Consider this analysis as an opinion from a trader with skin in trading crypto-assets and a willingness to share interest projects. Hopefully, this way, you can make better trading decisions as we advance from 2020 into 2021.

Starting in my early days of crypto investments, I didn’t understand that the profits were in a combination of playing the long game and the short term game, allocating more to the long term game, of course.

There were not many choices to short sell cryptos back in the days, so you’re kind of left hanging if you bought into the crypto winter of 2018.

These days, there are different investment alternatives in the world of cryptos—more on those as you read on.

Trading blind without understanding the underlying technology behind your crypto asset of choice will most likely get your hands burnt.

Having a full understanding of the crypto asset is crucial, so you can know the type of investment product you will deploy based on your analyzed cryptocurrency.

In this post, we’ll analyze the cryptocurrency market value/future potential, five cryptos to consider investing in, types of crypto investments, and lastly, choosing a reliable broker (BTCC).

Cryptocurrency market value and the future potential

The total crypto market cap increased by a remarkable 35793.59% from the low of January 2015 at 2.122Billion USD to a high of 761.741Billion USD on December 31, 2017. 

Although the total market cap is at about 502.621 Billion USD at the time of putting this article together, it attained a high of 593.324 Billion USD this month, indicating an increase in investor sentiments towards the sector.

With about 12.83 Billion USD locked in decentralized finance projects alone, according to Defi pulse, we expect to see an increase in the acceptance rate of cryptocurrencies going forward. 

An example is that miners can now opt to use their cryptos as collateral instead of selling, which often forces a slump in major cryptocurrencies.

Going back to the monthly chart of the total crypto market cap, an exit of the Relative strength index’s oversold area on 2015-01-01 signaled the huge 35793.59% market surge. 

A similar market structure is already signaled on 2018-12-01 from which we expect a similar surge in the total market cap to a 261.8% Fibonacci projection at 1839.03%.

What are the 5 best cryptocurrencies to invest in?

It’s not enough to buy what everyone else is buying. You have to understand investment sentiment towards the project and, more importantly, perhaps the underlying technology. You also have to know if your crypto of interest is in a bull or bear market.

The crypto technologies with proven track records are a good start. 

As we come to the end of Q4 2020, here are the top five cryptocurrencies we believe to be worth investing in going forward into 2021.

#1. Bitcoin BTC

Why Bitcoin BTC?

Bitcoin has been around for over a decade, with a large community and a vast group of active developers. We believe it is here to stay.

Bitcoin BTC has already gained mainstream adoption, with Paypal finally offering Bitcoin support to merchants and customers.

According to John McAfee, Bill Gates, Richard Branson, etc. Bitcoin BTC is a store of value now popularly referred to as digital gold. 

Bitcoin’s key component is its limited supply of 21 million, consequently increasing demand and price of the number one cryptocurrency. 

It means that it is highly probable that a vast majority of the world’s population will never own a full Bitcoin BTC as its price may be too high in the future.

Sticking to its merit-based system for developers, Bitcoin BTC is being coded and maintained by the world’s best developers.

Strong backing by the crypto community, investors, and speculators has made the currency continue to increase in adoption rate despite multiple hard forks.

Bitcoin would have reached its peak when it becomes the world’s currency, a possibility in the coming decades.

BTC is already solving real-life problems when it comes to our flawed monetary system. 

Looking at the history of money, people have gone from commodity money (gold and silver) to political money (fiat), and it’s about that time we go to digital money.

Below we consider the weekly chart of the BTCUSD and identify past and future potential entry levels.

An entry of the overbought area on 27 April 2020 initialized the potential bullish trend, while the price close between the MA 10 and 20 signaled re-entry into the upward direction.

Say we have 10K USD, and we want to buy 1k USD worth of Bitcoin BTC. We can follow the dollar-cost averaging fund allocation technique and buy about 25% ($250.00) of our total estimated lot size ($1000.00) upon touching the MA-10, and another $500.00 upon entering within the buy zone (Between MA-10 and 20).

A projected level to start buying Bitcoin BTC would be after this week’s closing price by the weekend, and when the BTCUSD exchange rate enters between the $13646.14 and $12204.57.

#2. Ethereum Ether ETH

Second, on our list of cryptos worth investing in now and into 2021 is the Ether ETH. 

According to the Eth 2.0 Deposit contract progress meter, 510 304 ETH is currently staked in the Eth 2.0 deposit contract, and there’s 13,984 more ETH required to launch Eth2.0 by December 01, 2020. 

The progress meter is now at 97.3%, with 10 hours left to the minimum genesis target.

The ETHUSD chart also suggests a correction phase towards the 10-weekly Moving Average. However, we can expect a price rally next week, fueled by the ETH 2.0 launch date.

#3. Cardano ADAUSD

Charles Hoskinson, the founder of Cardano, stated that there would be two significant updates as we come towards the end of November and December, alongside a road map for 2021.

Yella’s launch, a proposed virtual machine (VM) for the development of Decentralized applications dApps in any popular programming language, spurs the crypto community’s interest.

Traders and investors will be on the lookout for these developments.

 Let’s take a look at the charts.

Upon exiting the oversold area and signaling a regular bullish divergence on April 01, 2020, the ADAUSD is set for a bullish rally.

The golden cross of the MA-10 and MA-20 signals a decision to buy into the cryptocurrency. 

A monthly closing price at the end of November will confirm a signal to enter a long position.

#4. Chain Link 

Chain link now powers sOil and iOil on Synthetix according to a blog published on blog.synthetix.io/soil-iol/.

Traders can now trade real-world assets (oil) in a decentralized manner. Using the Chainlink decentralized oracle network, sOil, a synthetic asset, can mirror oil price, allowing users to enter long positions with sOil. In contrast, iOil will enable users to take a short position.

The above monthly chart of the ChianlinkUSDT shows the crypto pair in a strong bullish trend, as it trades above the MA-10 and MA-20 while not going below the RSI level-30.

A long position can be entered at the November closing price and again scale in an extra trade if the exchange rate trades within the MA-10 and MA-20.

#5. Yearn Finance YFI Tokens

Last on our list is the YFI tokens, considering the Yearn Finance Governance’s recent news approving token buyback.

Yearn Finance, an automated protocol that maximizes your annual percentage yields (APYs) of cryptocurrencies deposited in DeFi. 

The system automatically moves funds deposited by users between DeFi and lending protocols like Compound, Aave, and dYdX, focusing on maximizing your APY.

The YFIUSD daily chart shows the crypto pair trading within the MA 10 and MA 20 while also setting up a hidden bullish divergence to resume the bullish trend.

A price close above the 25221.424 resistance would confirm the pair’s decision to take a buy position.

The recent Yearn Improvement Protocol (YIP-54) upgrade should propel further demand for the YFI token.

Types of investment in cryptocurrencies (CFD, Futures, spot market)

Unlike the early adoption days of cryptocurrencies, the only way to access a digital currency or token was to set up a hot or cold wallet. It meant securing your crypto holding. These days, however, there are more ways you can get into cryptocurrencies with a lower barrier to entry.

They include CFDs, Futures, and the early spot market.

Crypto CFDs and Futures contracts

These are known as derivatives, having their values derived from the underlying asset, which can be any cryptocurrency in our case.

By investing in crypto derivatives, you have no concerns with storing and securing private keys. You can start buying by taking long orders or selling by taking short orders.

Regular futures contracts have a twist to them, with an introduced expiration period on your open trade. You may decide to opt for the perpetual futures contract variant, with no restrictions on holding time while meeting the minimum margin requirements.

Crypto derivatives also allow traders to leverage their positions, which increases potential profits.

Spot Market

The spot markets were the first crypto investment alternatives offered by crypto exchanges. Here, the exchange/broker is in the custody of your crypto wallet, leaving the traders at risk of hacks in the early days.  Also, leverage is not offered at the spot market, so you can only make purchases with your available balance.

Choosing a good broker (BTCC)

The need to shop for a tested and trusted broker cannot be overemphasized. You want to be sure that your investment is safe and secured, and you will get fast deposits and prompt withdrawals. After all, we are in this for the money.

Here’s is why we recommend the BTCC crypto exchange. Since the early days, the exchange has been around and now offers regular futures and perpetual futures contracts as crypto derivatives.

With leverage up to 100X, you can place Market orders or pending orders in either the long or short direction on their web-based trading platform (Tradingview).

Signup for a trading account on BTCC using either your email address or phone number and try your first crypto futures trading. Up to 2,000 USDT deposit bonus is available now for new users!

Conclusion

Investing in cryptocurrencies has never been closer to investors, and everyday traders like it now. 

Take advantage of this opportunity and get started with your first crypto investment if you are a neewbie, or explore new ways of investing in the crypto markets if you are a veteran trader/investor.