New cryptocurrencies to invest in 2021: jump into the market 4 different ways
Digital currencies had their last serious price crash in March 2020 in the initial response to the Covid-19 pandemic. Back then, the global stock markets plummeted, banks started printing fiat money to support the economies (causing the fear of inflation), and people started moving their cash, investing into assets such as gold and cryptocurrencies, that they felt would hold value. But while cryptos did see a price drop, they started recovering within days, unlike the stock market that needed months to start an upturn.
Crypto prices started rising and they have since reached new all time highs. There were, of course, a few rough patches along the way – such as running into strong resistances and trading sideways for months, as well as an occasional correction or two – but the market has mainly been extremely bullish. In the meantime, the DeFi sector has exploded.
With an abundance of new projects coming, and digital currencies enjoying growing prices, investors are now wondering: what new crypto coins to invest in 2021?
The crypto sector in 2021: everything you need to know
The search for new crypto to invest in has really picked up in 2021. It began last year but exploded as soon as January started. The DeFi sector has reached a total value locked of nearly $45bn, the Bitcoin price nearly climbed to $60,000 per coin – although it didn’t quite manage to hit that price (yet) – and Ethereum saw a massive price surge that took it past $2,000 per coin.
The final week of February brought a correction. And it has been a strong one indeed. However, there are many who believe that this is just a temporary setback, and that the price surges will return soon. Various Bitcoin price predictions certainly only see the coin continuing to go up to new levels, with some experts mentioning $100,000, or even $200,000 per coin.
Today, we are not looking at the giants BTC and ETH, but rather at some newer, smaller coins that have already proven to be good investments.
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New cryptocurrencies to invest in 2021: four ways to get into the booming market
Polkadot (DOT)
When it comes to some of the best new cryptocurrencies, we simply cannot overlook Polkadot. The coin has been around for a few years, but it only launched the genesis block of its Relay Chain in May 2020. Since then, the coin took quite a long time to see any major price movement, but things seem to have changed this year. On February 20, 2021, the DOT price skyrocketed to hit a new all-time high at $42.06, gaining more than 350 per cent year-to-date.
At the time of writing, March 1, the coin traded at $34.60, making it the sixth largest coin in the industry with a market cap of $31.62bn. As such, if you are looking for the best new cryptocurrency to invest in, then Polkadot is definitely worth checking out.
Uniswap (UNI)
UNI is a native cryptocurrency of one of the world’s largest decentralised crypto exchanges, Uniswap. Uniswap has been around for quite some time, but similarly to many other DeFi projects, it only became big with the DeFi sector’s explosion that started in June 2020. These days, UNI is one of the best new altcoins to invest in, purely because Uniswap became the best DEX to use.
It allowed new projects to list their coins free of charge, thus providing users with an abundance of new investment opportunities. It has proven that it is reliable, fast, easy to use, with excellent liquidity and the ability for liquidity providers to earn rewards in exchange for helping the platform out. It did not take Uniswap long to explode, and UNI currently sits as the 13th-largest crypto by market cap, which makes it the largest DeFi project in the broader crypto industry.
Compound (COMP)
Speaking of leading DeFi coins, Compound is the third-largest project in the DeFi sector, and it is a decentralised lending protocol, which has seen quite a bit of popularity. Its rank in a wider crypto industry is not as good as of yet, since its token, COMP, currently occupies 46th place on the list of largest cryptocurrencies, with a market cap of $1.9bn.
As mentioned, Compound is a DeFi lending protocol that allows users to earn interest on their coins, by depositing them into pools supported by the platform. After depositing funds, users receive cTokens which represent their stake in the pool. The cTokens can be used to redeem the deposited coins. In the meantime, this is also a good way to make some cash, as lenders also receive interest after lending their money to others.
Launched in June 2020, Compound is also a young project. The COMP price enjoyed a massive rally in February, which took it to its current all-time high at $566 on February 12. The price has since dropped lower, but COMP is still one of the best choices for those looking to invest in new cryptocurrency.
Cardano (ADA)
While ADA is not exactly a new coin, what is new is the fact that it now sits at the third place on the list of largest cryptocurrencies by market cap. ADA has skyrocketed recently, after its blockchain received several upgrades in only a few months. The upgrades finally brought the smart contract functionality to the project, making it the best new crypto to buy in 2021.
With support for smart contracts, ADA is finally capable of rivaling Ethereum with a much more scalable and powerful network. Its coin is also around its former all-time high levels, with the potential to hit a new record in days to come. Cardano has seen a 29 per cent price increase in the last 24 hours alone, and its current market cap sits at $40.5bn at the time of writing, on March 1.
While this is still miles below Ethereum’s market cap, currently at $172.8bn, Cardano’s growth is likely only starting, and there is no way to tell when it might end.
Where to next for the crypto sector?
With the prices skyrocketing, everyone is wondering what is next for the crypto sector. The truth is that no one can know that, as anything can happen to affect the prices positively or negatively – at any time. However, investors and traders seem as optimistic as ever.
Institutional investors’ interest in the crypto sector currently still only focuses on Bitcoin, but at least institutions are finally engaging with the crypto industry. Ethereum’s future is looking good as well, with Ethereum 2.0 upgrade underway. Cardano is expanding its possibilities, so it stands a fair chance of continuing its surge, and the DeFi sector continues to grow with every passing day, so there is a lot to look forward to.
For now, the future of crypto seems rather bullish, although it still pays to be vigilant and keep an eye on the trends and changes, as the industry remains as volatile and as risky as it has ever been.
The crypto industry is rich with coins with massive potential, and the ones listed above are only a few of them. There are opportunities to be found everywhere if you care to look, so give these tokens a thought, and maybe consider them for your next purchase.
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