Which Cryptocurrency Is best To Invest In 2021

which cryptocurrency is best to invest in 2021

If you are interested in investing on how cryptocurrency then you might be thinking about which cryptocurrency is best to invest in 2021 or how to find the best cryptocurrency which will boom like Bitcoin. Well, the truth is there is a very small chance that any crypto will jump like BTC but of course, you can find crypto that will jump 10x at the end of this year. Assuming you already have some cryptocurrency in mind. We are gonna help you eliminate the bad ones from your list so that you can invest the whole money in the most promising one.

Invest in all promising Cryptocurrency?

Now, this might be a tempting idea to invest in all the cryptocurrency that you are interested in. Well, this is a bad idea. Now your first question is why? First of all, you might not have enough money to invest in all cryptocurrencies. Let’s say you have only $50 and you decided to invest in 5 cryptocurrencies. A few months later one goes 10x value another goes 3x and the others go to 0. Now after the result you see that you didn’t make much money and you wish that you had invested all your money in that 10x or 3x cryptocurrency. But that is easier said than done. How would you know which cryptocurrency would jump like that? Read the article to find out.

Another reason is why it’s better to invest in a few cryptocurrencies has to with fees. Especially exchange fees or transaction fees. Whenever you buy a cryptocurrency you pay a small fee. So the fee increases if you decided to invest in too many cryptocurrencies. Also, you might not be able to keep up with news, updates, and price fluctuation of all the cryptocurrencies you invested your money in. Remember crypto market moves fast and if you can not keep up with it it’s not worth investing here at all.

Alright, now that I have established that you shouldn’t invest in all cryptocurrencies let’s talk about how you will eliminate the bad ones and invest in the good cryptocurrency.

The cryptocurrency that has low social activity or follower

You may find a cryptocurrency that is best in every way. But if it doesn’t have a social following then it may not well be existing. You may think why it’s so important? It’s important more than you think. Just think about it if the cryptocurrency you are trying to invest in has no community engagement then who the hell is trading with that cryptocurrency.

The easiest way to find community is to follow their tweeter following and which list count on the coin market cap. For example, the top 100 altcoins will have Twitter followers and the CMC watch list count of more than 100 thousand. Cryptocurrency on top 200 will have a following of 10 to 50 thousand.

Take a very hard look at the cryptocurrency that you are gonna invest in. If your cryptocurrency doesn’t meet this requirement then it’s best not to go there. Also if you spot a cryptocurrency that has a higher ranking but compares to that low following then there is a very good chance that their crypto price is manipulated. After if there isn’t a big enough community then who is actually using that cryptocurrency.

Check the supply sources of cryptocurrency

If your crypto makes the first checkpoint then it’s time to see if it meet the supply sources and actual demand. There are two supply sources in cryptocurrency, inflation, and vesting. If we are being honest every cryptocurrency has some amount of inflation. Even if it has maximum supply since new coins or tokens are being created every day. Most cryptocurrency levels of inflation remain at 5 to 10 percent. Please understand that inflation is really not a problem if you are planning to hold that cryptocurrency few weeks or few months. But if you see your cryptocurrency has a high inflation number with the same vesting number then you might want to count it out.

The cryptocurrency that has strong demand drivers

There are multiple demand drivers on cryptocurrency. Two of them are a use case and institutional demand. In terms of use case BTC’s primary use case is to store its value. On the other hand, Eth’s primary use case is to pay for gas fees on the Etheruem Network. Even if the cryptocurrency you are trying to invest in has high inflation aggressive vesting it is very possible that the demand will overcome that supply shock. In another word, a cryptocurrency that has no demand is bound to fall. And if the cryptocurrency you are interested in has institutional demand then this is also a very good sign since institution these days uses a massive amount of cryptocurrency which help them grow a lot.

Check for growth potential

If we are being honest we know that most of the cryptocurrencies already found their success. BTC and ETH might go 2x or 3x at the end of 2021 but still if you are reading this article you are looking for a cryptocurrency that has a chance of go 10x. Start checking the market cap of the cryptocurrency that you are interested in. Normally the smaller the market cap the larger potential it has to grow.

However, the trade-off here is a risk. A smaller cap means it will very volatile and there is no guaranty that it will grow. Open the coin market or coingeko page for each of those cryptocurrencies and check to see what exchanges they are trading on. If they are trading good exchange and not binance or coinbase then there is a possibility that they will jump 10 times higher if they see community growth and development.

Deciding on which Crypto to invest in can be a very hard task. After all, there are dozens of promising cryptocurrencies out there and new ones come every day. In a perfect world, you would be invested in all of them but most of us don’t have that luxury. So do your research well and find the Crypto that suits you best.