TOPIC: The Best Cryptocurrencies of 2021
Back when Bitcoin was created in 2009 as a response to the financial crisis,
the world had gained a new asset class and its first digital currency. Several years later,
thousands of cryptocurrencies are in existence, all with different specialties and uses. The
cryptocurrency market has now reached US$1.3 trillion and is still growing.
In such a large market, how can an investor determine which digital currencies to invest in?
Today, we will look at a quick rundown of some of the most popular cryptocurrencies to date.
Here are five of the best cryptocurrencies of the year 2021:
At number one, is the start player of the crypto market, Bitcoin.
Bitcoin is undeniably the most significant player in the cryptocurrency field. Its sheer size is the
reason why retail and institutional investors start their crypto investments with Bitcoin.
It's often nicknamed "digital gold" because of the high value given by its network.
It can also be used for faster and more efficient fund transfers across borders.
Closely following Bitcoin is Ethereum.
As per Coinbase, Ethereum makes up for 18% of the cryptocurrency market, relatively small to the 47%
that Bitcoin commands. Ethereum also doubles as a crypto-application development platform
for users. It is currently the leader in using DeFi or decentralised finance, a system that
allows users to make smart contracts programmed to execute functions once certain conditions are met.
Next up is Cardano.
Similar to Ethereum, Cardano is a cryptocurrency that makes use of decentralised finance to conduct
peer-to-peer transactions. Cardano was designed to be way more energy efficient and uses a fraction
of Bitcoin and Ethereum's resources. This efficiency is thanks to the 'proof-of-stake
protocol that discourages high energy consumption and is gaining traction for security reasons.
Next up is the meme token Dogecoin.
A cryptocurrency named after the Shiba Inu meme that the internet has dubbed "Doge,"
Dogecoin was established as a lighthearted take on the cryptocurrency craze back in 2013. All
per Coinbase, it ranks eighth in terms of market cap. Dogecoin's prices remain less
than a dollar since it has an unlimited capacity to mine more coins. It is still speculative,
but its faster mining rate gives it a quantifiable advantage over other cryptocurrencies.
Next crypto on the list is Binance Coin
Binance Coin is similar to Bitcoin, for which there will only ever be a limited
number of coins in circulation. It has a limit of 200 million and is currently the fourth most
valuable cryptocurrency to date. It operates on a different models compared to most
currencies, though: it uses a fifth of its profits to "burn" a portion of its currency quarterly.
In conclusion, deciding on which cryptocurrency
to buy would depend on your risk tolerance and technical knowledge at the end of the day.