The best cryptocurrencies in 2021 aren’t just currencies; they’re also native assets for some of the financial world’s most promising startups and projects. Mark Cuban and Andreessen Horowitz are both big supporters of altcoins, especially contributions to the group (DeFi) investments, which were hot this year. In 2021, here are some of the best VC-backed cryptocurrencies to invest in.
1. Bitcoin (BTC)
Bitcoin, the king of all cryptocurrencies, was the first and best-known cryptocurrency on the market. It also has the largest market capitalization and is one of the most traded cryptocurrencies, giving investors with liquidity. When it comes to retail and institutional adoption, Bitcoin throne supreme. Most altcoins will follow Bitcoin’s price trend, so if Bitcoin suffers, altcoins will suffer as well.
Provided that the price of bitcoin is still below its all-time high of over $64,000, buying now may be a good long-term investment. So there will only ever be 21 million bitcoin in existence (with about 15% of that number lost), the price of the asset will rise as long as Bitcoin’s user base grows. Bitcoin currently has a 1.7 percent inflation rate, which halves every four years in a process known as bitcoin havening.
2. Ethereum (ETH)
Since its introduction in 2015, Ethereum has seen massive gains as the currency and platform that made smart contracts a part of the cryptocurrency market’s vocabulary. Ethereum has become one of the most widely discussed cryptocurrency projects in the world, trailing only Bitcoin in terms of market capitalization.
Microsoft, Intel, Chase, and J.P. Morgan are one of a number of companies working on business-ready versions of the Ethereum software. With the project’s momentum and market enthusiasm, there’s no reason to believe Ethereum has run its course, and investors should include Ethereum in their cryptocurrency portfolio. On Coinbase, Gemini, and Voyager, you can purchase Ethereum.
3. Polygon (MATIC)
Polygon is an Ethereum sidechain that is quickly scaling DeFi. The networks’ struggle to upgrade to Eth2 has been highlighted by Ethereum’s high gas fees. Layer 2 scaling solutions, which handle transactions on a side chain before submitting a batch of transactions to Ethereum’s layer 1 blockchain, have received support from Ethereum co-founder Vitalik Butlerin. Users pay significantly lower transaction fees as a result, and transactions can be completed in a matter of seconds.
Polygon is one of the first to implement Layer 2 sidechains, which are crucial for scaling Ethereum. Because assets must be bridged to the sidechain, there will be some switching costs, causing people to stick with Polygon in the long run. Polygon is a cryptocurrency that can be purchased on both Coinbase and Gemini.
4. Stellar Lumens (XLM)
In a number of ways, Stellar Lumens differs from many of its cryptocurrency competitors. Its goal is to become the go-to cryptocurrency for payments by leveraging cutting-edge technology that allows for quick and low-cost transactions.
The project’s goal is to make it possible for retail and institutional investors to send virtual version of any type of money. Users can send XLM using Stellar Lumens blockchain, but the network also allows users to send Bitcoin and fiat currencies anywhere in the world. Stellar is a cryptocurrency that can be purchased on Coinbase and Gemini.
5. Cardano (ADA)
Cardano is a big rival to Ethereum. Charles Hoskinson, a former co-founder of Ethereum, founded the project. The cryptocurrency is already proof-of-stake, a consensus algorithm to which Ethereum is still making the transition. Proof-of-Stake transactions are not only faster and cheaper, but they are also more environmentally friendly.
On the DeFi (decentralised finance) ecosystem, Ethereum outperforms Cardano. Smart contracts have yet to be released on Cardano’s platform, but the cryptocurrency expects to do so in 2021. Ethereum’s platform already has hundreds of decentralised applications and a much larger user base than Cardano’s. Cardano is a cryptocurrency that can be purchased on Coinbase and Gemini.
6. Chainlink (LINK)
The Chainlink distributed oracle network is powered by the Ethereum token Chainlink (LINK). This services enable Ethereum smart contracts to connect to external data sources, APIs, and payment systems in a secure way.
SmartContract.com was Chainlink’s first foray into the market in 2014. The name was changed to Chainlink shortly after its launch to better reflect the company’s core market.
In 2019, Chainlink formed a strategic partnership with Google. Chainlink’s protocol was included in Google’s smart contract strategy as a result of the agreement. Investors hailed this move as a major victory because it allows users to connect to Google’s two most popular cloud services. Chainlink is a cryptocurrency that can be purchased on Coinbase and Gemini.
Best Cryptocurrency Exchanges
Coinbase, Crypto.com, eToro, and Gemini are all excellent cryptocurrency exchanges for beginners. While Robinhood is a good option if you already use the platform for stocks, you won’t be able to send or receive crypto through the app, which limits what you can do with your money.
Coinbase is a good place to start if you’re new to cryptocurrency. The platform is arguably the safest way to buy cryptocurrency, and the user interface is straightforward and simple to understand. Furthermore, Coinbase offers a unique cryptocurrency conversion feature that allows you to freely switch between altcoins on its exchange. All six of the best cryptocurrencies on this list are also supported.