I’ve came across questions like what is the best crypto to invest in? You’ll probably ask this question before investing in any of the digital currencies out there. Investing in cryptocurrency is one of the profitable businesses you can venture into.
However, choosing the best cryptocurrency to invest in can be challenging. As a result, we’ll be discussing about what you should know before investing
in cryptocurrency and the best cryptocurrency to invest in.
In this article, we’ll be discussing the following:
What is Cryptocurrency?
Cryptocurrency is a digital currency that serves as a medium of exchange for services online which uses cryptography to secure all transactions.
I’ll say that Cryptocurrency is digital money. It’s just like money but doesn’t exist in physical form, it can only be used online.
Most of us already know what Cryptocurrency is all about or you may’ve at one point or the other came accross names like Bitcoin, Ethereum etc (more on this topic). Bitcoin is one of the most popular Cryptocurrency that has gain trust and has been since 2009. It was created by by Satoshi Nakamoto, an unknown person.
Other popular ones are Ethereum, Bitcoin Cash, Litecoin and Ripple. You can exchange real money (physical money) for any cryptocurrency you want.
What is the difference between Cryptocurrency and Physical Money?
I once asked this question some time ago. I heard people calling Cryptocurrency everywhere on social media but didn’t understand it until I read an article like this. So I’ve decided to include it on this post so if you’re confused about what differentiate Cryptocurrency from real money then this part of the article is for you. Let me quickly share with you few difference between Cryptocurrency and Physical money.
Note: The word Real money and Physical money is used interchangeably in this article, so don’t be confused about it. Both still mean the same physical money you use to buy plantain chips.
Alright, lets dive in.
- Cryptocurrency doesn’t exist in physical form like real money. And it’s used as an exchange outside the control of government.
- Cryptocurrency can be spent anywhere spent anywhere in any country. Unlike physical money that you’ll have to visit the bank to exchange your money when you’re in a different country.
Is Cryptocurrency Profitable?
I’ve came across this question severally about potential investors wanting to know if Cryptocurrency is profitable or if they should invest in Cryptocurrency or not. Well, I would like you to know that it depends on how familiar you are with crypto and the level of your risk tolerance.
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To be sincere, cryptocurrency is one of the profitable investment and a good thing to invest your money in.
On the other hand; it’s one of the riskiest investment one can venture in.
This means that you can earn a decent amount of money if you invest in cryptocurrency and also, you can lose money if you invest in it. In other words, investing in cryptocurrency can make you, and at the same time, it can wreck you.
If you can’t deal with risk, then
investing in cryptocurrency isn’t for you. Although almost all
investments carry a degree of risk, the one with crypto is just too
But if you have the money to play around with cryptocurrency, you can go ahead and try your luck.
Best Cryptocurrency to Invest in 2021
In this section, let’s take a look at some of the best cryptocurrency to invest in.
While there’s no rule of thumb for the best cryptocurrency to invest in, the best one that’s worth buying are those that have a large market cap.
1. Bitcoin (BTC)
Bitcoin is ono of the best cryptocurrency you can leverage in this year. As we all know, Bitcoin is the first cryptocurrency in the market launched in 2009 by Satoshi Nakamoto. It is a decentralized digital currency which makes use of blockchain technology.
It allows for peer to peer transaction without the need for any third party. With Bitcoin, you can easily send payment to anyone in the world. Although it takes longer time than Ethereum (about 10 minutes) to execute transactions. Some companies make use of BTC as a means of payment.
The way Bitcoin fluctuates usually annoys some investors. For instance, its price in 2017 was around $19000 before it decreases in value to less than $10000. However, while Bitcoin price fluctuate so much, many investors still consider it as one of the best cryptocurrency to invest in because of its large market cap.
2. Ethereum (ETH)
Ethereum is a community-built technology which was created in 2012. Regardless of your location, Ethereum is open access to digital money for everyone. It’s one of the most popular cryptocurrencies in the world. In fact, it’s only second to Bitcoin as the biggest cryptocurrency.
You can move money directly with someone else without government or any company approval. This makes it impossible for anyone to alter its operation.
There’re other stuffs you could do with Ethereum. Most investors are already investing in ETH to earn profit. If you’re considering investing in cryptocurrency, then Ethereum is one of the best cryptocurrency to invest in. It’s a long term investment you should consider.
3. Litecoin (LTC)
Litecoin was launched in 2011 by Charlie lee. It is a peer to peer cryptocurrency which also make use of blockchain technology. And its identical to Bitcoin. However, Litecoin process transaction much faster than Bitcoin.
Unlike Bitcoin, Litecoin usually takes about 2.5 minutes to complete transactions. That’s 4 times faster than Bitcoin’s 10 minutes. And it will likely be adopted as a means of payment than Bitcoin. These factors, however, don’t impact the value of the currency.
If you’re asking, is Litecoin one of the best cryptocurrency to invest in? Then I’ll say yes. Considering its strength, Litecoin has proven to be one of the best cryptocurrency to invest in.
4. Ripple (XRP)
XRP is a decentralized blockchain technology which was launched in 2012. It’s a digital asset built for payment. XRP can be sent directly without the need of a third party. Its focus is to unleash new utility for XRP and transform global payments.
Ripple is faster than Bitcoin, Ethereum and Litecoin as it settles transactions in less than 5 seconds.
It’s made to improve global economy. The low token price means that almost anyone can invest in XRP. It has a high growth potential. And it’s also one of the best cryptocurrency to invest in.
The above listed digital currencies are some of the best cryptocurrecy you can invest this year. Although most of them seems very expensive such as the Bitcoin, so I advice you to be careful with the amount you invest. Invest with what you can afford to loose.
What You Should Know About Cryptocurrency
All cryptocurrency value usually fluctuates since market prices are based on supply and demand. Bitcoin price in early 2020 was around $10000 before a hype to its current price, for instance.
You can make profit with any crypto as any of it can have a price surge at any given time. And knowing when you should buy a given crypto is the trick to making profit.
However, there’s no pattern at which a particular cryptocurrency value goes up and down. As a result, no one knows the best cryptocurrency to invest in at any given time. And this is one of the reason why investing in cryptocurrency could be risky.
You probably would have seen sites like Forbes predictions about cryptocurrency, it’s just a prediction. The truth is, no one knows exactly when a particular crypto will increase in value or decrease.
If it’s easy to know the best cryptocurrency to invest in at a particular time, everyone will be rich.
Advantages of Investing in Cryptocurrency
Below are some of the reasons why investing in cryptocurrency is probably worth it.
- Cryptocurrencies are decentralized. This makes it easy to transfer funds directly without the need of a third party; it’s only the sender and the receiver.
- Investors stand the chance to earn good profit from the crypto world. The reverse is also true, though.
- Cryptocurrecy has the potential to preserve value against inflation.
- Investing in cryptocurrecy is secure. There is an encryption to protect all the transaction from hackers.
There’re number of reasons why you should dive into the world of crypto. If you’re curious about investing in cryptocurrency, you ought to have a basic understanding of how it works to know the best cryptocurrency to invest in at a particular time.
Disadvantages of Investing in Cryptocurrency
While most investors already consider cryptocurrency as a good investment, here are some of the facts I don’t like.
- Cryptocurrencies are too volatile. Their price can increase or collapse at any time. As a result, cryptocurrency seems to be an unreliable investment. There isn’t any proven rate of return. This is one of the reasons most of the top millionaires don’t invest in cryptocurrency.
- It’s not regulated. The technology is not under control or supervision of the government. This means there will be increased risk in investing in cryptocurrency.
- Cryptocurrencies can be used for illegal activities. This is one of the shady things in the crypto world. It can be used for fraudulent activities due to the fact that it’s not regulated. And it’s no more news that criminals are using the technology for illegal activities such as money laundering.
Since cryptocurrencies are not regulated by the government, any of the asset can disappear. There is no assurance that any cryptocurrency will remain for lifetime. Even Bitcoin, Ethereum and other popular cryptocurrencies is not an exception.
Conclusion: Best Cryptocurrency To Invest in 2021
Cryptocurrency will continue to be a risky investment until it is widely adopted. And choosing the best cryptocurrency to invest in depends on your risk tolerance level and the one that best suit your needs.
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