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Despite the ups and downs of the past two years, cryptos, with Bitcoin at the forefront, continue to attract new investors. Obviously, it can be difficult for a novice in the industry to know which crypto currencies to invest in and how to recognize the opportunity. That’s why today we’re going to show you the top 5 crypto currencies to invest in by 2020.
How to invest and earn with crypto currencies
When the first crypto currency in history (Bitcoin) was created, nobody would believe that a digital currency could become one of the best options for investing.
In fact, since 2013, the crypt coin market has experienced a huge growth and, at the same time, the birth of new crypt coins (today there are more than 5,000).
As you probably remember, 2017 was the year Bitcoin peaked, and crypto currencies in general registered a 4,000% market capitalization growth (reaching around $21 billion in March 2017). Today they exceed $300 billion.
So, Bitcoin isn’t the only option for those who want a profit opportunity.
On the horizon there are new and interesting crypto currencies such as Ethereum, Ripple, Litecoin capable of guaranteeing a fast ROI in the long term, proving to be a good alternative to Bitcoin and which, as we’ll see later, could be among the 5 crypto currencies to invest in by 2020.
Factors to consider when choosing a crypt-currency to invest in 2020
When you decide to invest in the digital currency market, it is important to consider a series of factors and indicators that will help you identify the crypto currencies to choose for the purpose of an investment.
In fact, evaluating them only for the current rate would not be convenient since it is an unreliable and very volatile index that could change suddenly from one week to another.
That is why we recommend you to consider other factors that will help you identify the 5 cryptos to invest in today.
- Currency supply and market capitalization: First evaluate the total currency supply and market capitalization of the project. Market capitalization refers to the value of all digital coins issued from a specific crypto. A high degree of market capitalization corresponds to a large volume of cryptos involved in active transactions, which means increased investor interest.
- Level of liquidity: the higher the level of liquidity, the faster a krypton currency can be sold at the market price. For example, the most popular cryptocurrencies, such as Ethereum, Bitcoin and Ripple, have a high liquidity rate. This indicator shows the actual demand in certain cryptos among traders.
- Project strategy: Another very important factor when choosing a crypto currency to invest in is to evaluate the reliability of the currency. Evaluating the team involved in the project and the strategies they rely on to carry out their mission will help you avoid unpleasant surprises.
- The pricing record: it goes without saying, however, if you wish to invest in a specific crypto, it is essential that you consult the currency’s pricing history. Knowing why the price of a currency rises or falls helps to measure its long-term value in the market. Price history tells the story behind the currency. The value of the currency also represents its connection to the movements and prices of other currencies. For example, you’ll notice that every time the price of Bitcoin goes up, there’s a relative decrease in the price of altcoins. This could be due to the fact that, being the leading crypto currency, mainly Bitcoin is used to trade with other altcoins. As the purchase of Bitcoin increases, the sale of other currencies increases, leading to an increase in the value of Bitcoin and a decrease in the value of other altcoins.
- Security Token or Utility Token: Another very important factor we invite you to consider, before investing in active crypto, is the functionality of the currency. Investigate and find out if the crypto in question is a security or utility token, knowing that in principle it is always better to invest in security tokens, as they offer you the opportunity to contribute to the decisions made in the company and play an active role in the project.
- Beware of fraud: The value of crypto-currencies continues to fluctuate due to their volatile nature, caused by exaggerations, speculation and Pump and Dump schemes.
In particular, crypto-currencies with a low market capitalization use tactics such as showing the value of the counterfeit currency or making false promises to investors to sell their shares at a higher price.
So, if you plan to invest in crypto currencies, these are some of the things you should consider to avoid losses.
Investing in Bitcoin (BTC)
As you know, Bitcoin (₿), created in 2009, is the first digital currency in history. It’s a decentralized peer-to-peer network, used and distributed in a totally electronic way, without the need of intermediaries and free from the control of individuals or institutions. Its quantity is limited and it is not possible to create more than 21 million.
Since its inception, more and more people use bitcoin to invest or maintain a balanced investment portfolio.
So why should you invest in Bitcoin in 2020?
- It’s a unique financial instrument that changed the world forever and marked the beginning of the digitalization of the economy. Bitcoin is much more than a protocol. Rather, it represents a fundamental change in global monetary policy.
- The value of Bitcoin comes from a wide spectrum of large and diverse markets. According to some experts, Bitcoin could become the currency of choice for some of the most unstable nations affected by hyperinflation.
- Bitcoins can be sent securely through a global transaction network, at low cost and without the mediation of third parties. More than 100,000 merchants worldwide now accept bitcoins, and the number of active wallet addresses on the Bitcoin network continues to grow, a sign of a vibrant and growing financial ecosystem.
- Bitcoin has historically behaved as an unrelated asset, which means it doesn’t necessarily move with the stock or bond markets. As a result, Bitcoin can help investors create even more diversified portfolios with higher returns.
- It offers higher returns than any other asset: Although many investors see Bitcoin as a speculative investment, in recent years this crypto-currency has been growing in popularity and has begun to outperform all normal investment markets. Unlike the stock market, it provides more significant returns. This is due to the volatility of the currency that allows investors to obtain greater benefits in trading and other investment activities.
- It provides easy access to investors: although almost everyone around the world uses an internet connection, not everyone has easy access to the normal investment markets. Fortunately, Bitcoin is available to everyone.
- Maintains a high level of privacy: Bitcoin is a decentralized crypto-currency. It means that all transactions remain anonymous and private. So, thanks to blockchain, the technology behind bitcoin, investments are safe and secure.
Bitcoin Adoption Growth: Every day, more and more people around the world want to know how to use Bitcoin as a digital currency. In addition, more and more companies are accepting crypto-currencies as an alternative form of digital payment to credit cards. Thanks to the increased adoption rates, investing in Bitcoin can translate into substantial financial returns.
Investing in Ethereum
According to Coinmarketcap data, Ethereum appears to be the second most valuable cryptocurrency with a market capitalization of $39 billion at the time of writing.
ETH is a crypto currency designed for decentralized applications and the implementation of intelligent contracts, which are created and managed without fraud, interruption, control or interference from third parties. Ethereum is a decentralized system, completely independent and not subject to the authority of third parties.
This crypto-currency can be highly profitable and has assured its investors large profits to date.
Many investors may be a little discouraged by the volatility of Ethereum’s price movements. However, as we saw in the previous paragraph, volatility should not be the only factor when considering an investment in Krypton currencies.
The rapid increase in Ethereum’s value, along with the growing interest in the DeFi space that has increased the interest of large companies, shows us that investing in this crypto today is a good option.
Investing in Ripple (XRP)
Ripple is a digital payment and currency exchange protocol system that allows companies and banks to complete transactions and exchange currencies faster and cheaper than traditional systems.
Ripple has a wide range of benefits for those looking to invest in this crypto currency. Unlike other crypto currencies, it was planned primarily as an advanced asset to be used as a trading mechanism.
Also, unlike most other cryptomontages, XRP cannot be mined.
At this time, XRP is one of the largest digital currencies by market capitalization and is experiencing powerful use by financial institutions around the world.
Ripple is an official association that owns 62% of all existing XRP currencies and has earned the trust of numerous banks, which are increasing their investments in XRP.
Finally, one of the advantages of an investment in XRP is that it is a currency created to be the gateway to institutional money. So, when the world economic system moves to cryptography in the near future, hopefully this will only happen through solutions like Ripple.
This means that in the medium to long term, large amounts of institutional money will start to be invested through Ripple which, over the years, has proven the security and reliability of its technology.
Investing in LITECOIN (LTC)
Litecoin was one of the first crypto-currencies to enter the market, after bitcoin. As a result, it remains one of the largest currencies in the industry by market capitalization.
It is a very popular coin that can be found in almost all crypto exchanges and is one of the most accepted cryptos in the world.
One of the main attractions of Litecoin is its limited supply. In total, only 84 million Litecoins will be produced.
The developers have decided that since Litecoin processes transactions at 4 times the speed of Bitcoin, it would be prudent to provide the network with 4 times the tokens.
So, this fixed amount of currency indicates that inflation will not affect the overall value of the currency over time. The more time passes, the more value each Litecoin should have. As of today, there are already more than 65 million Litecoins in the market.
Today, Litecoin is still one of the top ten crypto-currencies in the world. The token currently has a market value of $45.94 with a market cap of $3,014,041,848.
Many believe that Litecoin, in the coming years, will continue to occupy the key niche of silver, after Bitcoin gold.
Investing in MONERO (XMR)
Monero is an open source crypto-currency focused on privacy, launched in April 2014.
Today, thanks to its security features, Monero is one of the favorite crypto-currencies of a large segment and is considered a great investment for the future.
Another feature that makes XMR an attractive investment option is that it is easy to mine. By making it easy to mine in your Blockchain, with limited power consumption, Monero certainly attracts more and more users to your network.
Although Dash and Zcash are its most serious competitors, these two crypto-currencies seem to be lagging behind technologically because they cannot offer their users completely untraceable transactions like Monero.
The world of crypto-currencies is constantly expanding. However, the vast majority of cryptos will not last long. This is because few digital coins are willing to find a solution to the real problems of the users.
One of them is Monero which, being a private, secure, fungible and untraceable crypto, could have a lasting impact in time. That’s why we believe that this crypto can be a great investment for the future.
Now that we have an overview of the benefits of the top 5 cryptocurrencies to invest in 2020, all you have to do is choose your favorite crypto-currencies and start reaping the rewards.