The advancements in the technologies implementing seamless financial transactions are paving the way for the global adoption of decentralized financial systems (DeFi) to create a stable economy. Despite the many drawbacks publicized in mainstream media about venturing into cryptocurrency, all of which may be true, they are still beneficial to the global economy and the global audience.
It is worthwhile to discover more about tokenomics so that you can better understand how token economy works and constitutes the establishment of a truly decentralized global economy. Doing so can further help you better recognize the benefits of investing in cryptocurrency.
Premium Benefits of Investing in Best Cryptocurrency
Establishing a viable form of payment that can potentially replace the existing traditional global financial systems demands several characteristics from the alternate payment method that can suitably plug the gaps that limit the economy from becoming consistently stable.
Beyond addressing the volatility aspect of the moving economy, the alternative method should fulfill the current use cases and present positive impact and implications for the businesses and individual entities that utilize them daily, which are all fulfilled by a cryptocurrency-fueled token economy.
Hence, the following are the presently observed chief advantages that the best cryptocurrency on the market can deliver.
Note: These critical advantages should also appear in any newly emerging cryptocurrencies. They should also inevitably carry them to support or rival the existing best cryptocurrency on the market.
A straightforward transaction is essential to running a business smoothly. The intervention of agents, representatives, generally hamper it and managing paperwork and particular applicable conditions. The same is also valid for asset transfers and international trades, which upon each multilayer enact its separate processing fee and such.
Adopting cryptocurrency into this process can eliminate the middleman with the P2P model. The unfathomable paperwork is also removed that can be conveniently furnished using the blockchain ledger and the smart contracts made upon it.
The typical data structure maintained by the existing banking systems using traditional currency prepares a document listing all your transactions, including any financial transactions that you may not want to reflect in your annual statement.
Blockchain ledger keeping using cryptocurrency can resist this practice by smart contracts that can be made explicitly upon agreement between both parties to share only relevant information tied to the nature of the specific transaction you want to complete. In this scenario, the data you may share will be voluntarily instead of offering some institution of your entire transaction history when you don’t want to do so.
Moreover, by relying on banking organizations that centralized financial institutions control, you give them the ownership of your monetary assets. Now, those assets can be compromised at any time without first-hand disclosure to you, especially when you’ve knowingly or unknowingly breached their terms or specific policies.
Instead, using cryptocurrency can let you store your blocks or crypto coins securely on private devices if you don’t trust third-party crypto wallets. Thus, establishing the highest level of confidentiality of your transactions and your financial assets.
You eliminate the multiple transaction fees levied on your purchase or sale when you use cryptocurrency to complete the trade instead of using fiat money to end up paying more towards taxes and fees that may escalate the actual cost of the trade.
Beyond this, smart contracts that use cryptocurrency can manage a global credit system of an individual and organizations. It helps prevent securities fraud and misuse of money that will be lent via smart contracts that access the blockchain to fetch your credit score details accurately.
Lastly, the cryptocurrency with the highest adoption will remain in the rotation in the economic market leading to fewer chances of economic stagnation and providing multiple avenues to use it across different sectors, proving its flexibility and scalability for the long term against the fiat currency.
Key Parameters of Determining The Best Cryptocurrency to Invest In 2021
How does one go about recognizing which is the best cryptocurrency investment that holds the potential to yield the maximum return? It’s both simple and complex when you identify the different factors that influence its value, along with the variables that parallelly allow it to co-exist with the DeFi systems of various types that rely on blockchain protocols.
Here are the distinguishing parameters whose study and application can help you pick a cryptocurrency to invest in 2021:
- Exhaustive Supply
The supply ratio of a coin determines its circulation in the market. While circulation helps keep the economy stable, having an infinite supply of a coin will reduce its scarcity and value. By the supply and demand theory, such coins can retain some value only if they’re also in demand. Hence, determining the supply of a coin is essential as verifying its demand before you venture into investing in it.
- Price Variations
Certain coins only gained a positive vertical value due to them entering the mainstream market with social media platforms like dogecoin. Investing in such coins can be risky because their price variations are astronomically high, reducing their stability to a mere gamble.
You can invest in such coins if your risk profile allows but otherwise, look into the price variation history of the coins in the market. Avoiding the pump and dump coins would comparatively prove beneficial in the long term as those coins have limited utility while offering high gains.
- Blockchain Projects & Technology
Speaking of the utility of the coins, one should note that the blockchain technology that facilitates them should be developed enough for you to use those coins to accomplish more than one purpose.
For instance, the Ethereum coins have more utility than mere tokens you can leverage for trade because its blockchain operates smart contracts beneficial to the healthcare, banking, and service sectors.
Thus, such coins whose blockchain technology is better developed will prove to be a reliable investment for your capital in scenarios where you want immediate liquidity of your crypto investments.
- Align with Tokenomics
Like the traditional economics of fiat money, which appropriately defines its distribution, quality of value, and influencing factors, a cryptocurrency should follow the rules of token economics or tokenomics. The coins that hold the potential of multiple distribution cases besides having a relatively stable value quality with more than one influencing factor determining its value are better.
The Top Best Cryptocurrency to Invest in 2021
Considering that you’re now familiar with the aspects that you should consider before investing in a cryptocurrency, here’s a list of a few of the ideal crypto investment opportunities that you can grab in 2021:
- Bitcoin (BTC)
Bitcoins are the origin of cryptocurrency, and like most other crypto-currencies, it runs on blockchain. The transactions are recorded on a distributed ledger logging system built on a network of thousands of computers. Each addition to the transaction record undergoes verification by solving a cryptography problem or, in other words, proof of work. It implies the negation of fraud and security of the coin.
The value of bitcoins has grown exponentially over the years as it rose to familiarity after 2016. Its previous valuation of $500 per coin today stands at approximately $44,000 as of August 2021. Therefore, the growth of the coin stands at more than 8,000%, and it’s only bound to grow considering its market cap of over $856 billion.
- Ether (ETH)
Ethereum offers wide applications of its blockchain technology while also being a form of cryptocurrency. The smart contracts that operate on it help execute operations based on predefined conditions, which helps in facilitating the sales of assets like NFTs and other crypto transactions automatically.
The growth of Ethereum in the previous years is a sure sign of its usefulness increasing furthermore as it incorporates interoperability of its ether tokens with multiple marketplaces tied to the giant art, finance, and gaming industry.
For actual proof of its value, the price of an ether token stood at a mere $11 in 2016, which today exceeds the value of $3000, reflecting a 27,000% gain suitable for its current market capitalization of more than $356 billion.
- Binance Coins (BNC)
Binance is one of the largest crypto exchange platforms that exist today, and Binance cryptocurrency is one of the most famous in the market. The usefulness of its cryptocurrency today exceeds the functionality of assisting trade on its exchange platform by also supporting global booking for travel arrangements and payment processing.
Moreover, Binance coins can also be exchanged for other cryptocurrencies like Bitcoin or Ether. Such prospects have benefited its value of $0.17 in 2017 by over 420,000% to date. Its present value stands at around $420 with a market cap of +$70 billion.
Honorary Mentions of Other Best Cryptocurrency to Invest in 2021
- Cardano (ADA)
Cardano blockchain might not be all too famous, but it also supports smart contracts and decentralized applications while offering proof of stake validation. It allows the Cardano cryptocurrency to almost negate the transaction time while using less energy, positively impacting the environment.
Its current market cap exceeds the valuation of $69 billion with a growth rate of more than 10,000%. From $0.02 in 2017 to $2.11 in 2021, it has observably shown a positive and promising increase.
- Tether (USDT)
The current market cap of this cryptocurrency is more than $64 billion, and some consider it to be a stablecoin because it’s backed by two powerful fiat currencies, namely the USD and Euro. Such an arrangement helps stabilize its value to almost an equanimity besides garnering the interest of investors who vary the volatility of other crypto tokens on the crypto market.
- XRP (XRP)
XRP is a digital payment processing platform with its own cryptocurrency called XRP. A buyer of this cryptocurrency can utilize it for exchanging it with other crypto coins and fiat money, which has given its value a raise of over 18,000% in the past five years with a market capitalization of more than $52 billion.
The Best Cryptocurrency to Invest Takeaway
Each of the mentioned cryptocurrencies is heading to promise a better value in the upcoming years as blockchain technology develops, which assists its crypto coins in terms of its application and its exchange cases with other crypto coins.
Ultimately, the best cryptocurrency to invest in can depend on the growth of its use case, which will help boost the chances of obtaining the maximum expected reward by the culmination of its supply at its exhaustion.