Cryptocurrencies to Watch in 2021: An Industry on the Verge of a Revolution
For many people around the world, 2020 will go down as one of the toughest years ever. However, for the crypto and blockchain space, 2020 has been a year of unexpected trends. In this post we’re looking at cryptocurrencies to watch in 2021 to give you a head start for the new year 🙂
2020 saw bitcoin break its previous record of $20,000 per coin. At the time of writing bitcoin’s price sits at about $23,000 and expert predictions put bitcoin’s price at $36,603 in the coming year.
2020 will also go down as the year that saw Ethereum move to the much-anticipated proof of stake (PoS) protocol. The move to scale Ethereum via the Eth2 upgrade came just in time for the Decentralized Finance (DeFi) boom that saw the rise of Altcoins such as NEXO (an Altcoin that has so far rallied by more than 400% in a matter of months).
Needless to say, the crypto and blockchain space has had its best year as far as adoption and acceptance is concerned. This year saw the influx of institutional capital into the crypto and blockchain space as large financial institutions such as JP Morgan (that previously held a harsh stance on crypto) went all-in on crypto.
Furthermore, the printing of money by central banks across the globe in reaction to the global pandemic led many investors to view bitcoin and cryptocurrencies as a haven in 2020. Financial experts agree that this trend could continue in 2021.
For would-be investors, knowing what cryptocurrencies to watch in 2021 as the year comes to an end is an important for learning to manage finances. In this article, we will look at some of the most promising projects and discuss what to expect in 2021.
Bitcoin: The one coin to rule them all
Bitcoin’s adoption in the world of traditional finance has come a long way. What was once called a fraud by the likes of Warren Buffet is now a go-to financial instrument for institutional players who dismissed it earlier.
Throughout 2020, bitcoin has been showing multiple instances of a strong and positive correlation with seasoned traditional financial assets such as gold thus further validating bitcoins legitimacy. For that reason, George Ball who is the former CEO of Prudential Securities and the current CEO of Sanders Morris Harris (a financial services firm) opined that bitcoin or other cryptocurrencies could be a ‘haven.’
In 2020, the narrative of bitcoin as a haven was mostly driven by the uncertain state of the global economy. With mounting fears over the economic growth in light of the current global pandemic, central banks around the world went on a money printing spree to stimulate their economies. The US in particular threw more than $6 trillion at the coronavirus crisis with reports of even more increase in the future.
While fiat currencies around the globe increase in supply, 2020 saw bitcoin’s supply get cut in half through the bitcoin halving process which is a deflationary measure built into the bitcoin blockchain.
As the pandemic rages on into the New Year, experts predict the world at large will be forced into more realistic and pragmatic financial solutions therefore investors will continue to view bitcoin as a haven against an uncertain global economy. Overall the risk-reward equation is starting to shift in favor of cryptocurrencies and bitcoin as the pioneer cryptocurrency is getting the lion’s share of the attention. However, bitcoin is just the tip of the iceberg. Wait till you hear what Ethereum has to offer.
Ethereum the DeFi champion
In 2020 Ethereum has emerged as the king of decentralized finance (DeFI). The long-awaited shift from Ethereum’s proof of work protocol to the network’s current experiment with the Proof of Stake (PoS) protocol is perhaps one of the major wins that Ethereum has had this year. Ethereum’s strategy to scale its blockchain network was a welcomed reprieve. Compared to PoW, PoS is a much more efficient consensus mechanism, offers a stronger immunity to centralization, and is better suited for upgrades and scaling not to mention a lower barrier to entry.
Recent reports of skyrocketing transaction fees on Ethereum’s network proved that the network desperately needed an upgrade especially as more DeFi projects took off. The DeFi trend is by far one of 2020’s fastest-growing crypto trends as it is set to completely transform banking in terms of how insurance, loans, and saving programs are handled. By decentralizing these services and making them independent of centralized banks, DeFi is poised to bring about a financial revolution of the century. Ethereum secures its place in the list of cryptocurrencies to watch in 2021 as its PoS protocol will be better suited to host even more DeFi projects on its network.
In terms of market price movements, while bitcoin has grabbed attention having gained 160% since the start of the year, Ethereum has pulled even larger numbers clocking gains of over 340% in 2020. Experts predict that 2021 could see Ethereum’s price shoot past the $1000 mark.
Polkadot and Chainlink: 2020’s biggest altcoins
Polkadot and Chainlink are by far the two most promising altcoins of 2020. Right after the Polkadot project officially launched, the Polkadot (DOT) token joined the top ten crypto coins even rising to become the sixth-largest coin in terms of market capitalization at one point.
The Polkadot project is a brainchild of one of Ethereum’s founders and is poised to bring about the next generation of blockchain protocols that are easy to scale and more secure. As the trend of blockchain adoption continues with the emergence of multiple decentralized ledger platforms (as reported by the World Trade Organization) Polkadot is a cryptocurrency to watch in 2021 as it facilitates blockchain development.
Polkadot will be listed on CoinMetro in 2021 🙂
Chainlink on the other hand has partnered with Polkadot and is also one of the fastest-growing cryptocurrency and blockchain projects of 2020 and beyond. In a nutshell, Chainlink (currently ranked at number 7 in terms of market capitalization) facilitates the development of DeFi. Buy LINK on CoinMetro.
The Chainlink network is designed to bridge the gap between the blockchain world and the world of traditional finance. Through Chainlink, a developer can create a DeFi application cable of collecting data outside the world of blockchain and making it applicable for on-chain smart contracts. This capacity will allow people to get crypto loans, make savings, and even earn interest on their crypto. What’s more, Chainlink’s rise to the top has gained it a partnership with Google which is one of the largest technological enterprises worldwide.
Overall, the flow of institutional capital into the crypto and blockchain world is driving focus into blockchain and crypto projects with intrinsic value as opposed to speculative projects. Chainlink and Polkadot are certainly among the cryptocurrencies to watch in 2021 as they are built on real-world applications beyond speculation.
The Future of finance in 2021
Sergey Nazarov, the cofounder of Chainlink is quoted saying that “the risk-reward equation is starting to flip from traditional financial assets being yield-bearing, less risky and reliable stores of wealth and resistant to inflation over to bitcoin and various crypto assets being the sources of yield.”
Without a doubt, the growing institutional demand for bitcoin as well as the rising inflation of fiat currencies across the globe will drive the price of bitcoin and altcoins through the roof in 2021.
Kevin Murcko, our main man and CEO recently told Bloomberg: “Normally in times of crisis people run to cash but who in their right mind wants to be cash-rich at a time when major economies are devaluing their currencies? You could say that Covid-19, the U.S. election, Brexit, and, well, the entirety of 2020 have altered the way many in traditional finance view the value of digital assets.”
Besides the above mentioned cryptocurrencies to watch in 2021, the CoinMetro token (XCM) is expected to take place among the next big cryptocurrencies. Coin Metro has built a complete ecosystem for the native token after a year of hard work which results in some great benefits for XCM holders. XCM’s floor price was €0.03 and at press time, it is trading at € 0.041151.
An uncertain global economy and a raging Covid-19 pandemic will also force individual investors to look for pragmatic investment alternatives to protect the value of their wealth. So far, cryptocurrencies and blockchain have proven to be the perfect solution. Even as governments put in place more restrictive regulations on the industry, adoption is on the rise as wealthy investors continue to jump into bitcoin as crypto stigma fades.
Following the cryptocurrencies to watch in 2021, if you are looking to get started with crypto investing, read more about different trading strategies such as swing trading, day trading and margin trading from our blog. If you already know how to trade cryptocurrencies, you can head over to CoinMetro (the best crypto exchange for beginners) and be part of the future of finance.