Headline The Cryptocurrency market participants stole all the news in the pandemic-plagued 2020 and early 2021, as the prices of all major tokens grew leaps and bounds. Bitcoin, the market leader, jumped from a ‘meagre’ ~$7,000 in January 2020 to over $58,000 in May 2021! Ether, the proprietary token of the Ethereum ecosystem, surged to $3,500 from $128 in January 2020. The in-vogue Dogecoin, thanks in no small part to the backing of some visionaries, joined the party late in February 2021(trading at $0.01), but quickly made up the growth gap, surging as high as over $0.70! The younger sibling Chainlink, found as late as in 2017, also joined the party, touching $48 in May 2021, from $2 in the beginning of 2020. A quick glance of these figures are always met by gasps of surprise and sighs of frustration – did we miss a great investment opportunity extended by this disruptive alternative? Should we still hop on board to earn exponential returns? The Concept of Crypto-Currency About 12 years ago, the new generation of transaction mechanism was introduced, albeit quite discreetly, as Satoshi Nakamoto (whose identity, quite remarkably, yet remains a secret) came up with the first decentralized cryptocurrency, Bitcoin. An ambitious go at ‘Independence from Central Banks’, ‘Privacy like Never Before’, ‘Currency for the Boundary-less World’ and ‘A Denomination Without Inflation’, Crypto-Currency has grown leaps and bounds – from a prized tool for the unknown, to the most talked about form of investment and borderless payments. Crypto-currency is an intended alternative to the state-issued fiat currencies, that is outside the regulations of any Central Bank, thereby giving the holders/participants the freedom to transact without the traditional intermediaries. Most of them (including Bitcoin and Chainlink) have limited supply and are therefore anti-inflationary, which makes them attractive investment alternatives. At present, there are 4000+ cryptocurrencies worldwide, with a total market cap of USD2.44 Trillion. However, only a few are worth consideration, and we specifically recommend the following two tokens for investment – Ether (ETH) and Binance Coin (BNB).
Why Ether? Though used interchangeably, Ethereum and Ether are two different terms. While Ethereum is the Decentralized Finance (DeFi) ecosystem that has been spearheading smart contract mechanism and open source blockchain system, Ether (ETH) is its native currency. The world’s most active blockchain, Ethereum allows developers to build and operate applications within its ecosystem, aiming at eliminating the traditional banking and non- banking financial systems. It has also popularized the use of Non-Fungible Tokens (NFTs) for the secured ownership of intellectual property.
Ether, therefore, is not merely a crypto-currency that works as a unit of exchange in limited transactions and has its demand generated completely on the basis of investment rush by the buyers – it is a part of an extensive ecosystem, where it plays the role of a fiat currency (hard cash quite similar to USD, Euro, or any other national currency) for borrowing and lending of funds, purchase of IP, brokerage or similar charges, etc. At present, its total market worth is just below $425 Billion, second to only Bitcoin. This developing ecosystem makes the currency much more stable and much less speculative. In fact, unlike Dogecoin, whose ~30% tokens are held by a single wallet, the biggest holding of ETH is only 5%. Only 7 wallets hold 1% or more tokens. In other words, the supply of the tokens can’t be disrupted by a single holder. We, therefore, believe that if our subscribers want to surf on the Crypto tide, they should prefer a token that has a huge upside potential but also has a long-term application in the growing DeFi sector. ETH ticks all the boxes, making it a more sustainable bet as compared to its peers. Factor in the transition from proof of work to proof of stake and ether has real life applications being deployed daily worldwide.
Performance: In 2020, ETH rised from $130 on January 1 to $735 on December 31, marking a substantial return of ~460%. In 2021, ETH has been performing even better, with prices crossing $3800 mark as we speak. That converts into 500% returns in less than 5 months! Price Target: $8000 by 2022 The high target price is mainly due to the surging growth in Ethereum ecosystem users. The access and trust on the applications of the ecosystem means that Ether’s demand will continue to rise. Furthermore, the growth trend shown by the cryptocurrency market is probably here to stay for the next several months, which further shifts up the target price expected to be realized in the next few months. While we still love bitcoin, the price appreciation potential of bitcoin relative to currencies like ether, makes it harder to recommend relative to other cryptos. Why Binance Coin (BNB)? Binance Coin is the native cryptocurrency of the Binance Crypto Exchange. The Binance Exchange is the largest cryptocurrency exchange in the world, facilitating millions of transactions every second. Similar to ETH in the case of Ethereum, BNB is the currency for payment of fees and other transactions on the platform. With unbelievably low transaction fees and high level of trust, the popularity of Binance has been unsurprisingly rising since the Exchange’s inception in 2017. Check out any site’s ranking of the most recommended crypto exchanges, and you’ll find Binance at the top. With support for 150+ tokens, Binance has already taken a giant leap compared to its peers. Thanks to the surging importance presumed by this exchange, its native token, BNB, is bound to be used increasingly by the participants.
The stability of its parent and the assurance of efficient management by Binance is why we feel that BNB is in safe hands. Moreover, the supply of BNB is not only limited (the maximum supply was capped at 200 Million tokens), but it is also obligated to burn about 50% of the tokens with the passage of time, leading to shortage in supply of the tokens and ultimately price rise.
Performance: The year 2020 was pretty dull from the cryptocurrency standards for BNB, as it recorded a growth of ‘only’ 175% ($37.34 on December 31, 2020 vs $13.70 on January 1, 2020). It has more than made up for it in 2021, though, sprinting to a price of $650 on May 9, thereby exhibiting a price growth of 1600+%! Price Target: Some estimates place BNB target price at $1900 by the end of this year. The relatively low price of the token as of now, the quarterly burns executed by Binance, and the increasing use of the exchange can push the prices to 3x by year end! Conclusion: Investing in Cryptocurrency has always been a double-edged sword. There are hundreds of examples of both rags-to-riches and riches-to-rags stories involving these investments. That being said, its never foolish to wash your hands in the high waves, as long as you ensure that you don’t drown! Invest in cryptocurrencies like these two, but only if you have the appetite for the volatility and money you can afford to lose. And even if you have such funds lying around, it's never a mistake to diversify them into safer investments too!