Bitcoin (BTC) is still the most reliable cryptocurrency for investment, most experts believe. They advise to invest either only in BTC or to distribute investments in such a way that bitcoin makes up at least 75% of your portfolio.
For those who want to compile an extended investment portfolio, we will analyze two more coins that have the greatest growth potential in 2021. We emphasize once again that most of the investments should be in BTC. But if you want to diversify your crypto portfolio, you gonna need an LTC to BTC converter and vise versa.
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Basic investment rules
Before deciding on what cryptocurrencies to buy, check out the main principles of successful investing.
- Crypto doesn’t have to be the only investment tool. The potential profitability is great, but keep in mind that your investments in cryptocurrency are not protected or insured by anyone. It is impossible to predict the price of digital coins in the future. Therefore, you should not invest all the money that you have, and in no way sell a property or take loans to buy cryptocurrency.
- The best way to invest in cryptocurrency is to buy it and keep it on a reliable exchange or in your own “cold” wallet. Don’t give money to other people who promise to “invest profitably” in Bitcoin. Most likely this will lead to a complete loss of all your funds.
- There are two types of cryptocurrency:
- universally recognized, established. They have a capitalization of several tens of millions of dollars, have existed for several years, and are traded on large exchanges. A several-fold increase in a short time is hardly possible for them.
- promising, young. The capitalization is small, as well as fame. They have appeared recently. They can grow hundreds of times due to the low current rate (the path from $1 to $100 is much easier than from 1 million to 100 million).
So when buying cryptocurrencies, be sure to invest up to 50-70% of your capital in reliable cryptocurrencies. More about them come further.
Ethereum (ETH)
While bitcoin casinos is digital gold, ethereum is considered to be digital oil. Its capitalization is more than $130 billion. Ethereum was created back in 2015 by Russian programmer Vitalik Buterin.
Main purpose
- The Ethereum platform is meant for smart contracts, and the ethereum cryptocurrency serves them.
- Smart contracts are “smart” contracts executed automatically as soon as the conditions specified in the contract are met.
Ethereum has many advantages over bitcoin: faster transactions (20 times), faster generation of new blocks. Its release is not limited to the maximum amount. The reward for a block of ethereum is not reduced which is very good for miners.
Litecoin (LTC)
This is the first fork (code fork) of bitcoin. Litecoin is called “digital silver”. It is good for investing for the following reasons:
- It is a more convenient payment system than bitcoin. Transactions are confirmed much faster.
- Today Litecoin is accepted as a means of payment in many countries around the world.
Being the first fork of bitcoin, Litecoin is also a “backup system” in case some critical error happens in the bitcoin network. All this increases people’s faith in this cryptocurrency which means both its value and rate will grow in the future.
The price of litecoin is growing slowly, but steadily. Most likely, it will continue to grow as this cryptocurrency develops as a means of payment. The current capitalization of “digital silver” is $9.7 billion.
The decision about what coin to buy should be yours. Still, you can use the information from this article to come up with a trading move.