The best cryptocurrencies to invest in: what cryptocurrencies should you invest in this summer?

The five cryptocurrencies to invest in right now

The cryptocurrency market has already experienced some record highs this year. However as spring 2021’s rally appears to run out of steam, now may be the time to invest in cryptocurrency. Here are the six most likely to coins to benefit from a renewed bull run in the market.

1. Bitcoin (BTC)

Bitcoin seems an unlikely inclusion in the list. After all, in May Tesla’s seemingly self-appointed ‘crypto-influencer’ CEO Elon Musk questioned the environmental credentials of BTC.

And in the UK, banking giant HSBC told Reuters it had no intention of offering cryptocurrencies to customers or of launching a crypto trading desk.

But while these pronouncements appear to be bad news, the long-term prospects would suggest summer 2021 may present an opportunity for investors looking to buy into Bitcoin. 

Is Bitcoin the best cryptocurrency to invest in summer 2021?

The Taproot upgrade is expected to improve bitcoin’s transaction privacy and allow for more lightweight and complex “smart contracts”.

Other developments likely to push up the price of bitcoin include:

  • The relaunch of Goldman Sachs’ cryptocurrency trading desk;  the investment bank believes there are potential benefits to bitcoin’s limited supply 

  • The SEC is now reviewing two Bitcoin exchange-traded funds (ETF) for the US market

Trade Bitcoin to US Dollar - BTC/USD chart

Bitcoin to US Dollar
Daily change
54995.6
Low: 53781.2
High: 55155.3

2. Ethereum (ETH)

Ethereum has appeared almost unstoppable so far this year. It’s the second-largest cryptocurrency and there remains excitement around its non-fungible tokens (NFTs); not a week goes by without a NFT launch.

There is intense speculation ETH’s current run could result in it usurping Bitcoin as the main cryptocurrency by market cap within a few years.

Is Ethereum the best cryptocurrency to invest in summer 2021?

Ethereum’s potential may be accelerated by the EIP-1559 upgrade. Also known as the ‘fee burn proposal’  the EIP-1559 upgrade means that instead of being awarded to miners reward fees are ‘burned’.

This means Ethereum’s supply will be limited over time, making it ETH more valuable as numbers of the coin diminish. This could trigger a dramatic increase in its value.

Trade Ethereum to US Dollar - ETH/USD chart

Ethereum to US Dollar
Daily change
4142.79
Low: 4045.56
High: 4176.68

3. Litecoin (LTC) 

The price of Litecoin took a hit in May, declining by 18% during the month. Even so, the coin is still trading 10% higher than it was at the beginning of the year. Its price is also more reasonable at $194.04.

Is Litecoin the best cryptocurrency to invest in summer 2021?

With an all time high of $400, Litecoin’s current value may look disappointing. It remains a potential competitor to Bitcoin because it’s more affordable and it supports faster transactions.

Trade Litecoin to US Dollar - LTC/USD chart

Litecoin to US Dollar
Daily change
197.31
Low: 195.32
High: 199.81

4. Ripple (XRP)

Ripple (XRP) has been battling American regulators; the Securities and Exchange Commission (SEC) and XRP are engaged in a $1.3bn lawsuit. However Ripple recently won a ruling which prevents the SEC seeing evidence of Ripple’s legal advice over the security status of XRP.

Is Ripple the best cryptocurrency to invest in summer 2021?

Ripple Labs plans to go public. This listing could send the price of the XRP token higher which means investors who buy now, while its price is relatively low $1.06, could make a serious profit. However the battle with the SEC may put investors off.

Trade Ripple to US Dollar - XRP/USD chart

Ripple to US Dollar
Daily change
0.95041
Low: 0.93452
High: 0.9571

5. Polkadot

Polkadot was the most successful cryptocurrency of 2020. It has a market cap of $9.9 bn despite only becoming tradeable in 2020. DOT has risen over 250% in value since the beginning of the year and over 1,100% since August 2020.

Is Polkadot the best cryptocurrency to invest in summer 2021?

Polkadot is a proof-of-stake coin, and is a rival to ETH in that it works via a decentralised network. Analysts say it has the potential to become one of the top three cryptocurrencies.

The best cryptocurrencies to invest in

How do I know the best coins to invest in?

Dr Roman Matkovskyy, an associate professor at Rennes School of Business, says investors should be wary about investing in cryptocurrency to hedge against inflation; inflation is expected to rise post Covid-19.

He says: “Our results show that while Ethereum offers no scope for post-shock recovery towards long-term equilibrium, Litecoin and Bitcoin offer some hope only in lower levels of shock.  “This raises questions as to the pure ‘safe haven’ characteristics of bitcoin.

“Our analysis indicates that as a group, cryptocurrencies represent the riskiest asset class in the long-run in terms of unpredictability of returns.”

Katharine Wooller, managing director UK and Ireland, Dacxi, urges investors to have their cryptocurrency investing strategy in mind first and be prepared for the long haul.

She says diversifying, looking at several different cryptocurrencies might help mitigate risk.

“The vast majority of Daxxi’s platform users buy into ‘bundles’ of three or four different cryptocurrencies at the same time.”

“When investing in crypto consider why you are investing. Do you hope to buy a new Porsche at the end of the month – a punting strategy? Or are you squirreling money away for your pension – a wealth building strategy?”

“If you take the view that crypto is here to stay as an ever-more important facilitator of low-cost global commerce, then short-term investor sentiment shouldn’t come into the reckoning.  Best case, the overall trend is positive, and you can ride out short term volatility.”

Further reading: Bitcoin vs Ethereum: the two cryptocurrencies compared

Further reading: Dogecoin vs Bitcoin: which crypto is better?

Further reading: Monero vs Bitcoin: the pros and cons

Further reading: Chia coin explained: What is it and how does it work?

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