The 5 best cryptocurrencies to invest in January 2021: Capital.com’s edition
By Ali Raza
14:00, 13 January 2021
The majority of 2020 has been very kind to the cryptocurrency sector, unlike the previous few years when considerable gains were rarely seen and prices typically kept dropping.
However, 2021 saw the crypto market explode anew. Even though we are currently still only two weeks in, the sector has seen massive growth, even breaching $1tr (£732bn, €821bn) in total market cap.
Advances were seen in many different areas of the industry: Bitcoin (BTC) reached a brand-new all-time high (ATH) that is more than twice the size of its 2017 $20,000 milestone; plenty of altcoins are also well on their way to their past ATHs; and the DeFi sector has also hit a new ATH in terms of total value locked (TVL).
The altcoin market is currently performing weaker than Bitcoin itself, as even Ethereum (ETH) – the world’s second-largest coin – is still some distance away from its ATH. This clearly indicates that the time of the altcoins has not yet arrived.
However, it would not be accurate to say that this sector of the industry has been ignored or forgotten. Altcoins have performed very well thus far, too. Just not as well as they can, and certainly not as strongly as BTC itself. With that in mind, we wanted to review some of the coins that have already shown their strength so far in 2021, and potentially give traders some ideas about what crypto to invest in January.
Capital.com’s five best cryptocurrencies to invest in January 2021
Before we begin, keep in mind that the crypto industry is as risky and as volatile as ever. Thus, when considering trading and investing, do your own research and form your own conclusions before acting.
That said, let’s get on to the coins.
Bitcoin (BTC)
Obviously, Bitcoin is the first on our list. Now, the coin is not exactly the best performer when it comes to the percentages and th the like; there are coins that have gone up by well over 100 per cent in the past couple of weeks. However, if you bought BTC when its price was $20,00 a few weeks back, you would have certainly made a great profit when it climbed up to $41,900.
Over the past several days, however, BTC also saw a significant price dip. Its value crashed down to $31,000, only to correct itself to approximately $35,000. The coin seems relatively stable for the moment, with only smaller price fluctuations over the past two days.
Many believe that Bitcoin is currently only preparing for a new surge to come and that there is a lot more room to grow, which is why it might be considered the best crypto to invest in.
Once again, be mindful of the risks, as the coin could crash down despite all the demand and growing institutional interest.
Ethereum (ETH)
Despite the fact that Ethereum has not yet reached its 2018 ATH, it is still considered a good investment for long-term investors. The ETH price did see massive advancement, as it climbed above $1,000 more than a week ago, and it only dropped below this level once, as the price correction took the entire crypto industry down at the same time as Bitcoin.
Prior to that, ETH surged up from $778 on January 3 to $1,346 on January 10, nearly doubling its price in a single week.
It is also worth remembering that Ethereum is still the largest blockchain when it comes to dApps and smart contracts, as well as the DeFi sector. It is where all three were born, and it dominates among the development platforms.
In December 2020, it finally started the lengthy process of switching to Ethereum 2.0. This process will take a while to complete, but once it ends ETH will be a lot more competent, a lot safer and a lot faster, which will definitely reflect positively on its price. So, if you are wondering what cryptocurrencies to invest in, ETH should certainly be one of the coins to consider.
Maker (MKR)
Another candidate for the best cryptocurrency to invest in now would be Maker, the biggest DeFi token out there. Maker has been around for years, and it only performed this well in late 2017 and early 2018 when it sat at similar levels.
Back then, its price reached a height of around $1,700, which was extremely impressive, and it even outperformed Ethereum. On January 10, 2021, MKR went beyond this past record, hitting $1,877.
Since then, however, its price has dipped to $1,087, only to recover to $1,400 where it seems to have stabilised for the time being. Still, as the leading coin in the DeFi sector and one of the best performers recently, Maker does seem to make a rather good investment currently.
Litecoin (LTC)
Litecoin has demonstrated excellent performance recently. It even managed to climb to the fourth place on the list of the largest coins by market cap, overtaking Ripple’s XRP for some time. Of course, XRP quickly regained this position, although it is believed that this has happened due to Asian traders’ sudden involvement, which came in fear of missing out (FOMO). However, this will likely not last for long, as XRP is in serious trouble with the US Securities and Exchange Commission (SEC).
Litecoin, on the other hand, reached a two-year high several days ago after hitting $185. This is still quite a way off its all-time high of $375, which the coin hit alongside BTC in 2017. However, given the fact that the coin started at the price of $80 on December 16, and that it doubled its price in less than a month, it is safe to say that LTC is among the best performers among the top five cryptocurrencies.
Polkadot (DOT)
Lastly, we have Polkadot, which did not only perform excellently, but it reached a new all-time high a few days ago.
Granted, Polkadot is a new coin, which only emerged in August 2020. However, after the initial surge, which took it from $3 to $7, the coin saw a correction to $4. Since then, it traded sideways for months, with only slight fluctuations.
On Christmas Day, the coin started a surge that eventually took it up to $10 by January 10. Since then, DOT also participated in a price correction which took it down to $8 but has since started a recovery which brought it back to $9 at the time of writing.
What is your sentiment on ETH/USD?
What to expect later in 2021?
As for the future of these and other coins and their prices, it just remains to be seen. Several prominent investors and analysts remain bullish on cryptocurrencies due to the massive amount of institutional interest. Bitcoin predictions are as varied as always, but many agree that the coin does have realistic chances to climb up to $50,000, $80,000, $90,000, with some even predicting $100,000 by the end of the year.
Of course, this is likely only in the best-case scenario, and it is entirely possible that the bears might take over as they did in 2018. However, there are several things that are different this time. For example, this rally feels a lot more genuine than the one in 2017, which is now believed to have happened due to price manipulation.
In addition, there is massive institutional demand for Bitcoin now, while the supply is rather low, which has been driving the coin’s price up. The rising prices also continue to raise awareness and drive adoption as a result, so chances are that 2021 will be a bullish year for the crypto industry.
Read more: Silver price analysis in January 2021: buy the recent weakness?
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