The cryptocurrency market has been raging lately, where multiple coins are providing multi-year FD (Fixed Deposits) returns in hours. Looking at the rally, it might seem that you have missed the bus. But hold on, maybe there are cryptocurrencies that could still provide some massive returns. Let’s find out those crypto assets.
Brief about Cryptocurrencies
Cryptocurrencies are digital currencies more like the Dollar or Rupee. These currencies can be adopted for numerous tasks like store of value, medium of exchange, mode of trading, etc. There are thousands of cryptocurrencies out there but it started with Bitcoin in 2009. An unknown individual or a group of individuals named Satoshi Nakamoto created Bitcoin right after the global financial crisis of 2008.
The primary purpose of cryptocurrencies was to enjoy a separate financial system that would not rely on the traditional banking system. Bitcoin and other cryptocurrencies work on Blockchain technology that is a type of decentralized network. Any individual can access the blockchain network with the help of an internet connection. But no one can change or edit data that’s already on the network. This makes the technology extremely safe and secure.
Reason for Cryptocurrencies to increase in value
The whole concept of cryptocurrencies is in its adoption phase therefore there are many ifs and buts in the equation. The technology is merely a decade old and has already gathered many real-life use cases. Multiple entities are already implementing the blockchain network and integrating this technology with their businesses.
The fundamental reason behind the rise in the price of cryptocurrencies is the theory of demand and supply. Let’s consider the example of the largest cryptocurrency, Bitcoin. There is only a total of 21 million Bitcoin can be mined and more than 83% has already been mined. This rarity makes it so valuable.
Cryptocurrencies that have massive upside potential
Here is a list of the top 3 cryptocurrencies that have huge upside potential moving forward.
Ethereum is the second-largest cryptocurrency after Bitcoin in terms of market cap. Ethereum was released on 30 July 2015, by Vitalik Buterin. Unlike Bitcoin, Ethereum works on a unique mechanism known as the Proof of Stake. Ethereum is also faster than Bitcoin when compared in terms of transaction speeds. This makes the coin even more usable. van escort
The use case of Ethereum is higher as it is used in the NFT (Non-Fungible Token) space. Apart from this, Ethereum had received an update to its network in August called London upgrade. After this, the supply of the token has been gradually decreasing which has caused an increase in price. The rise in the trend of NFTs is another factor that will lead to another rally in the crypto coin. The coin has already rallied over 21% in October and has provided a gain of over 395% since the beginning of 2021.
Cardano is a relatively new coin that was founded in 2017 by Ethereum co-founder Charles Hoskinson. Cardano enjoys an edge over Ethereum as it is more energy-efficient. This means it requires less computing hardware. It works on a ‘proof of work’ mechanism and facilitates smart contracts like Ethereum. It is also termed the ‘Ethereum killer’ as it contains all the necessary features of ETH and is also is better than it in certain ways. The coin has provided a staggering return of more than 1077% since the beginning of the year, beating Ethereum by a considerable margin. As the coin is new, the scalability and adoption potential is extremely high.
Bitcoin doesn’t require a separate introduction as it is the most popular and largest coin out there. If cryptocurrencies succeed as a concept, Bitcoin will be one of the prime beneficiaries of the movement. Though Bitcoin has moved up significantly in the last decade it still has a lot of steam left. One of the factors that can cause it to explode is the fact that international adoption is increasing.
The US is in talks to come up with Bitcoin ETFs (Exchange Traded Fund) and Futures which will increase its demand multi-fold. Billion-dollar companies like Tesla, Space X, and institutional investors are investing and accepting Bitcoin.
This should be extremely bullish for Bitcoin in the near future. The Year till Date return in Bitcoin is comparatively low at 114% but it has delivered more than 51% in the last month. Moving forwards Bitcoin remains the most reliable and strongest contender in the digital currency space. Hence, every category of investors can bet on Bitcoin.
Other honorable mentions
Apart from the above 3 cryptocurrencies, there are some more coins like Ripple (XRP), Litecoin (LTC) which can eventually explode in the near future. All the mentioned coins have real-world usage which makes them so valuable. Apart from these, there are some coins like Dogecoin and Shiba Inu, which are highly speculative and risky. These can be an option for extreme risk-taking investors or traders. Dogecoin has returned a whopping 4680% in the current year. These coins are sentiment-driven hence can be only looked at highly speculative investments.
Serious investors can take minimal exposure in such high-risk crypto investments just for the returns. Remaining investors can stick to the top 5 cryptocurrencies for safety as well as diversification.