With so many options on the market, how are you choosing the best possible cryptocurrency to invest in 2020? And what about moving into 2021?
There is no one size fits all answer in the world of cryptocurrencies, as each trader is coming at it with different expectations and levels of experience. The opportunity that cryptocurrencies offer is intriguing nonetheless, and if it’s in line with your investment goals, diving into the world of crypto can help you achieve your goals.
We have seen the market take a hit in 2020 so now more than ever, you should be looking into alternative currencies that don’t rely on the centralized market.
Trading cryptocurrency can seem confusing at first, so read on for a comprehensive guide and for the top cryptocurrencies to invest in 2020 and beyond.
- Cryptocurrency market value and the future potential >
- What are the 10 best cryptocurrencies that worth to focus? >
- 5 Types of investment in cryptocurrencies >
- Choosing a licensed broker >
- Bitcoin/Ethereum/Ripple investment historic performance and price prediction >
- Should I invest in cryptocurrencies? >
Market capitalization in the cryptocurrency world is calculated by multiplying the price of virtual currencies by the total number of coins in the market. Watching this measure will give you an idea of how much money is flowing in and out of the cryptocurrency market.
Up until 2016 the market cap never exceeded 18 billion USD, whereas in 2019 the cumulative market capitalization of all cryptocurrencies was 237.1 billion USD. Global trends tell us that in 2020 we will see that number continue to grow.
Because of a lack of central authority who rules on the price of cryptocurrencies, they can be volatile. This provides an opportunity for potential return on your investments, but can also be high risk for traders who have less experience.
Despite this volatility, public acceptance of cryptocurrencies as a real form of payment has increased over the years since its creation in 2009.
Big companies like PayPal, Mastercard, and Visa have announced ventures into cryptocurrency, and may start offering sales to their users in the future. This is a big step for the legitimacy of Bitcoin and other cryptocurrencies, as it would make it more user friendly while also pushing for wider regulations (both essential for mass adoption).
With these big companies venturing into cryptocurrency, the scalability could also increase exponentially. At the moment, blockchain can accommodate about 2700 transactions per block (a new block every 10 minutes), while Visa can process 2000 transactions per second.
Let’s take a look at the top cryptocurrencies to invest in 2020 and 2021, as we move towards mass adoption of this decentralized market.
1. Bitcoin (BTC)
Market capitalization: USD$336 billion
24h trading volume: USD$42.58billion
Highest Price: USD$19783
Year of birth: 2009
Creator: Satoshi Nakamoto
Any list of cryptocurrencies to invest in 2020 of course has to begin with Bitcoin, the first of its kind. Created in 2009 by a mysterious Japanese programmer named “Satoshi Nakamoto”, it was popularized as an alternative, virtual currency.
Bitcoin is the most famous cryptocurrency that paved the way for other altcoin projects that exist now. In addition, Bitcoin is also the most liquid in the cryptocurrency field. If you are a beginner, Bitcoin is the best cryptocurrency you should invest in.
Bitcoin still remains the largest cryptocurrency by market cap, in terms of value, and a key influencer in mass adoption of cryptocurrencies. So, should you invest in Bitcoin in 2020?
+ Highest liquidity and trading volume in the market
+ Accepted by all crypto exchanges
+ Can be used as a loan to earn additional income
+ The potential is very high
+ Can serve to store value
+ The supply is limited so you don’t need to worry about inflation
− The price is high: it’s difficult to make a long term investment if you do not have ample capital
− Strong volatility and sensitivity to major events
Please note that although Bitcoin has great volatility, it is also considered one of the most stable cryptocurrencies. Bitcoin's influence, demand, and mass adoption are expected to increase in the next few years. Have you considered trading bitcoin?
On the Mitrade platform, you can use risk management tools, economic calendars, sentiment indicators, etc. to help you trade more effectively.
2. Ethereum (ETH)
Market capitalization: USD$40.6 billion
24h trading volume: USD$15.96billion
Highest Price: USD$1432
Lowest price: USD$0.42
Year of birth: 2015
Creator: Vitalik Buterin
With the second-highest liquidity on the market after Bitcoin, Ethereum is a solid choice for traders looking to invest in a rewarding coin. Ethereum allows application developers to build decentralized financial apps on their blockchain (DApps).
By paving the way for the smart contract platform trend, Ethereum has solidified its place in the market as a trailblazer and an incredibly useful cryptocurrency.
You’ll have no issues buying or selling Ethereum as it will likely remain a valuable cryptocurrency among corporations for the foreseeable future. Consider ETH as one of the top cryptocurrencies to be focused.
+ Price is moderate: you can choose both good long term and short term investment with ETH
+ Ethereum's blockchain technology allows thousands of projects to grow, and several major corporations including Microsoft, Intel, Chase and JP Morgan are building versions of the software that control Ethereum
+ With ETH 2.0 coming soon and moving to a PoS model will make investments in ETH in the long run more profitable, which increases the storage value for ETH
+ Is a very accessible investment for those starting out
− High volatility
− Level of awareness is lower than as Bitcoin
3. Litecoin (LTC)
Market capitalization: USD$2.7 billion
24h trading volume: USD$4.89 billion
Highest Price: USD$255.42
Lowest price: USD$22.86
Year of birth: 2011
Creator: Charlie Lee
Litecoin ranks as one of the coins with the lowest amount of time for mining, while also giving a high block reward of 25 LTC. This, in combination with its high liquidity and large market cap, make it one of the top cryptocurrencies to watch in 2020 and 2021.
Litecoin has a limit of 84 million coins, with a similar technical foundation to Bitcoin, the “digital gold” of cryptocurrency. LTC has been lovingly termed “digital silver” by the cryptocurrency community.
+ Litecoin is one of the fastest and most affordable cryptocurrencies when it comes to payments
+ Litecoin offers great potential at a much more affordable price
+ The overall price is less volatile compared to other cryptocurrencies in the market
+ Litecoin was recently confirmed to be integrated into conventional ATMs in Korea through a partnership with MeconCash
− Credibility dropped as Charlie Lee sold off his LTC stake in December of last year on a “conflict of interest”
− As a divergent of Bitcoin, Litecoin has very little creativity and new ideas
4. Ripple (XRP)
Market capitalization: USD$13.15 billion
24h trading volume: USD$4.05 billion
Highest Price: USD$3.84
Lowest price: USD$0.28
Year of birth: 2012
Creator: Chris Larsen
This cryptocurrency differs from the others in its intention and is mainly geared for use by larger institutions and banks. It’s venture-backed and used by banks to transfer money across national borders. XRP is thus a platform for transfers while also a useful transit currency.
This isn’t to say laymen traders shouldn’t invest in XRP, as its high market cap and practical value makes it a powerful contender for potential rewards this year and into 2021. Do you think Ripple is right for you?
+ Ripple is being used in the real world by organizations like money transfer giant MoneyGram, European money transfer service Azimo, and Union
+ The supply is limited, so inflation is unlikely
+ Ability to convert to any currency or value (like gold) with a uniform minimum commission
− Highly centralized, contrary to the fundamental value of cryptocurrencies in general
− Exclusivity with 61% of all coins owned by Ripple Labs
− Being open-source means there’s a potential to get hacked
5. Bitcoin Cash (BCH)
Market capitalization: USD$4.58 billion
24h trading volume: USD$2.22billion
Highest Price: USD$3719
Lowest price: USD$68
Year of birth: 2017
Creator: Roger Ver
Bitcoin Cash was fabricated as a fork off of Bitcoin in order to address weaknesses in the king of cryptocurrencies. The aim is to optimize the network in order to be more useful for everyday transactions, making it a coin with potential practical value.
The main areas that BCH addressed were: transaction speed, scalability, and block size. Did they succeed in making a difference? Consider these points before trading BCH:
+ Maximum block size limit is 8 MB, ensuring transactions are validated and processed much faster
+ The overall scalability of the network increases and the fees of transactions decrease
+ Safe against re-issuance and wipe-out as there are many factions in the BCH community
− Bitcoin Cash usage is low - mainstream adoption is still out of reach
6. EOS (EOS)
Market capitalization: USD$2.5 billion
24h trading volume: USD$2 billion
Year of birth: 2018
Creator: A private company block.one
+ Uses smart contracts like Ethereum
+ Transactions on the EOS network are free
+ EOS ended its year-long ICO in May of this year, raking in a total of $ 4 billion
+ A longer ICO has been done in an attempt to create an orderly market for EOS
+ YTD performance for EOS was unchanged, with less volatility compared to some competitors
− The EOS network is more centralized than Ethereum and a few other cryptocurrencies when it comes to stakeholder voting
7. NEO (NEO)
Market capitalization: USD$1.1 billion
24h trading volume: USD$415.7 million
Price: USD$15.98 / NEO
Year of birth: 2014
Creators: Da HongFei and Erik Zhang, previously called Antshares
+ Owning NEO generates an asset called GAS, which can be sold on exchanges, or used to fuel transactions
+ Can process 10,000 transactions per second - fast processing means it’s well-liked and popular in China
− Network consensus is achieved by a very small number of Bookkeeping nodes, as low as seven in the whole world
− Consensus of NEO may be overturned easily by attacking those nodes
− Lacks in popularity among western audiences as its roots belong to China
8. Tether (USDT)
Market Cap: USD$18 billion
24h trading volume: USD$46.5 billion
Price: USD$1 / USDT
Year of birth: 2015
Father: Brock Pierce and Craig Sellars are members of the CTO of the Mastercoin Foundation
+ A stable coin tied to the US dollar
+ Reduced risk and speedier transactions
+ Less volatile like other virtual currencies
− Tether is a centralized virtual currency and is operated by Tether Limited in the Virgin Islands, UK
9. Binance Coin (BNB)
Market capitalization: USD$4.1 billion
24h trading volume: USD$287.7 million
Price: USD$28.38 / BNB
Year of birth: 2017
Father: Changpeng Zhao, a Chinese-Canadian business director
+ Binance Coin token allows users to efficiently trade dozens of different cryptocurrencies on the Binance platform
+ BNB is used to facilitate transaction fees on exchanges and can also pay for certain goods and services, including travel fees, and more
− Since BNB developers plan to buy back a certain amount of money, its value will likely decrease, leading to a price crash
− The impact of Chinese regulatory policies because of its headquarters in Shanghai, China
10. Monero (XMR)
Market Cap: USD$2.1 billion
24h trading volume: USD$1.2 billion
Price: USD$119.49 / XMR
Year of birth: 2014
Father: Nicolas van Saberhagen
+ Monero mining algorithm has a productivity design that can be easily mined on regular computers
+ Complete security: uses 3 different technologies to hide the sender, the receiver, as well as the amount transferred
+ There are similar projects (ZCash & PIVX) that are also accepted by the public (top 20 and top 40 by market cap), showing that security is really an issue that the market is concerned about
− There is no standard voting system for project changes: Hints for the network are posted on forums, but the Monero developers will decide for themselves
− The official forum is not active
Now that you have an idea of the best cryptocurrencies to invest in 2020, it’s time to decide how you will invest.
We’ve outlined five rewarding ways to invest your money in the cryptocurrency market in 2020 and 2021.
1 Trading Contract for Difference (CFD)
No need for high capital
Go long or Go short
No need to own and hold cryptocurrency
If leverage is used, the risk is higher
Contract for difference trading allows you to make trades without buying or holding cryptocurrency, as you buy and sell CFD units. This is a popular type of derivative trading, suitable for those who want to trade short-term with low capital.
If using leverage in your position, know that the higher risk can result in higher rewards - The leverage amplifies your potential profits, as well as your potential losses.
If you expect BTC price may rise ↗, so you buy BTC, If you expect BTC price may fall ↘, so you sell. If the market price meets your expectation, you will make a profit.
( Price does not present the current situation, for more details, please refer to the product info on Mitrade platform.)
2 Buy, Hold, and Sell Cryptocurrencies
Easy to start
Need a lot of initial investment
There are two schools of thought regarding buying and holding cryptocurrencies: the long game and the short-term traders.
Buyers who hold cryptocurrency for a long time believe that despite the volatility of the market, overall there will be a market increase over time. These traders don’t let fear or uncertainty sway them into panic-buying or -selling.
Short-term trades have a quick turnover due to the nature of the market, one that rises and falls as quickly as the popularity of a meme.
Buying and holding cryptocurrency requires more capital and a sense of confidence despite the difficulty of conducting market research - cryptocurrency can be a fickle mistress!
Hard to start
Need a lot of initial investment
To mine cryptocurrency, you will need to begin with a fair amount of capital and electricity. The mining system is what makes the blockchain possible, which allows cryptocurrencies to exist and be traded. There are a lot of costs associated with mining, but you will be rewarded with coins for your efforts.
4 Cryptocurrency Faucets
This type of investment doesn’t bear much fruit, but maybe enough to get you off the ground. Cryptocurrency faucets allow you to get free coins for doing small tasks, such as watching a video clip or rating products. You can find faucets for most types of cryptocurrencies.
5 Get paid in cryptocurrency
If you’re lucky enough to find a job that will pay in cryptocurrency, then you can be compensated for your services. Some companies pay in major cryptocurrencies, like bitcoin, for writing crypto articles, or other related jobs.
When delving into the volatile market of cryptocurrencies, you should choose a platform that is reputable and holds a legitimate license. Adding a level of confidence to your trading, licensed brokers offer a platform to trade with confidence.
The cryptocurrency market is blossoming, which means that the brokerage business is as well. Beware of illegitimate platforms that have been put together to make a quick buck.
Always check for valid, reputable licenses, such as ASIC, FCS, and CySEC, which will help keep your investment safe.
MiTrade platform - ASIC regulation, Trade with Ease and Confidence
MiTrade’s platform was designed with a simple sign up process and intuitive use so that you can start your trading journey with a user-friendly environment.
1Step 1: Sign up and choose your account type
When you go to our homepage, you can choose between a Demo Account or a Live Account after filling in your personal information. The main differences include:
2Step 2: Choose the currency that is in line with your goals
Consider the top 10 cryptocurrencies to invest in from our list and choose one that you think suits your needs and level of experience.
Open a position on the platform and manage the risk for your trade.
>>> Open a buy position when an investor anticipates a future rise in the price of a cryptocurrency.
>>> Open a sell position when an investor anticipates a future decrease in the price of a cryptocurrency.
You are free to diversify your investment portfolio because Mitrade currently offers more than 100 different products, including:
✔️60+ forex currency pairs
✔️11+International stock indexes (SPX500, Nasdaq100, etc.)
✔️9 kinds of commodities (gold, silver, crude oil, etc.)
✔️5 cryptocurrencies with the largest trading volume (BTC, ETH, XRP, LTC, BCH)
✔️30 popular US share derivatives (such as Apple, Google, etc.)
Make use of the risk management tool on MiTrade to minimize unnecessary losses on your trades! The instrument panel is displayed right after you open a position on MiTrade, including Take Profit, Stop Loss, Trailing Stop Loss, Limit order.
3Step 3: Close the position and withdraw your profit
Once the trade has seen some profit, you can close the position and withdraw the money to your personal account.
We recommend recording your transaction history, so that you learn from your experiences and work towards becoming a more efficient trader. Time is money, and your progress depends on how quickly you can learn the ropes.
So what are you waiting for? Open your account and start your trading journey!
- Gainers & Losers
At the time of writing, we have seen a jump in the price of many cryptocurrencies, and especially the big players like Bitcoin in 2020.
BTC has seen an increase from around $10,000 in February to over $17,000 per coin as of November 2020. There is no sign of it slowing down, with the pandemic in full swing and continuing tensions between the two global economic leaders: US and China.
The Crypto Research Report (CRR) estimates that Bitcoin will exceed $19,000 in 2020 and continue to increase over the next years, reaching so much as $341,000 in 2025.
Similarly, Ethereum is said to continue in an upward trend over the next few years. Since the beginning of 2020 it has seen an 190% increase in price and doesn’t seem to be slowing. CRR estimates it will reach upwards of $3,500 by 2025.
Ripple, despite being low in price at around $0.30 at the time of writing, shows potential in percentage increases this year and remains the coin with the highest market capitalization. In 2020 alone it has seen nearly 30% increase in price.
The golden rule of investment is don’t invest more than 10% of your capital, which can limit your returns, especially on big-name cryptocurrencies like Bitcoin.
A broker like MiTrade can give you access to the cryptocurrency trading world and will provide trading tools to help you manage risk and trade more effectively.
Investing in cryptocurrencies isn’t for the faint-hearted - the market is volatile and can shake up even the most surefire predictions. This can be used to your advantage, and if you are a trader that enjoys high risk, high reward situations, then cryptocurrency is right for you.
So why are cryptocurrencies worth investing in? For starters, you may have the opportunity to get ahead of the upwards curve. The way our world is shaping up at the end of 2020 and moving into 2021 shows a shift in the global market.
The pandemic has significantly impacted our way of life, and it’s likely time for new types of currency to establish themselves among the mass public. With something as unexpected as COVID-19 shaping our use of technology and cashless services, online, finding the best cryptocurrency to invest in seems a likely next step.
The content presented above, whether from a third party or not, is considered as general advice only. This article does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Mitrade does not represent that the information provided here is accurate, current or complete. For any information related to leverage or promotions, certain details may outdated so please refer to our trading platform for the latest details. Mitrade is not a financial advisor and all services are provided on an execution only basis. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. *CFD trading carries a high level of risk and is not suitable for all investors. Please read the PDS before choosing to start trading.