We’re on a wild ride with you Bitcoin (CCC:BTC), so please leave your hands, feet, arms and legs inside. After hitting an all-time high above $ 58,000, the leading crypto fell to $ 48,000 amid bearish calls from analysts and Elon Musk. But the story is probably far from over. With mainstream support growing, investors should be looking for the next cryptocurrency that’s set to explode in 2021. Here’s what you need to know now.
Essentially, everything worked in favor of cryptocurrencies. Legendary investors keep buying in, and so on Tesla (NASDAQ:TSLA) acquired a stake of $ 1.5 billion. Financial institutions are integrating digital currencies, and you can now use your crypto wallet to buy a home or even a private island. On Friday, the first Bitcoin exchange-traded fund launched in North America with great success and possibly paved the way for a sister fund in the United States. In short, these headlines caused Bitcoin to hit a new all-time high. They also started a rally in a number of lesser-known cryptocurrencies.
Then BTC paused when bearish Bitcoin price predictions hit. A fan of cryptocurrencies, Musk tweeted some concerns about the latest ratings. Are BTC and ether (CCC:ETH) really too high? Regardless of the answer, Bitcoin, Ethereum, and many of their peers began to tumble.
Where we are now, Bitcoin has reduced its losses and is down around 5% in the past 24 hours. That speaks for the power that is still behind the name, but it also opens the door. Investors still want to find the next cryptocurrency that will explode in 2021.
If you want to get in on the ground floor, keep these five tokens in mind.
Next Big # 1 Cryptocurrency: Cardano (ADA)
One of the biggest winners over the weekend was Cardano (CCC:THERE IS), fueled by the hope that the token will be the next exploding cryptocurrency. While Kevin Reynolds wrote for CoinDesk that much of the altcoin rally came from hoping to find the next larger token, there is also quite a bit of social media hype. For example, KISS front man Gene Simmons announced last week that he had bought $ 300,000 in ADA. This comes after similar altcoin purchases, including Dogecoin (CCC:dog).
What should investors think of Cardano? Many optimistic price forecasts result from the possibilities of decentralized financing. Early in 2021, some experts put price tags near $ 2 for ADA. This is because more and more mainstream consumers are looking for DeFi solutions and financial institutions are doing crypto integrations. Plus, Charles Hoskinson, the founder of Cardano, believes ADA has some pretty big things to do.
In a recent interview, Hoskinson said that Bitcoin is only so successful because of its popularity. In other words, as a crypto, it doesn’t have that much going for it. In contrast, Hoskinson believes altcoins like his Cardano offer more technology. Hence, he predicts that an altcoin will soon dethrone Bitcoin as the leading cryptocurrency. In this case, Cardano is definitely a good choice.
The story here with Speckle (CCC:POINT) is similar. Like Cardano, Polkadot has seen big changes in the last few days and especially over the weekend. This happens when investors look for the next cryptocurrency that may explode in 2021 and what are known as entry points on the ground floor to the room. Like Cardano, many see polkadot as a more technologically advanced investment.
As InvestorPlace employee Tom Taulli wrote, Gavin Wood, the former CTO of the Ethereum project, founded Polkadot. Essentially, he wanted to create a platform that could better handle complex distributed environments. This means that several blockchains are working at the same time.
Think of this as just another long-term competitor to major names like Bitcoin and Ethereum. As Polkadot continues to grow and DOT price predictions improve, this is certainly a crypto to keep on your radar. Early data even suggests that institutional clients are diving into an exchange-traded Polkadot product.
Next big cryptocurrency # 3: Chainlink (LINK)
As Taulli writes, the complexity of Chain link (CCC:SHORTCUT) is one of its greatest strengths and one of its greatest weaknesses. Unlike other cryptocurrencies that run on a blockchain, Chainlink runs on a variety of blockchains for smart contracts. This means that heavier applications can be powered. However, this also means that it may need serious assistance due to its technological complexity.
That double-edged sword didn’t hold back Chainlink this weekend, however. In fact, it hit an all-time high when Bitcoin rebounded. And with an eye to the future, LINK should definitely be on your radar. CoinDesk notes that DeFi protocols are already widespread and that it should continue to grow.
Thanks to them GameStop (NYSE:GME) Rally that saw Robin Hood When trading restrictions are imposed, a lot more investors are interested in DeFi. That should show a match with existing cryptos like Chainlink.
Stellar Lumen (XLM)
The story with Stellar and Lumens (CCC:XLM), its native cryptocurrency, is very interesting. At the beginning, the project shares co-founder Jed McCaleb with Ripple and his crypto. XRP (CCC:XRP). And beyond that, they both have a similar mission. With the current state of financial institutions, it can be difficult to transfer money across national borders. Not only is it expensive, but it can also be difficult to navigate and time consuming. Lumen and XRP both aim to solve parts of this problem. Both are based on the distributed general ledger system and allow easy payments.
As Mary Ann Callahan points out, one key difference is that Ripple and XRP are more banking-focused. Lumen, on the other hand, is more aimed at ordinary people. Hence, Stellar and its XLM crypto are targeting people, especially in emerging markets, in hopes of getting them into financial systems online. This sounds like an interesting bet, especially with big names like Jack Dorsey, who are betting on the relevance of cryptos in emerging countries.
What else do you need to know? As Callahan points out, many people see this as a battle between XRP and XLM. While Stellar Lumen benefited from a US Securities and Exchange Commission lawsuit against Ripple, XLM definitely looks like an appealing bet.
Next Big # 5 Cryptocurrency: NEM (XEM)
One final cryptocurrency that could explode in 2021 is NO (CCC:SEE). In fact, NEM has already exploded and has increased by 180% over the year to date. Although this is a crypto that usually flies under the radar, its recent wins are attracting some attention. And the backstory here is interesting enough that you should pay attention to it.
Essentially, NEM started in 2015 as a spin-off from another project. It supports a smart asset system and is written in Java. It is also important that it has goals that go beyond a digital currency. Experts say it hopes to revolutionize crowdfunding, regulatory acts, health data, supply chains, and more. For investors, this means the growing interest in DeFi NEM should highlight.
What else is there to know? The price predictions for XEM are mixed and it doesn’t get much attention. However, given recent price movements, do your homework on this potentially up-and-coming name.
At the time of this writing, Sarah Smith held positions (either directly or indirectly) in any of the securities identified in this article.
Sarah Smith is a web content producer for InvestorPlace.com.