The best cryptocurrency to invest in: 3 coins for the summer
11:57, 2 June 2021
Between 19 May and 1 June, the cryptocurrency market’s capitalisation dropped from $2.5trn to $1.6trn, with the price of bitcoin (BTC) touching $30,000, at one point. This deep correction offers a rare chance to buy digital coins at discounted prices. But what cryptocurrency to invest in this summer?
In this article, we review the industry's latest news and trends, and take a look at the three top-performing altcoins worth further research.
Is the worst crypto crash of the year over?
To many small crypto investors, the May crash came as a shock – a panicked sell-off triggered first by Elon Musk tweeting that Tesla won’t accept BTC, and then a fresh crypto crackdown in China.
However, analysts had predicted the crash long before it happened. It was probably a planned and orchestrated event. The market is dominated by whales and institutional buyers, who have the power to manipulate the prices to maximise their gains.
Radical price swings like those we’ve witnessed since 19 May are hardly accidental. Large investors used the opportunity to stock up on cheap crypto, and, with some luck, soon they will allow the bull trend to continue.
Meanwhile, almost all crypto assets are trading at a heavy discount. So, what is the best cryptocurrency to invest in right now? As always, bitcoin remains the top investment, and if you’re looking to increase your BTC holdings, now could be the right time as the coin is trading well below its recent record highs.
Altcoins aren’t dead, and may perform better than BTC in the near future. We’ve selected three cryptocurrencies that have yielded better gains than the ‘king of crypto’, even at the depth of the correction.
The best cryptocurrency to invest in: 3 altcoins to watch in summer 2021
Cardano (ADA)
How has ADA performed so far this year?
Throughout the market’s dramatic correction, ADA has shown impressive tenaciousness, falling less than BTC on the downward legs and recovering more on each bounce. The side-by-side BTC and ADA charts say it all:
ADA even managed to claim fourth spot on the list of largest cryptocurrencies by market capitalisation, moving ahead of binance coin (BNB).
What will fuel ADA’s growth in summer 2021?
The key technological update that everyone is waiting for is the introduction of smart contracts. It should be rolled out during the Alonzo hard fork, scheduled for August. With smart contracts, Cardano can start to evolve into a blockchain ecosystem similar to Polkadot, Binance Smart Chain, or Ethereum. It will be able to host decentralised exchanges, DeFi lending and staking apps, NFT marketplaces, oracles, and more.
Founder Charles Hoskinson seems intent on making this happen – over 1,000 developers are already enrolled in the Plutus Pioneer program, learning to write smart contracts for Cardano in the Haskell language.
According to Hoskinson, the built-in startup accelerator will fund up to 200 projects in the coming months. This means a lot of media presence for Cardano and a surge of interest in its native coin. A good indicator of what might be in store for ADA is the 11% jump on 30 May, following the launch of the Alonzo testnet.
If you’re looking for coins with strong technological fundamentals, ADA may be among the best crypto to invest in now.
Polkadot (DOT)
How has DOT performed so far?
DOT dropped 70% between 15 May and 23 May, although it retained its top ten position. Institutional investors didn’t lose interest in the Polkadot ecosystem – DOT-based investment products attracted $5.5m in fresh funds during the first week of the correction, second only to ADA ($10m).
What can push DOT higher this summer?
Polkadot is often called ‘the internet of blockchains’, meaning that it can host hundreds of independent blockchains able to interact with each other. Some even say that with its scalability and near-free transactions, Polkadot will become the ‘Ethereum killer’.
The first step towards building the internet of blockchains is launching parachains, the Polkadot name for individual blockchains. They will be allocated to project teams through a system of auctions. On 19 May, parachain auctions were ready to go live on Kusama, the canary (i.e. experimental) network for Polkadot.
Another potential growth booster is the introduction of new institutional investment instruments. In February, Swiss asset management firm 21Shares introduced exchange-traded products (ETPs) for DOT (ETP) on the Swiss Stock Exchange (SIX), Europe’s third-largest stock trading platform. In May, a similar product was launched by another Swiss firm, Valour, this time on the Nordic Growth Market. These ETPs will both stimulate institutional capital inflows into DOT and foster media exposure.
Polygon (MATIC)
How has MATIC performed so far?
The native coin MATIC of the blockchain scalability platform Polygon, rebranded from Matic in February 2021, has been one of the most outstanding performers of 2021, gaining over 1,500%. A collapse from an all-time high of $2 to $0.87 was followed by a swift recovery in which it briefly touched $2 again. The coin entered the list of the 15 largest cryptocurrencies by market cap, positioned well above older and better-known peers, like ethereum classic (ETC), stellar (XLM) and EOS.
The three key MATIC price boosters
As of 1 June, MATIC remains oversold, so there is a lot of upside potential for this India-based startup. We can identify three factors that might push the price above $2 in the coming months:
Development updates. Polygon has been very active lately, announcing a bridge to the Ren protocol (to transfer assets like BTC and DOGE to Polygon) and then an integration into Google’s serverless data warehouse Big Query. Updates like these may seem too technical to a casual crypto user, but they are a sign of Polygon’s long-term fundamental value (as opposed to speculative value).
Mark Cuban’s backing. Billionaire Mark Cuban has not only added MATIC to his portfolio but even admitted that he is a Polygon user himself. The news sent the coin’s price flying 40% higher on 27 May. More importantly for the future, Cuban’s example may attract other institutional investors, while the money he invested will speed up the development.
Scarce supply. Polygon releases batches of tokens on the market on a monthly basis, and recently they have been in short supply. As long as the MATIC release rate remains the same, the scarcity trend might continue, pushing the price higher.
Supply of @0xPolygon tokens on exchanges is at an all time low.
— Mihailo Bjelic (@MihailoBjelic) May 24, 2021
This is *very* rare (most crypto projects' tokens just sit idle on CEXs).
Happy to see our token being actually used, adding value to the Polygon ecosystem! :hugging_face::unicorn_face::dizzy: pic.twitter.com/kp1U1XxQFz
Thanks to its technological potential, powerful backers and the scarcity factor, MATIC deserves a spot on the list of the top 3 cryptocurrencies to invest in this summer, even though it’s not as widely known as ADA or DOT.
What to expect from crypto investments in summer 2021
For weeks, the whales feasted on cheap crypto, loading up their bags with bitcoin, ether (ETH) and other digital coins. After this massive accumulation stage, everyone is waiting for distribution when institutional buyers begin to push prices up to take profits, triggering a rally. The question is, when will the next distribution phase start?
The monthly bitcoin trend is still up, and many professional traders are treating the ongoing slump as a very deep, but inevitable, correction rather than the beginning of a bear market. Some are predicting a bull run in July, while others think we’ll need to wait until September or even November.
June will probably be a month of very choppy price action, with bitcoin trading between $33,000 and $42,000. A short-lived drop below $30,000 can’t be excluded, either.
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