Currently, there are thousands of cryptocurrencies available on the market. Choosing the best one to invest and trade in can be a daunting task for beginners. You never know which one will go up in value and which one will go down.
To help you get your bearings, we at Pionex have compiled a guide on the best cryptocurrencies for beginners in 2021. We’re also going to give you a quick guide on how to pick the best one for you.
If you’re a beginner in cryptocurrencies and are interested in learning more about them before diving deeper into the rabbit hole, read on!
How to Pick the Best Cryptocurrencies for Beginners
When starting your journey into the world of cryptocurrencies, you need to understand what makes a token good. In general, there are three things that influence the value of a cryptocurrency. Those three things include the market capitalization of the coins, the future development plans and utility of the coins, and finally the hype and reputation surrounding the coins.
Market capitalization is basically the total value of all the coins in circulation. Higher market capitalization means that the coins are more widespread, are of higher value, or a combination of both.
Cryptocurrencies with larger market caps usually means that they are more accepted by the general public and will exist for a long time. Because of that, when buying large-cap crypto’s you don’t have to worry about any exit scams or pump and dumps, as long as the coins have a reputable team behind them and a clear vision for the future.
Yes, you heard that right, it’s not enough to rely on the market capitalization of a cryptocurrency as an indicator of their potential and safety. You also need one with a clear vision and a great development team to ensure that it will survive long into the future.
Coins that have a solid development team and also a great roadmap for the future tends to increase in value. This is because the developers constantly add extra features or improve the coins, increasing their utility and perceived value. Companies and the general public will respond to this increase in utility by valuing them more, thus increasing their market price.
Besides market cap and future vision, you also need to watch out for the hype surrounding the coins. Coins that are hyped will tend to increase in value rapidly, irrespective of its actual value or utility for the general public.
When buying cryptocurrencies as a beginner, we recommend that you stay away from these types of ‘hype coins’ due to their extreme volatility and unpredictable price movement. However, if you’re a seasoned trader and can act quickly, ‘hype coins’ such as SHIB and DOGE can make you a lot of money very quickly. But if you’re inexperienced, they can also burn your money in an instant.
Now that you know what to look out for when buying cryptocurrencies for beginners, here are our recommendations for the best cryptocurrencies for beginners in 2021. These cryptocurrencies have a good combination of large market caps, a reputable developer team and also a clear vision for the future utility of the coins.
Bitcoin was created in 2009 by Satoshi Nakamoto, an anonymous pseudonym believed to be the creator of Bitcoin and one of the pioneers of blockchain technology. As with most crypto, Bitcoin (BTC) runs on a public blockchain distributed over thousands of computers. This is one of the main appeals of bitcoin and cryptocurrencies in general, their decentralized nature and their safety courtesy of it’s proof-of-work system.
Bitcoin is a cryptocurrency with the largest market cap and also highest renown. This coin is known all over the world, even by non-crypto enthusiasts. Because of that, Bitcoin has been the byword for cryptocurrencies in the heads of many.
The main advantages of bitcoin is in its market cap and renown. Because bitcoin is one of the poster boys for crypto, it won’t be going away anytime soon. If you want to put your money inside a coin that’s most likely going to be valuable for a long time (albeit still very volatile), bitcoin is the right choice.
Ethereum, like Bitcoin, is one of the largest cryptocurrencies in the world with a market cap second only to Bitcoin. Both a blockchain and a cryptocurrency, Ethereum is a favorite for programmers and developers due to it’s versatility and potential for creating unique and useful programs. This blockchain network allows programmers to use smart contracts and to create NFT’s in it’s network.
Unlike Bitcoin which is a great coin due to its brand name and market cap, Ethereum is a great coin due to its growth potential and versatility. Many future applications and programs can be run on the Ethereum network, drastically increasing it’s usefulness and in effect it’s value.
Ethereum also has a new 2.0 version that dumps the outdated proof of work system and adopts a newer more energy efficient proof of stake. This increases Ethereum’s speed and also lowers its energy consumption.
If you’re looking to put your money in a prospective network for the long term, Ethereum is a great choice. However, keep in mind that like all cryptocurrencies, even Ethereum will experience slight bumps and volatilities.
Binance Coin (BNB)
Binance is one of the largest cryptocurrency exchanges in the world, they also have their own coin which is the binance coin (BNB). You can use this coin to trade and pay fees on the platform.
Since its launch in 2017, BNB has expanded beyond simply facilitating trades on the Binance platform into a full fledged cryptocurrency. Now, it can be traded or exchanged into other forms of cryptocurrency, pay for services, and even book travel arrangements.
The brilliant thing about this coin is that it’s deeply embedded into the Binance ecosystem. This means if the exchange is still operational and turning a profit, you won’t have any problems with this coin
If you’re confident that Binance is going to survive well into the future, then you won’t have to worry about placing your money into the Binance coin.
Even though Cardano is one of the newcomers into the cryptocurrency scene, it has caught a lot of attention due to its innovative proof-of-stake concept. This method increases the network validation speed and also drastically reduces the amount of energy needed to process transactions compared to regular proof-of-work used by most blockchain networks.
Like Ethereum, Cardano enables programmers and developers to create programs and utilities inside their network. This has earned Cardano the moniker “Ethereum Killer” due to it’s similar yet slightly more efficient network mechanism.
If you’re interested in buying coins for their future potential, Cardano is one of the coins with the highest potential growth in value and utility in the market today. However, keep in mind that like all coins, ADA does have it’s fair bit of volatility.
Solana, like Cardano, is one of the more promising tokens from the “Ethereum killers” group. Solana is both a network and a cryptocurrency in the form of the token SOL. This network runs on a hybrid proof-of-stake and proof-of-history mechanism that helps it process transactions quickly and efficiently.
Currently, Solana claims to be the fastest blockchain network on the market and also one of the fastest growing ecosystems in cryptocurrency today. It has over 400 projects spanning NFT’s, De-Fi, and more.
If you’re interested in a quick growing and novel platform that has the potential to boom and rival Ethereum in the future, Solana is a great choice for your next cryptocurrency.