The crypto market has come a long way over the last few years. Not so long ago, cryptoassets such as Bitcoin, Bitcoin Cash, and Ethereum were viewed by many as gimmicks that had no real value. Today, however, it’s a very different story. Digital currencies have gone mainstream and some of the world’s largest, most dominant companies are embracing them.

Crypto prices have surged in 2021

Over the last six months, we have seen a number of major developments in the crypto space that have pushed asset prices higher.

In February, for example, electric vehicle powerhouse Tesla announced that it had purchased $1.5 billion worth of Bitcoin in order to diversify its balance sheet. Tesla boss Elon Musk also announced at the time that the company would soon be accepting Bitcoin as a form of payment.

Meanwhile, in March, PayPal launched its Crypto checkout service, allowing consumers to pay for goods at 20 million merchants worldwide with cryptocurrencies such as Bitcoin, Ether, Bitcoin Cash, and Litecoin.

Looking ahead, many more well-known companies – including the likes of Mastercard and Visa – are planning to get involved with digital currencies such as Bitcoin. This could support asset prices and increase the appeal of owning a selection of top cryptoassets.

What are the best cryptoassets for 2021?

For those interested in investing in crypto, we have put together this guide highlighting three top cryptoassets to consider in 2021. All three of these assets have attractive growth prospects in today’s digital world and have seen an increase in interest from both private and institutional investors recently. All are available on eToro and can be found under the ‘Crypto’ section.

Bitcoin

Bitcoin chart 5 years

Past performance is not an indication of future results. Your capital is at risk.

  • Bitcoin (BTC) is the world’s largest cryptoasset by market capitalisation. Launched in 2009 by Satoshi Nakamoto (a pseudonym), it is a decentralised digital currency based on blockchain technology that is designed to be an alternative to traditional fiat currencies. It can be sent from user to user on the global peer-to-peer Bitcoin network without the need for intermediaries such as banks.
  • Major global payments companies are increasingly embracing Bitcoin. Already, the currency is available through digital wallets such as PayPal and Venmo. Soon, it could be supported on the Mastercard network. Recently, Mastercard announced that it plans to accept crypto on its network later this year.
  • Bitcoin is also attracting a lot of interest from institutional investors right now. These investors are looking to diversify their clients’ portfolios and hedge themselves against inflation and currency debasement after central banks unleashed unprecedented amounts of stimulus during Covid-19. A recent survey of 100 institutional investors and wealth managers from across the US, UK, Germany, and Switzerland found that 85% of these investors plan to increase their investment in Bitcoin over the next two years. The survey also found that 72% expect professional investors in general to invest in Bitcoin for the first time or increase their exposure between 2021 and 2023.
  • Going forward, new custody solutions could boost institutional interest in Bitcoin (SEC regulation requires institutional investors with customer assets of $150,000 or more to store their crypto-assets in secure accounts with qualified custodians). One company that is active in this space is Bank of New York Mellon Corp. Currently, it is developing a prototype that it claims will be the financial services industry’s ‘first multi-asset digital custody and administration platform’ for both digital and traditional assets. This will bring Bitcoin and other cryptoassets under the same roof as traditional holdings such as stocks and bonds.
  • Bitcoin is enjoying a strong upward trend at present. Year to date, the Bitcoin price is up nearly 100%.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

XRP

ripple chart

Past performance is not an indication of future results. Your capital is at risk.

  • XRP is the token of Ripple – a payments company that provides efficient solutions for global money transfers. Ripple operates RippleNet, a network of banks, payment providers, and other financial institutions that uses a single application programming interface (API) to make the process of moving money around the world faster, cheaper, and more reliable. Ripple touts XRP – which is currently the fourth-largest cryptoasset by market cap – as a more efficient digital asset for global payments due to its faster transaction speeds and lower costs.
  • XRP experienced weakness late last year after the SEC filed a $1.3 billion lawsuit against Ripple and its executives for offering the cryptoasset as an unregistered security. The regulator took the view that XRP is a security (i.e. a financial asset that investors can profit from), rather than a currency or medium of exchange.
  • However, Ripple maintains that XRP should be treated in the same way as Bitcoin and Ethereum, neither of which are the subject of an SEC lawsuit. In an official reply to the SEC published in December, the FinTech company stated that the SEC’s theory is “wrong on the facts and the law.”
  • Recently, interest in XRP has increased after the court denied the SEC access to financial records linked with Ripple co-founder Chris Larsen and CEO Brad Garlinghouse – who are named defendants in the case – and the Ripple executives asked a judge to dismiss the lawsuit.
  • XRP has also risen on the back of Ripple’s international expansion. On 29 March, the FinTech company announced that it had agreed to acquire 40% of Malaysian cross-border payments firm Tranglo to meet growing demand for payments solutions in Southeast Asia. Southeast Asia is RippleNet’s fastest-growing region.
  • XRP has strong price momentum right now. It has soared by around 130% in April and by more than 500% from its lowest level in December. Year to date, it has outperformed rivals Bitcoin and Ethereum.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

ADA

Cardano chart

Past performance is not an indication of future results. Your capital is at risk.

  • ADA is the native token of Cardano – a public blockchain platform designed to run various applications such as smart contracts and decentralized applications (DApps). This platform was launched in 2017 as a competitor to the Ethereum blockchain. It was designed and built by Input Output Hong Kong (IOHK), whose CEO is Charles Hoskinson, the co-founder of Ethereum. The key advantage of the Cardano platform is that it is much faster than Bitcoin in facilitating peer-to-peer transactions, meaning it solves the problem of scalability.
  • Cardano is laying the foundations to establish itself as the leading smart contract platform. Smart contracts are digital agreements that can be used to settle complex deals, hold funds in escrow, and secure movement of funds under predefined conditions. They specify where funds should go, and under what conditions they will be sent, executing a deal only when all conditions are met. Cardano will allow DApps to interact with the ledger to record their activities and execute smart contracts.
  • At the start of March, Cardano implemented ‘Mary’ ‒ a multi-asset protocol upgrade that allows users to create unique tokens for transactions on the platform. ‘Alonzo,’ an upcoming protocol upgrade, will build on these capabilities, adding support for smart contracts. This will open up opportunities for businesses and developers by enabling the creation of smart contracts and decentralized apps for decentralized finance (DeFi).
  • ADA has been one of the most in-demand assets on crypto exchanges this year. Year to date, it is up around 600%. As a result, it is now bigger than many popular cryptoassets such as Bitcoin Cash and Litecoin.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

How to invest in cryptoassets

Interested in learning more about cryptoassets and how to invest in them? Our ‘Guide to Trading and Investing in Cryptocurrency’ could be a great place to start. This guide has been designed to walk you through the basics of crypto and explain how you can buy crypto easily through eToro.


Charts sourced from eToro platform 15/05/2021. All trading carries risk. Only risk capital you can afford to lose.

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