —including myself — it is the most robust and innovative platform of the blockchain technology. It still seems to have a lot of room for growth. Within the crypto currencies it is one of the safest bets and the blockchain that offers the most applications with its smart contracts. Giants like Microsoft and JP Morgan are already using Ethereum technology. The most visible reference of Ethereum is Vitalik Buterin, its co-founder. Even though Ripple overtook it by the end of 2017 in terms of market capitalization, if both Ether and Bitcoin are the reference for all other currencies, it is for a reason. Not for nothing, you need ETH or BTC to buy other altcoins. You can buy Ether, Bitcoin or Litecoin on coinbase orBinance. Just click on the links.
#2 The early birtd catches the worm. It is the oldest and most widespread crytocurrency in the world. It was the first to use the revolutionary blockchain technology. For this very reason, its price is so high that you’d rather be cautious. It seems to be evolving towards a virtual gold value deposit, so people prefer to keep it rather than to use it to sell and buy goods and services. The fact that you need BTC to buy other altcoins in many exchanges, makes it even stronger. You can buy Ether, Bitcoin or Litecoin oncoinbase orBinance. Just click on the links.
Bitcoin cash (BCH)
#3One might say it’s an evolution of BTC. The fact that Bitcoin has a limit on the size of the block restricted to 1Mb, implies a high processing time in the transactions, so the fork of the cryptocurrency was created taking the 478558 as the last block of the bitcoin. The new coin would generate its own blocks from this string but with a much larger size (up to 8Mb). You can buy Bitcoin Cash oncoinbase orBinance. Just click on the links.
#4 It is becoming a modern classic. Last year it reached second position ahead of Ether in market capitalization for a few months. That was due to the agreement of several Japanese and South Korean banks to use it. Although some see it as a betrayal to the blockchain principles, it is designed to work within the current transactions bank system. They also convinced several companies to adopt its technology. It is a cryptocurrency based on free software that pursues the development of a credit system on a peer to peer basis. Ripple nodes make up a local exchange system, so that the whole system works as a decentralized mutual bank. How to buy ripple? You can do it oncoinbase orBinance. Just click on the links.
#5 It was the first crypto based on Scrypt, and it is a major bet on Coinbase, the first exchange house of the world. The size of its blocks and number of transactions is much larger compared to Bitcoin. Moreover, the fact that it does not need very sophisticated equipment to mine, favours its decentralisation. You can buy Ether, Bitcoin or Litecoin on coinbase or Binance. Just click on the links.
#6 Its white paper really blew my mind. A different coin. It is not based on Blockchain, but on DAG (Direct Acyclic Graph) technology; there are no commissions, no miners (you validate each transactions on your own), confirmation times are fast and the number of transactions that the system can handle simultaneously is unlimited. It is specially focused on the internet of things. Some say it is the next generation of decentralized currency. It is very surprising and different from what I have seen so far. In fact, I see it as a very interesting bet in the mid and long term. Iota was founded in 2015 by David Sønstebø, Sergey Ivancheglo, Dominik Schiener, and Dr. Sergei Popov. If you want to buy IOTA you can do it on Binance.
#7 Lo and behold! Here is a blockchain (Cardano) and a third-generation crypto (ADA) quite attractive investment. Its visible leader is Charles Hoskinson, former Ethereum CEO, who has assembled a team of renowned experts in the world of cryptocurrencies. Cardano is a decentralized platform that will allow programmable value transfers in a secure and scalable way —both horizontally and vertically—. Cardano is one of the first blockchains based on the Haskell high security programming language. Its currency is called ADA. Cardano aims to solve 3 problems: sclabilidad —how many transactions per second the platform can perform—, sustainability —which has to do with the resources and energy used for its operation— and interpolarity —which has to do with the compatibility between different chains of blocks.
While Bitcoin uses Proof of Work to create new blocks, Cardano resorts to Proof of Stake. You can buy ADA (the cardano crypto) on Binance.
#8 It is the open source crypto currency that offers the most protection and privacy, which is why it has often been linked to illicit operations. But as Sissela Bok put it: “While all deception requires secrecy, all secrecy is not meant to deceive”. Either way, it is one of those currencies that makes a difference with its added value. Created in April 2014, it focuses on privacy, decentralization, as well as scalability. Unlike many cryptocurrencies derived from Bitcoin, Monero is based on the CryptoNote protocol and — without going into technicalities — features an algorithm that makes blockchain obscuration possible. Monero benefits from continued support from its comm
#10 Here is a cryptocurrency of Chinese origin that incorporates a significant added value, which is the reason why it has attracted many investors. It advocates “transparency” and “good governance”. With the support of the Chinese government, it looks like it is going to be listed on coinone. Qtum’s proposal is to execute smart contracts on the blockchain in an easy, user friendly way. As Leonardo da Vinci put it, “simplicity is the ultimate sophistication”. The team behind published its technical whitepaper —which, by the way, not all cryptocurrency projects have done—, and is committed to creating a globally influential open source community by cooperating with other blockchain communities, third-party developers, as well as betting on technical innovations. You can purchase Quantums on Binance.
No ranking would be complete without mentioning some other cryptos that deserve to feature among the best ones due to its added value, the team behind or its novelty. So here they are!
Probably somewhat underestimated, it seems to have a great potential as a bargaining chip, since it has a simple interface and transactions are almost instantaneous. It is totally anonymous —transactions made with Dash are not recorded. Along with Monero, this is an interesting crypto for those looking for more privacy. You can buy Dash on Binance.
It is a Cryptocurrency of Slovenian origin. It is a different project in that it is the first to distribute dividends among the holders of its token, so you can earn in two ways: 1. having Iconomi and 2. with the periodic distribution of dividends (by the way, it is paid in Ethereums). It will probably work in a similar way as an investment fund does. For all that, it is a project that stands out from the crowd. You can buy Iconomis on Binance.
Based on the Ethereum blockchain, it offers full user control. It has been listed on the YoBit exchange house and integrated in Gifto (a protocol focused on virtual gifts). Last year it grew over 700%. You can buy Trons on Binance.
A new kid on the block…chain. Right now you can only buy it on coinmarketcap, though, as far as I am aware, there is also an imminent agreement with Yobit and some talks going on with Bittrex . It intends to be a decentralized exchange and expand to other sectors such as mobile games. Surprisingly enough, an Indonesian group bought a lot of OTX from the ICO (Initial Currency Offering). To be honest, this currency has me a little out of place. We’ll have to wait and see what direction the wind winds. Yes, the cryptocurrencies market is swings and roundabouts, but I’d recommend you keep an eye on Octanox It may cause quite a stir in the near future. You can buy Octanox on Binance.
A crypto currency that, as bold as brass, aims to change the Internet from its same structure, putting an end to the monopoly of data —and of our information— by big corporations. So far, Maidsafe has gone unnoticed. Its goal is very ambitious, maybe it wants to bite off more than it can chew. Anyway, just moving further in this direction, would be an awesome breakthrough.
They have reached an agreement with Microsoft and their initial offer drew a lot of attention and investment. At the moment, it seems that the evolution of its price is falling short of the expectations raised, but we’ll have to be on the ball sincedeep pockets are backing it. You can buy Lisk on Binance.
#9 Based on an innovative idea in the crypto environment, Pacalcoin is pioneering a new level of scalability adapted for adoption on a global scale. It was the first cryptocurrency to break the barrier of 100 transactions per second. Pay close attention to its amazing Safebox, an unparalleled tecnology that makes the blockchain way lighter. If you want to learn more about Pascalcoin, visit Pascalcoin, an awesome crypto with a bright future. You can buy Pascalcoin on Poloniex.
A Proof-of-Work (PoW) protocol is a measure to deter denial of service attacks and other service abuses such as spam on a network by requiring some work from the service requester, typically processing time by a computer.
Proof of Stake (PoS) means that a person can extract or validate block transactions based on how many coins they have, i.e., the more cryptocurrencies a miner has, the more power they have.
Marcel Solé · Financial translator, trainer and Blockchain enthusiast