The Top 8 Altcoins Preferred by Investors in 2021

Despite Bitcoin’s popularity, there are thousands of other cryptocurrencies out there. With the increasing popularity of altcoins like Ethereum and Dogecoin, we’ve written a guide to the top altcoins for investors.

Most people think of Bitcoin when they hear the word “cryptocurrency.” Of course, this makes perfect sense because Bitcoin was the very first cryptocurrency and continues to be the most popular one. However, there are other cryptocurrencies out there too, called alternative coins, or altcoins. There are over 9,000 of them and counting and they make up over 40% of the entire cryptocurrency market. And while there are thousands of them, there is a select group that investors are particularly interested in.

Let’s take a closer look at the top eight alternative coins to consider, including what they are and what their unique appeal is.

Top 8 Altcoins Preferred by Investors in 2021The top 8 altcoins for investors

The main reason why investors may prefer certain altcoins over Bitcoin are because they are generally perceived to offer higher potential returns and because they believe in the purpose, goal, or vision behind the altcoin. Due to the lower total market cap for altcoins compared to Bitcoin, they are much more susceptible to large price movements. Altcoin investors may see this volatility as a potential upside to buy and selling altcoins.

1. Ethereum

What is it?

Ethereum is the most well-known crypto asset after bitcoin, and has a market cap of over USD270 billion. Ethereum itself is not a cryptocurrency but rather a decentralized, open software platform. Ether, or ETH, is the cryptocurrency of the Ethereum network. While it shares many things in common with bitcoin, it has important differences.

What’s unique about it?

Like Bitcoin, Ethereum maintains a decentralized payments network, but in addition it allows for the storage of computer code for decentralized contracts and apps (dapps). Developers can use Ethereum’s own unique programming language to build blockchain-based apps on it.

2. Ripple

What is it?

Ripple is the company behind XRP, a cryptocurrency and open-source developer platform that facilitates global payment settlement, currency exchange, and remittance. The company’s customers are predominantly financial and payment institutions like banks. As of mid-April 2021, its market cap is over USD33 billion.

What’s unique about it?

Ripple essentially enables fast, inexpensive financial transactions in a secure way. For cross-border transactions, it can provide instant settlement. Developers can also use the XRP ledger to make potentially innovative payment technologies.

3. Litecoin

What is it?

Litecoin is a peer-to-peer cryptocurrency that uses open-source software. It was launched 2011, has a market capitalization of over USD11 billion and has built a reputation as a leading Bitcoin alternative. Litecoin can be transferred between individuals or businesses without the need for an intermediary, like a bank.

What’s unique about it?

Litecoin is technically almost identical to Bitcoin. The main differences are its transaction speed, 2.5 minutes versus Bitcoin’s 10 and that it’s supply is capped at 84 million, compared to 21 million for Bitcoin. However, these differences are not significant differentiators to influentially impact Litecoin’s price. However, it has proven to be a popular alternative to Bitcoin and a direct competitor.

4. Bitcoin Cash

What is it?

While it includes “bitcoin” in its name, it is actually an altcoin, or Bitcoin “fork” – forking occurs when there is a distributed network software update. Created in 2017, Bitcoin cash has a market cap of about USD10 billion. It was created by bitcoin miners who had doubts over Bitcoin’s future ability to scale effectively.

What’s unique about it?

Bitcoin Cash can process transactions faster than the bitcoin network because, unlike bitcoin, it has an increased block size of 8 MB. Transaction fees tend to be lower too and wait times shorter. Bitcoin Cash can process more transactions concurrently than the bitcoin network.

5. Cardano

What is it?

Cardano is a proof-of-stake blockchain platform, cryptocurrency network and open-source project that enables developers to build smart contracts and create decentralized apps and protocols. ADA is Cardano’s native token, named after Ada Lovelace, the 19th-century mathematician credited with being the world’s first computer programmer. It currently has a market cap of over USD40 billion.

What’s unique about it?

Cardano claims to be the “most environmentally sustainable blockchain protocol.” It achieves this through it’s proof-of-stake concept, which reduces energy consumption and vastly decreases transaction time compared to bitcoin and older cryptocurrencies. It can process 257 transactions per second, compared to bitcoin’s five.

6. Stellar

What is it?

Stellar is a cryptocurrency developed by Stellar Development Foundation with a market cap of USD6 billion. It is an open-source technology founded by Ripple co-founder Jed McCaleb and provides another interesting option for investors looking to diversify away from bitcoin into other crypto assets. Like Ripple, it provides cross-border transfer services for financial institutions.

What’s unique about it?

Stellar is an open-source payment technology platform, and its target markets are financial institutions in developing countries. In addition to money transfers, Stellar can also act as a distribution channel to provide other financial services, such as lending products, to the underbanked and unbanked in developing countries.

7. Dogecoin

What is it?

Dogecoin is a cryptocurrency like bitcoin. It was originally invented as a joke by two engineers, Billy Markus and Jackson Palmer. For instance, it features the face of the Shiba Inu dog from the “doge” meme, but it has steadily grown in prominence and value, and is taken seriously as a viable altcoin. Its underlying vision is to act as a payment system that is fast, secure, transparent, and offers low fees, while disintermediating the traditional bank “middleman”. Its market cap currently hovers around USD27 billion.

What’s unique about it?

Dogecoin has an unlimited number of coins that can be mined. It also does away with SHA-256 mechanism that bitcoin uses which simplified the mining process for new coins. It recently made headlines because Elon Musk tweeted several times, leading to jumps in its price.

8. Chainlink

What is it?

Chainlink is a decentralized node network that provides a secure means to transfer smart contracts and data across the blockchain. It has a market cap of over USD8 billion.

What’s unique about it?

Before Chainlink, getting information in and out of the blockchain without the risk of it being manipulated represented a massive vulnerability. Chainlink claims to solve this issue, making it possible to develop smart contract programming while respecting the decentralized nature of the blockchain. It is potentially very significant because it eliminates or greatly mitigates the possibility of fraud or data manipulation when it enters or leaves the blockchain.

Investing in the top altcoins to Bitcoin in 2021

Bitcoin is the undisputed leading cryptocurrency, with over 50% of the total market share. However, for crypto investors interested in diversifying into alternative crypto assets, there are many outstanding options to consider. It is worth keeping in mind that altcoins may rise and fall in line with Bitcoin, although many altcoin investors gravitate towards them because they believe in the underlying vision behind the crypto asset or simply because they see higher upside potential. To start investing sign up with Coinberry today.