While Bitcoin is still very much the most well known, and most widely regarded cryptocurrency around, it is only one in a list of near thousands of other digital coins and tokens. The cryptocurrency ecosystem has expanded to become a massive space, but an equally massive opportunity for traders.
Each of the other cryptocurrencies available in the ecosystem presents a new and exciting market for traders to be a part of. Bitcoin brought cryptocurrencies onto the map, but the projects that have come after it are arguably more exciting to traders as they are newer, less established, and thus more volatile.
Volatility is often seen as a dangerous thing in trading, but it is high risk and high reward, which has become the attractive feature of trading cryptocurrency.
While there are a lot of different options out there to trade, it is still recommended that trading some of the bigger, more established coins, is the best bet. They have better liquidity, infrastructure, and options in trading. This is also why Bitcoin, as the biggest by a long margin, remains the best cryptocurrency to invest in.
In this article, we will look over the top five cryptocurrencies that offer good trading opportunities and stability in a nascent space.
There is no getting away from Bitcoin when it comes to trading top cryptocurrencies. The coin has the longest history, is the most well established, has the greatest liquidity and popularity, and remains the most decentralised and pure example of a value-gaining digital asset.
Bitcoin was the original cryptocurrency, and arguably the best cryptocurrency. It can be thanked for the entire ecosystem breaking into the mainstream. Bitcoin’s mainstream adoption came from its growth in value over 10 years, and its rapid growth in 2017. But its recent growth for traders, institutional and crypto, has come because of its volatility.
Bitcoin was created to be a currency, or a digital cash system, but its evolution has taken it towards being a digital asset, and has long been called ‘Digital Gold.’ This comparison is quite apt as it ticks a lot of boxes that gold does — including scarcity and the ability to be anti-correlated to stocks and traditional markets.
More so, Bitcoin’s forecast for the next few years is extremely positive as a lot of people feel the coin is undervalued at its current price level under $10,000. Based on its growing adoption and lowering deflation and scarcity, there are arguments that the coin will reach as high as $1 million in the next five to 10 years.
In fact, Mike Novogratz, a former hedge fund manager and Bitcoin bull, thinks Bitcoin will “easily” surpass gold’s then market cap of $7.5 trillion within 10 years.
Ripple, or to be more correct, XRP as the token is known, is an interesting cryptocurrency to invest in as it is controlled by the company — Ripple. Ripple is a cryptocurrency company that has taken aim at banking and the future of finance with its blockchain platform and XRP token.
Ripple is looking to make mainstream partnerships with banks and financial institutions to assist in interbank transfers and to try and break down the walls of sending value across borders. Cryptocurrency has already shown to be global and borderless, but Ripple wants to assist banks in making this transaction.
When it comes to investing in XRP, there is a strong feeling that you are investing in the company Ripple and their work. However, this is not a bad thing as the cryptocurrency has remained in the top three or four of market caps across the ecosystem for a long time and it has seen many successes already.
Ripple recently linked up with MoneyGram to implicate their XRP token for use in remittance money sending, and it was reported that 10 percent of transactions between Mexico and the US using Ripple’s technology.
Ripple has been falling in value in the past 12 to 18 months, but it is not a sign of panic, rather a good opportunity to enter the market as the expectation is that in the next five years XRP could reach levels of around $5 per coin, as Ripple’s XRP development might support on further institutional adoption worldwide. Aside from partnerships in the United States, more deals in Europe and the Latam regions could boost the price evolution.
EOS is a popular coin that has honed in on the programmable blockchain side of things, following on from the pioneer that is Ethereum. EOS aims to give developers easy-to-use tools for developing DApps with a fast blockchain and robust smart contracts. It is one of the blockchain platforms looking to be very prevalent in the future.
EOS is one blockchain that has put itself forward to have many different features. It claims to have the security of Bitcoin, combined with the ease of programming found in Ethereum. On top of all of these claims, the platform possesses scalability that is said surpasses Ripple’s capabilities.
If EOS manages to reach its lofty goals it has a high chance of being a powerful blockchain emerging from the ecosystem into real-world application. If this does occur, it is likely the demand for the EOS token will skyrocket, and its price alongside.
Of course, there are a lot of ‘ifs’ involved there, and as such the price forecasts for this token vary significantly, but they are mostly positive. Factoring the total EOS supply, current prices, and the previous all-time high of $22.89, EOS has strong price potential and the future price outlook can only improve from here.
Even at current prices, which are near local lows, EOS has provided early investors with a 240% ROI. At the previous all-time high, EOS brought 4669% ROI for early investors who bought the ICO and then sold the top.
Litecoin is another cryptocurrency that has been around for quite some time, and was created when it became clear that Bitcoin was going to be more of a digital asset than a digital currency. Litecoin has been called the silver to Bitcoin’s gold, and is meant to be faster, cheaper, and more efficient to use for general transactions.
This seems to suggest that trading this coin will not be that successful, or that it won’t present the same opportunities as a coin designed to be an asset and traded with high volatility. But the benefit in Litecoin lies in its ability to be a useful coin in digital transaction as the world heads in that direction.
It is true that Bitcoin drove the idea of cryptocurrencies to be about a store of value, but there is a resurgence in the desire to use them as a means to transact. Litecoin has the feature that makes it good for transactions, such as high transfer per second, as well as the Lightning Network.
Litecoin has already shown good growth along its history and has managed to stay relevant and in the top 10 of the market cap ratings for pretty much its entire existence. The coin hovered at around $3 before crypto went mainstream, but showed up to $330 at its high. Since then the coin has fallen back down to the $50 mark, butits explosive rise is indicative of what it can do down the line.
If Bitcoin was the first generation of cryptocurrencies, Ethereum was certainly the second. This new blockchain brought with it huge features and capabilities for the technology which were never even part of Bitcoin’s design. More so, they showed that cryptocurrencies do not have to be entirely financial in nature — but this advancement has made Ethereum very viable and financially attractive.
Etherereum has been touted as the ‘world computer’ and this means it is a decentralised network that operates with smart contracts that can run as an entity without the need for intermentatories in a number of different sectors. The promise of Ethereum is massive, but its delivery thus far has been poor.
Ethereum is a blockchain that is still too slow and can get too expensive in transactions when things get busy on it, but that is being addressed and the next iteration of Ethereum — ETH 2.0, is on the horizon.
The new Ethereum will be faster and better suited to being the ‘World Computer’, and if this is a success, it will be far more usable and valuable as a technology, which should in turn make the token, ETH, also far more valuable.
Ethereum has always been one of the top cryptocurrencies because of its potential, and the interest in using it as a platform for a number of other cryptocurrency sectors — such as new coins and ICOs, as well as the emerging DeFi space.
The forecast for Ethereum is thus very good, even in the short term with the evolution to ETH 2.0. Alex Ohanian, Reddit co-founder is a known tech entrepreneur and is extremely bullish on Ethereum. He thinks that it’ll eventually reach prices of $1,500, he told Forbes in an interview about cryptocurrencies.
Ohanian explains that while he is bullish on Bitcoin and all crypto, he is “most bullish about Ethereum simply because people are actually building on it. It’s still early days, but you know, we’ve got a few CryptoKitties.”
Factors to consider when choosing a cryptocurrency for investing in 2020
As mentioned, a lot has changed in the cryptocurrency space since it first began, and the real change started happening as the mainstream interest took hold in 2017. Now, in 2020, there are still changes happening, and there are a lot of factors to consider when choosing a cryptocurrency to invest in
Factor #1 — Consider the Market
The cryptocurrency market as a whole is an exciting one, but also a risky one. Some coins offer incredible chances for traders and investors, but they do come with risks as well. It is well worth considering each coin’s market before investing.
By looking at the market, a trader or investor needs to look at the history of the coin’s price, and what the technical analysis suggested for the cryptocurrency price prediction going forward. A lot can be read in what has happened in the past as to what will happen in the future.
But, the market alone is not good enough to make a decision to jump right in because some cryptocurrency markets are very attractive and welcoming, but they can be traps and lead to pain down the line once the market hype is over.
Factor #2 — Consider the Project
The market will give you good insight into the chance of short term profits, but if you are looking for a longer investment, it is also worth looking at the project as a whole to see where there will be chances for medium to long term gains.
Successful projects at the start are dime a dozen in the cryptocurrency space, and this is pointed out by how many successful ICOs are now broken. But many ICO projects and platforms have been running for over three years now and continue to grow along their roadmap. These are the projects to choose to invest in.
By finding projects that have tangible evidence of success that is not just based on hype and speculation can lead to good opportunities for longer term gains. Projects that have managed to survive the 2018 bear market, and have made partnerships outside of the crypto space are good ones to look to for longer term investments.
Factor #3 — Consider the Future
Asis clear from the run down of the top five coins above, many of them are on the cusp of breaking out into mainstream adoption and use. If these coins can make a big splash in the future where blockchain and cryptocurrency is much more adopted, they will be good longer term investments.
This is why it is good to consider the future. Some cryptocurrency coins are looking to solve problems that are only getting bigger and will be issues in the future. If they are successful in that, they will be the ones that see rapid growth in the next three to five years.
Why and how to invest in cryptocurrency in 2020?
Investing in cryptocurrency in 2020 is very different than investing in 2017. Three years ago it was about making as much money as possible by speculating on a trend from a certain coin. In 2020 it is about backing a cryptocurrency that will have a place in the future.
But, investing in cryptocurrencies can be done in a number of ways and as it stands, the best way to invest is through trading as the market has been primed for traders. There are a number of new tools and platforms that cater to trading cryptocurrencies that are very similar, if not the same, as what traders use on Wall Street.
Trading cryptocurrencies has become so popular that Wall Street traders are entering the market to utilize the high volatility and the possibility for high profits. Buying and holding cryptocurrencies worked well a few years ago, but the market has moved beyond that in 2020.
Tips for profitable investing
Because the cryptocurrency market has become similar in many regards to the traditional markets, there are a number of tips that have crossed over and helped crypto traders be successful and profitable.
One of the most powerful tools is to use margin trading. Margin trading allows for traders to make money if the market is going both up, and down. In a volatile market this is really useful as even big drops can still mean profit for a trader if they get their shorts and longs right.
More so, there is the chance to leverage when trading on margin. Leverage means that the trader is able to use less capital in their trade, but still stake a bigger portion, depending on the multiplier of the margin.
There are many opportunities to invest in cryptocurrencies in 2020, but what has become clear this year is that it is worth looking to the best possible projects and coins. To that end, Bitcoin cannot be ignored as it is still the strongest and most robust crypto with trading.
More so, trading is certainly the answer when it comes to investing in cryptocurrencies, the market has grown to a position where traders are offered the best ways to make profits, including margin trading, shorting and the use of traditional strategies.