Finding the best cryptocurrency to invest in 2020 is not a walk in the park. Look – It has been ten years since Satoshi Nakamoto developed Bitcoin, which is undoubtedly the most popular cryptocurrency in the world.
However, despite its popularity, Bitcoin is not the only cryptocurrency available. Spinoffs, imitators, and innovators have emerged from different parts of the globe, and we now have over 7,000 digital currencies circulating in the market.
If you are an investor looking for the best crypto to invest now, you are probably confused and don’t know where to begin. You don’t have to worry!
In this article we look at some of the best cryptocurrencies available and why you need to invest in them. Read on!
Understanding today‘s Cryptocurrency Market
Before we look at the best cryptocurrencies to buy in 2020, it is important to understand the current cryptocurrency market. Previously known for their reputation as gems for money launderers and criminals, cryptocurrencies are today regarded as ‘the digital gold.’
They have come a long way in regards to popularity and digital investment. The cryptocurrency market size was $754 million in 2019 and is expected to rise to over $1.7 billion by 2027.
Even though digital currencies are lauded as valuable digital investments, they remain highly controversial. Some critics, including Warren Buffet and Paul Krugman, have called Bitcoin “mirage” and “evil.”
Others such as venture capitalist Marc Andreesen see digital currencies as the next big thing in the world of finance. Many quotas have touted it as a revolutionary technology that will challenge the economic, social, and political underpins of society.
Figure 1 – Market capitalization of cryptocurrencies in January 27, 2018 Credits: Mikael Häggström
The increasing popularity of cryptocurrencies is likely to drive the market growth in 2020 and beyond. Digital currencies are integrated with blockchain technology to offer decentralized, secure, reliable, transparent, and fast transactions.
This has enhanced their adoption, and they are now used as a recognized mode of payment across various industries, including media, education, banking, healthcare, and more.
How Has The Crypto Market Changed In 2020?
The crypto market has changed significantly in 2020. It was an atypical year, due to the COVID-19 pandemic and political instability in some of the major economies of the globe. Therefore it is no surprise people turned their attention to cryptocurrency and some changes happened.
Here are some of the most notable alterations.
More investing methods have come up
Several years ago, crypto investing meant buying coins and holding them. In 2020, this notion has changed completely. If you are looking for a cryptocurrency to invest in, there are a host of investment methods available, including futures trading and CFD investing.
Futures trading allows users to purchase crypto assets in the future at prices already agreed upon. On the other hand, CFD allows users to buy and sell cryptocurrencies and is active around the clock.
Stablecoins have come up
Institutions are now, more than ever, interested in stablecoins. This has resulted in the emergence of Central Bank Digital Currencies (CBDCs).
Stablecoins have become the center-stage topics in the digital currency world and are poised to change the industry in the next few years.
Regulation is coming
Cryptocurrency is anonymous, secure, and free from government regulation. Most investors love these factors, and so do criminals.
To lend some level of oversight to the ever-growing popularity of cryptocurrency markets, governments in different parts of the world have started to enact regulations on cryptocurrency.
The real motive of these regulations is not clear, with some investors arguing that governments want to get their piece of the cryptocurrency pie and exert more control on the market. Some have lauded them as a good way to tame criminals. Regardless of how the regulation trend is viewed, it is something that has changed this industry in 2020.
Figure 2 – Crypto regulations by Country, infographic developed by VisualCapitalist
Best Cryptocurrencies to Invest In 2020
If you have plans to make a digital currency investment this year, here are some good news. Many crypto experts say that 2020 might be the best year to invest in digital currencies.
Though, with thousands of options available, choosing the best crypto to buy can be nerve-wrecking. Doing research and identifying worthy coins and invaluable ones can be time-consuming.
To help investors make the right choices, below are some of the best cryptocurrencies to invest in 2020:
Without a doubt, the list of the top cryptocurrencies in the market cannot be complete without mentioning Bitcoin. It is the most used digital currency in the world and is often referred to as “The king of cryptocurrencies.”
With a market cap of $199.62 Billion, Bitcoin is the largest cryptocurrency in the world. It is also huge in terms of desirability and name recognition. This currency works as a peer-to-peer virtual currency. By being decentralized, there is nobody or entity that regulates its transactions.
Instead, it operates under a majority rules principal. This means that transactions cannot be considered valid unless they are verified by at least 50% of the machines on the network.
Some of the benefits of using bitcoin include:
- It works through a decentralized peer-to-peer network. Even though critics argue this makes outside regulation impossible, it enhances the network’s security and makes it inherently self-sufficient.
- The absence of outside influence simply means that Bitcoin can function as it should without the influence of financial institutions.
- Many layers of validation are required for a new block, which makes forging information incredibly virtually impossible.
- It has greater liquidity compared to other cryptocurrencies.
- Enjoys wide acceptance as a payment method. There are many ways to spend Bitcoin; hence it is one of the most useful cryptocurrencies today.
Ethereum is definitely the best crypto to buy now. It is the second most valuable digital currency with a market cap of $30.5 billion. It is made for the deployment of smart contracts and decentralized applications that are created without any control, interruption, fraud, or interference from a third party.
Just like Bitcoin, Ethereum is a decentralized system and is independent of any outside authority. However, instead of decentralizing money, the Ethereum platform decentralizes the internet by replacing regular servers with worldwide node systems.
It is based on blockchain technology, which enables users to exchange digital currency called Ether. Speculating with this digital currency can be insanely profitable and has a proven history of giving investors high returns.
One of the factors that should influence your decision to invest in Ethereum is Ethereum 2.0, which focuses on energy efficiency and staking instead of mining. This results in more profitability.
Another reason why Ethereum is the best cryptocurrency to invest in is because of its widespread use. It has been embraced in different parts of the world as a reliable online payment method.
Even though EOS is a digital currency you cannot buy anything with, it is also one of the best crypto to invest in 2020. It is specially designed for those looking for a powerful platform to create decentralized applications.
The software behind EOS is known as EOS.IO. It is programmable – and doesn’t require developers to have servers when building apps on the platform. This means that when you invest in it, you have a full platform where you can create, deploy, and run your decentralized applications.
As a developer, EOS provides a wonderful platform for building blockchain-based, decentralized applications. The EOS platform is easy to use.
It comes with features such as password recovery systems, humanly comprehensible addresses, and zero transaction fees. All these, together with its high speeds, makes it a great investment for experts and beginners alike.
Ripple is another cryptocurrency that is making waves in the blockchain world. It has been in existence since 2012 and is one of the oldest digital currencies on the market.
Despite its age, Ripple has not seen the ‘ballooned value’ of other hyped cryptocurrencies, which means it is less likely to experience a bubble burst. This makes it one of the best cryptocurrency to buy right now for all investors.
One of the biggest flaws of major cryptocurrencies is that they use an algorithm known as proof-of-work. This algorithm makes it challenging to execute a transaction process.
Ripple doesn’t rely on it. Instead, it uses consensus ledgers to perform transactions. This means fewer design problems, less work for processors, and a steady transaction time.
It is owned by Ripple Labs and functions on a platform that is both centralized and decentralized. Major Cryptocurrencies like Bitcoin are fully centralized, which makes them great! However, if they suffer a major attack, they can be destroyed completely, and investors could lose billions of dollars.
Ripple has a centralized group that focuses on maintaining its value and enhancing its success. This kind of backing is essential for those looking to invest their money in the crypto world.
It’s worth noting that Ripple is not just a digital currency. It is also a transaction protocol that streamlines the transfer of cash between institutions.
Various banks all over the world have started using Ripple technology as a money transfer and payment method between them. With real-world applications, Ripple is a valuable digital asset to invest in.
NEO is a Chinese cryptocurrency that has taken the market by storm. It has a complementary token known as GAS, which helps in the execution of transactions and contracts. Over the past few years, NEO has gained massive popularity in different parts of the world and is now used as a base coin for an array of exchanges.
NEO transactions are fast and relatively cheap. Transactions take about 24 seconds to be completed, which is great compared to 1-2 hours taken by major cryptocurrencies such as Bitcoin. Additionally, NEO can handle higher transaction volumes than Ethereum and Bitcoin.
It processes transactions faster because it relies on the Delegated Byzantine Fault Tolerance (DBFT), which is perfect for financial transactions.
They are gaining traction with investors, and you shouldn’t be left out. It runs on a decentralized platform, which offers stability, reliability, and security.
NEO’S robust infrastructure appeals to both investors and developers. This is why it has attracted an insane number of partners in China and beyond. You should consider investing in it because it offers you a chance to balance and expand your crypto portfolio. Other benefits of NEO include:
- It is regulated by the laws of China. It is, therefore, an unlikely haven for money launderers and other criminals.
- Boasts a large cryptocurrency community that shares insights, knowledge and helps one another.
- Runs on a system that is simple, user-friendly, and trustworthy.
- Enables instant execution of trades; therefore locking in prices.
- Enhances speedy execution of transactions.
When investing in cryptocurrency, it is important to note that there doesn’t exist a one-size-fits-all approach.
The investment approaches that work for one person might not necessarily work for another. As an investor, your ultimate goal should be to find the best strategy that you can stick to in the long run.
Some of the best investment strategies in the crypto ecosystem include:
Long-Term Crypto Investment
In this strategy, investors hold crypto for a long time without cashing it out. It is often used by newbies in crypto investment since it is straightforward and easy to execute.
Even though it is a great investment strategy, it takes a lot of time. It does result in profitability under specific conditions – especially when the market is going up.
Using this method is simple. Just invest in any cryptocurrency outlined above and hold it until it appreciates in value.
Short-Term Crypto Investment
Short-term crypto investment is made over short time periods with the aim of making quick profits. This crypto investment strategy can take seconds, minutes, days, weeks, or a few months.
When choosing this investment strategy, investors need to define what they want to achieve. They need to find out what are the best cryptocurrency to invest in that moment so that they can make profits.
It is highly recommended that you only make short-term investments for newer cryptocurrencies such as EOS and NEO. The main advantage of short-term investments is that profit might be almost immediate, although it might not bring so much revenue as long-term investments.
As you choose the best cryptocurrency to invest in, you need to remember that cryptocurrencies don’t always bring profits. Just like any other investment, you could lose money in the process. As a rule of the thumb, only invest what you are ready to lose.
Read this article again, choose the best cry1ptocurrency to invest in, and pick the right investment strategy you believe will yield optimal results.
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