The recognition of digital assets at the level of Russian legislation has forced many to pay attention to the prospects of cryptocurrencies. In April 2021, the total capitalization of the cryptocurrency market exceeded $2 trillion. For comparison, the capitalization of Microsoft for the same period is $1.82 trillion, Apple – $2.06 trillion, and a similar figure for gold – about $11 trillion. Bitcoin and other crypto-assets are growing; big companies are increasingly actively investing in them. This article will touch on what cryptocurrencies have prospects for development and what affects the rate.
What does the outlook for cryptocurrencies depend on?
The cryptocurrency market almost doubled in the two months from February to April 2021. Experts attribute this to the growth of investment interest. Let’s talk more about how this manifests itself.
First, the pandemic crisis led to a drop in yields on exchange-traded instruments and a decline in interest rates. Investors were forced to turn their attention to cryptocurrency, the rate of which has kept high and continues to grow. Some have begun to use it as a hedge instead of gold.
In early April 2021, one of the largest asset management companies, Fidelity Investments, joined the Cryptocurrency Council (CCI). The council’s task is to promote the interests of the crypto industry in state bodies.
Second, the enormous cry most prominentencies Bitcoin and Ethereum attracted investments from large companies, which further fueled their attractiveness in the eyes of private investors. For example, after Tesla announced its $1.5 billion bitcoin purchase, the coin’s exchange rate jumped 23%. Among the investors who have invested in bitcoin are significant companies such as MicroStrategy, Mogo, and Square.
In April 2021, the cryptocurrency exchange CoinBase listed its shares on Nasdaq and was immediately valued at nearly $100 billion – more expensive than oil giant BP.
Third, cryptocurrencies are gaining wider and wider acceptance at legislative and business levels. VISA, MasterCard, and PayPal have already said they will start processing cryptocurrency payments in 2021. This means that the latter could become a full-fledged payment instrument.
This point is worth highlighting separately. Analysts agree that digital currencies will rеplace fiat ones. At the same time, only a few crypto-enthusiasts use them to pay for goods and services.
Which cryptocurrencies have prospects for development in 2021?
Bitcoin remains the most popular cryptocurrency in Russia and worldwide. In addition, our compatriots actively use Ethereum (ETH) and Tether (USDT).
When evaluating a particular cryptocurrency for 2021 and beyond, there are several factors to consider:
- Liquidity – the ability to exchange a digital asset for fiat money at the market rate at any time.
- Development potential. Behind many altcoins, there are valuable systems, and the technical functions of a particular coin must be in is understandable to you and applicable in real life.
- Stability of the course.The reputation of the team of creators.
Against this background, one cannot ignore the prospects of new cryptocurrencies. Many projects are still in the shadows but are already attracting investment. Here are a few examples.
Siacoin
This is a coin of the Sia decentralized storage system. Users worldwide give the plan their hard drive space on their computers, and the security is provided by blockchain technology. The owner of a Siacon can use the system for their files. The coin is used for bilateral data storage agreements, rewards, and other transactions within the network. Siacoin has seen strong growth in recent months.
IOTA
IOTA is an alternative data transmission technology for the Internet of Things (IoT). It works similarly to the blockchain, protecting IoT transactions from unauthorized access. As the Internet of Things itself, the system is still relatively new and under active development as the Internet of Things itself. Its important advantage is that the processing speed does not slow as the number of data and transaction participants grows. This is due to the Tangle technology, where transactions can be performed in parallel, with each successive transaction confirming the previous two. Unlike blockchain, there is no separation between users and validators and no mining. To send a transaction to IOTA, you must validate the last two.
In the first three months of 2021, IOTA went up 573%.
BTT
This is the coining of the file-sharing system BitTorrent, a cryptocurrency whose prospects depend on the popularity of the tracker itself. BitTorrent remains the most potent peer-to-peer network globally, and the coin is designed to merge it with blockchain. The users on the giveaway will receive their remuneration in btt-cryptocurrency – not a bad prospect to make money without mining, just using the tracker.
THETA
THETA Network blockchain token, which provides video streaming. Thanks to blockchain technology, the project has a very high throughput. THETA is growing at an astronomical rate: more than 1000% in the first three months of 2021. It has already surpassed Litecoin and Chainlink in capitalization, entering the top 10 by this indicator.
Stellar
A project supported by IBM. Its goal is to develop the payment infrastructure, so the system is already working with several banks. Besides, Stellar is a scalable blockchain platform for creating applications. This cryptocurrency did not attract attention for a long time, but now its prospects inspire more and more optimism.
Ripple
Ripple (XRP) steadily reaches the top of the ratings of promising cryptocurrencies. This coin was created for exchange transactions with no chargebacks. Its advantage is the consensus registry, which makes the transaction speed much higher than bitcoin. Ripple is in high demand among miners and shows a stable growth rate.
Ethereum
The most popular altcoin today. The Ethereum system is open, and anyone can use it to create decentralized applications. ETH promotes the spread of blockchain technology. The coin’s growth earlier this year was facilitated by creating the Enterprise Ethereum Alliance (EEA). This is an alliance of companies that develop projects based on Ethereum. It includes, for example, such giants as JP Morgan, Intel, and Microsoft.
Bitcoin
The very first cryptocurrency does not give up its position. Bitcoin’s capitalization as of April 2021 is about $1.2 trillion, higher than all other altcoins combined. Despite the fluctuations, the price of bitcoin continues to rise steadily. Some experts predict that it will reach $200,000 per coin. Due to its popularity among investors, bitcoin is traded on all exchanges. You can buy it quickly and at a favorable rate, even if you are a beginner and have never bought cryptocurrency. Mine processes thousands of such transactions daily, thanks to the high speed of transaction processing and quality tech support.
Summary
The outlook for cryptocurrency growth in 2021 is optimistic. Investors are increasingly willing to invest in digital assets amid falling returns on traditional exchange-traded instruments.
When choosing a cryptocurrency for investment, pay attention to the applicability of the blockchain project itself in real life, the development team’s reputation, and the coin’s liquidity.
Analysts note the steady growth of the NFT and Defi segments. Therefore, investors are watching tokens of Defi projects and blockchain tokens based on which such projects can be created (for example, the identical Ethereum, Polkadot, TRON, Cardano, Chainlink, and so on).
For beginner investors, it is better to distribute funds between popular coins, investing only a small part in new and more high-risk assets.
