The year is shaping up to be one of recovery in the investment world, particularly in the cryptocurrency sector.
While uncertainty remains due to the fact that the virus arriving from China is latent (the second wave is now advancing over the southern hemisphere), the truth is that all forecasts expect good numbers for 2021 in terms of investments in the stock market and, in particular, in the broad spectrum of digital currencies.
First of all, all those who are thinking of diversifying their portfolio and targeting the crypto universe should know that these are highly volatile assets, which can be very beneficial when it comes to making big gains very quickly, but also a real headache if everything collapses.
2021: bullish year for cryptocurrencies?
Most specialists (those who have always been the biggest advocates of cryptocurrencies, and some others as well) say that this will be a “bullish” year for the sector.
There are many recent signs that indicate this, such as the IPO of Coinbase (on April 14), one of the three largest exchanges in the world.
Previous estimates indicate that it could reach a valuation in excess of €49 billion.
An analysis by digital asset class company Fidelity Digital Assets confirms the growing interest of traditional investment sectors, such as funds, in the cryptocurrency segment.
The study, which covered 775 institutional investors in the U.S. and European Union countries and was conducted last year, says the appeal and acceptance of cryptos is “ever-increasing” and “advancing unabated.”
According to the survey, 79 percent of investors see some appeal in digital currencies and tokens, and that 35 percent were already investing in them.
Of that 35 percent, 65 percent were buying the digital assets outright.
On the other hand, six in 10 of the investors surveyed said that cryptocurrencies should have a place in their portfolios.
Growing market: cryptocurrencies
The research says there was a 5 percent increase in U.S. investment in cryptocurrencies, although the most considerable increase was in the futures market sector.
The most purchased digital asset was Bitcoin. More than 26 percent of respondents who bought cryptos said they purchased Bitcoin, at the same time as 10 percent bought Ethereum.
Bitcoin and Ethereum are the two digital currencies with the largest market volume.
Bitcoin is by far the best known as it was the first cryptocurrency to appear. Bitcoin is by far the best known as it was the first cryptocurrency to appear.
It has some “younger siblings”, such as Litecoin and Dogecoin, which, like Bitcoin, are supported by the same blockchain concept.
Ethereum is the second-largest blockchain platform by the number of daily transactions. While similar to Bitcoin in a broad concept, its blockchain is created to give greater versatility and go beyond just being the underpinning of a digital currency.
Ethereum focuses on the use of smart contracts (e-contracts) and the long-term goal is for it to be a new “network of networks”, like a kind of renewed Internet in which decentralized applications (dApps) are generated for wide-ranging uses.
More and more cryptocurrencies are born
There are currently about 11,000 virtual currencies and new ones continue to appear that are created through so-called ICOs.
The differences between these digital currencies lie in the technology they use, the type of encryption, and their philosophy. While the vast majority of cryptos use blockchain technologies, it is not the only one.
In addition to Bitcoin and Ethereum is Binance Coin, the third-largest by market capitalization.
BNB is the official digital currency of the Binance exchange.
This crypto was born to support transactions within the Binance platform. BNB is the official digital currency of the Binance exchange.
The developers are this exchanging house, they are trying to aggrandize the relevance of their token by funding projects with contributions from users through Binance coins.
Cardano and Theter
Another of the investment alternatives in cryptocurrencies this 2021 is Cardano (ADA), a digital currency that is noted as the third generation of blockchain because it seeks to bring solutions to the scalability problems of the second generation (such as Ethereum).
Cardano differentiates itself by using a unique mathematical principle in its consensus system and a specially designed multi-tier architecture, which sets it apart from other blockchains.
Part of the creators were in the early days of the Ethereum network. For some, ADA will be the true cryptocurrency revolution.
Tether is also a growing currency. It is a stable digital currency (or stablecoin). Tether is also a growing currency.
Unlike classic cryptocurrencies, such as Bitcoin, whose price fluctuations keep them away from investors looking for a safe haven without high volatility, stablecoins guarantee stability.
They obtain this stability because the value is linked (or collateralized) to fiat currencies (dollar, euro), to a basket of currencies, or to other types of assets of constant valuation, such as gold.
Tether was created to bridge the gap between fiat currencies and cryptos. And it is succeeding.
A big “hope” in the crypto ecosystem of 2021 is Polkadot (DOT). It could be defined as a blockchain protocol that attempts to connect the various blockchains that exist into a single chain with universal reach.
It wants to solve one of the biggest difficulties that the cryptocurrency system, in general, has: non-interoperability.
In the same way as the vast majority of other blockchain infrastructure projects, Polkadot has its native token, the DOT.
The price of the DOT crypto has been steadily rising over the past 12 months, reaching in April 2021 worth $38. A year earlier, it was no more than $4.
Some specialists say that the true continuation of Bitcoin will be Ripple (XRP), due to the fact that this digital currency was designed by previous developers of the most famous crypto with the idea of optimizing its features.
Ripple’s goal is to interconnect banks, payment processors, and cryptocurrency exchanges to achieve a global, fast, and cost-effective system.
In the same way as Bitcoin, XRP is a secure, cryptographic system where the information of each transaction is public, but what happened with each payment, is not.
This means it is a highly confidential system in which senders and receivers are the only ones who have the information and the codes to decrypt it.
More cryptocurrencies: Uniswap and Litecoin
One of the biggest attractions in today’s crypto ecosystem is Uniswap, a complex program that uses the Ethereum blockchain and makes it possible to make decentralized exchanges (or swaps). With Uniswap it is possible to exchange an Ethereum token without having to leave the funds with third parties.
In parallel, assets can be lent for reserves called “liquidity pools”. For lending money to these reserve pools, commissions are earned.
The value of the Uniswap token increased 12-fold in one year.
We talked about Litecoin earlier as a “better brother” to Bitcoin. Let’s expand: it was created by a former Google employee, Charlie Lee, and it has a wider cap than Bitcoin.
There are already almost 58 million Litecoins in circulation and, because of that, some specialists say it will be the crypto of the future.
How to invest in cryptocurrencies safely
Although investing in cryptocurrencies is relatively simple today, it is not a risk-free activity.
Similarly, we find a multitude of exchanges (exchange houses) located in tax havens, China, or in places that do not require any type of regulation and offer no guarantee to the customer.
One of the few reliable alternatives we found is the broker eToro.com, one of the most well-known and widely used exchanges worldwide. Based in London and authorized by the CySEC and the FCA. It is the favorite choice of more than 20 million investors worldwide. It’s fast, it’s easy and it has the guarantees required by the European Union.
Legal and Risk Warning: eToro is a platform that offers CFD and non-CFD products. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Cryptoassets are highly volatile and unregulated investment products. They do not have EU investor protection. Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.
eToro.com, with all the regulations and guarantees required, is the only exchange that we can recommend to our readers without reservation. In addition, eToro.com allows you to add funds instantly via Paypal, credit card, among others. (If you want to know more about this broker you have at your disposal a complete review of eToro).
Creating an account at eToro.com takes no more than 5 minutes and is completely free:
And start investing in cryptocurrencies with a broker regulated and reliable
Legal and Risk Warning: eToro is a platform that offers CFD and non-CFD products. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Cryptoassets are highly volatile and unregulated investment products. They do not have EU investor protection. Indicative prices for illustrative purposes. Past performance is not an indication of future results. Trading history presented is less than 5 full years and may not be sufficient as a basis for investment decision. eToro USA LLC does not offer CFDs and makes no representations and assumes no responsibility for the accuracy or completeness of the content of this publication, which has been prepared by our partner using specific information not publicly available about eToro. Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.