Best cryptocurrencies to invest in December 2020: top-four picks for the end of the year
How did the crypto industry fare so far in 2020?
The year 2020 has been a very difficult one, for a lot of obvious reasons. However, it is also worth noting that it has been one of the best years for the crypto industry since 2017.
It started with a strong surge that took most cryptocurrencies quite high up by mid-February. There was a bit of a crisis in mid-March, when Covid-19 went global and fears of the pandemic caused an economic meltdown around the world.
But, unlike stocks, bonds and other traditional assets, the digital coins recovered rather quickly. In fact, the prices started to grow immediately after hitting the bottom.
The recovery was strong, continuing from late March throughout the summer. By the end of August, there was a slight price correction, which once again turned into a strong surge that has lasted until now, November 26.
These days, Bitcoin (BTC) is the coin that has recovered the most from the 2018 crypto winter, with its price reaching $19,000, sitting only around $1,000 away from its all-time high of $20,000. However, many other major cryptocurrencies have experienced considerable value hikes as well.
The crypto industry has also seen an emerging trend in 2020: the rapid growth of the decentralised finance (DeFi) sector. DeFi brings decentralised banking services to everyone in the world, offering the same benefits as centralised banks and financial institutions, such as loans, but without complicated processes. It does not exclude people based on where they live, their credit score and other obstacles that users tend to encounter when attempting to work directly with the banks.
The crypto industry has also enjoyed a plethora of excellent news regarding adoption, including PayPal (PYPL) the – world's largest online payments company – announcing that it would add support for a handful of largest cryptocurrencies. PayPal already allows US citizens to use crypto at the time of writing, November 26, while the rest of the world will get access to the same functions in 2021.
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What are the best cryptocurrencies to invest in December 2020?
Every year, the crypto industry becomes the most active when December approaches. This is by no means a rule of any kind, but history shows that the crypto industry does become the most active before the winter holidays. As a result, traders and investors always want to know what cryptocurrencies to invest in December.
Based on the market performance, fundamental and technical analysis, and the general market sentiment, we have created a list of the best cryptocurrencies to invest in December 2020.
Bitcoin (BTC)
It should come as no surprise the Bitcoin is once again dominating the list of cryptos to invest in. The coin has seen a 160 per cent price growth on a year-to-date (YTD) basis, going from roughly $7,200 in January 2020 to $19,100 on November 24, 2020.
On November 26, the coin's price currently sits slightly lower than this, as it experienced a 9 per cent drop in the past 24 hours, after its price was rejected by the resistance level at $19,000. However, numerous predictions from experts in the crypto industry have claimed that BTC will reach and exceed its former all-time high by far.
The experts do not agree on how far the coin might go – some claim $50,000, $75,000, or even $100,000. There were also many unlikely forecasts, which predicted the BTC price hitting $500,000, or even $1m. While Bitcoin does have the potential to climb this high some day, this likely will not be the case for years to come – until mass adoption, at least.
But, one thing that experts do agree upon is that Bitcoin is definitely going beyond $20,000, so even though its price is currently near its former record, there is reason to believe that it will go much higher in the weeks and months to come. Keep in mind that there is no guarantee that this will happen but many do expect it. These predictions make Bitcoin the best crypto to invest in December.
Ethereum (ETH)
The ETH price saw a steady performance throughout 2020 and it even managed to hit a new two-year high on November 24 when it crossed $600. However, Ether is still quite far away from its own record price, which was $1,400, reached on January 13, 2018.
The coin did not even reach half of its former all-time high, meaning that it still does not perform anywhere near as well as Bitcoin. However, that does not mean that the coin does not have potential.
Ethereum has held the industry's largest collection of dApps and smart contracts, both of which were invented on Ethereum before spreading out to other blockchains. It is also home to DeFi, which only started receiving the attention it deserves in 2020.
But that is not the reason we have listed Ethereum as the second-best crypto to invest in December. The reason is the fact that Ethereum's long-awaited upgrade, Ethereum 2.0, is finally about to arrive. Phase 0 of the upgrade has already been completed and the process will continue on December 1. The event is possibly one of the biggest in the project’s history and it will certainly have a strong impact on its native coin’s price.
Ripple (XRP)
Then, we have XRP – traditionally known as the third-largest cryptocurrency, which has since lost its rank to Tether (USDT). However, over the past few days, XRP saw a massive price increase which allowed it to reclaim its old position.
XRP, a cryptocurrency created by the Californian crypto start-up, Ripple, surged by 83 per cent over the past seven days. Like the rest of the crypto industry, XRP is currently caught up in the price correction. But the company behind the coin has done much over the course of the past few years to secure that XRP will keep its use cases and recent efforts were even directed towards securing new ones.
Ripple is working on making XRP used for smart contracts, which could help further boost its price. Not to mention that Ripple is partnered with hundreds of banks around the globe, many of which already use its payment solutions to make instant payments anywhere in the world through the use of XRP.
Stellar (XLM)
Stellar Lumen has been one of the best performers in the crypto industry over the past week. The coin's price skyrocketed by 102.5 per cent in the past seven days, and the coin went from $0.086 on November 20 to $0.227 on November 25.
Currently, the coin is also going through a price correction, although this could easily be nullified in the next bullish wave.
Stellar is also the only coin on this list that is currently not among the top-10 cryptocurrencies by market cap. While it also has a multi-billion market cap ($3.45bn), it presently sits as the 11th-largest digital currency.
What to expect from the crypto market in 2021?
With that, we end our list of what crypto to trade and invest in as December approaches. But what about 2021? The new year is just around the corner, and there are many investors and traders who are already wondering what the next year might bring.
As mentioned, there are many advances that the crypto industry is seeing now that will have a large impact on its near future. Ethereum's upgrade to ETH 2.0 will make the blockchain faster, more scalable, more secure, and it will enable staking, which is already extremely popular due to DeFi. Ethereum will no longer have to charge large fees for transactions due to their ever-growing volume.
Bitcoin saw its third halving only six months ago and, historically, it takes about 12-18 months for the coin to reach its new all-time high following the halving. This is one of the reasons why many believe that Bitcoin reaching its former record is only the beginning.
PayPal going crypto is a huge deal for the crypto industry and so are central bank digital currencies (CBDCs) that many countries around the world are developing, currently led by China. This will help spread awareness and interest in crypto so thousands, if not millions, of new crypto users are expected to start arriving in the industry in months to come.
And all of that only includes the largest and best-known projects. In other words, there is a lot to look forward to, as the crypto industry continues to develop and mature. All of this – and more – will likely have an extremely positive impact on crypto prices, so the overall predictions for 2021 are quite bullish.
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