Want to jump straight to the answer? The best altcoins in 2021 are ETH, LINK, UNI, XLM, AAVE, and SOL.
In 2017, the term altcoin became popular after millions of new Bitcoin competitors appeared in the market. Today, most of the top 100 “altcoins” are not Bitcoin alternatives, they are entirely different products. Blockchain is capable of much more than digital payments, and viewing all other cryptos as competitors is an outdated mindset. Advanced blockchains like Ethereum and Solana are revolutionizing and decentralizing all kinds of financial products, and these are the best altcoins in 2021.
Now, with the explosion of decentralized finance (DeFi) and the increased use of smart contracts, the best altcoins are tokens owned by the best projects and companies in the blockchain space. These DeFi tokens offer more than just speculative value; they have real income and great utility within the DeFi industry.
Blockchain companies issue their own cryptocurrency tokens and often make these tokens a requirement for interacting with their platforms. If a platform adds value and people want to use it, they will have to buy their respective token, which will increase the price of the asset. Some tokens, like SushiSwap, pay dividends to investors from the income generated by their smart contracts.
Take a look at our top altcoin picks for 2021. They include some of the most promising projects in the blockchain space today.
The best Altcoins 2021
The modern altcoin market continues to expand. The rise of smart contracts and new DeFi products has continued to weaken the dominance of Bitcoin’s cryptocurrency market capitalization, which currently stands at around 41% from its 2017 highs of over 85%. .
Check out a list of the most promising altcoins and DeFi projects in the crypto space.
Cryptocurrencies vs. stocks
Generally speaking, cryptocurrencies are much more volatile than stocks. In addition, the cryptocurrency market is open 24/7. Although Bitcoin and Ethereum are generally less risky than altcoins, they are still volatile assets. Most investors use a portfolio tracker to track their cryptocurrency positions, especially if they are invested in multiple altcoins.
CryptoPro is a great free mobile app that allows you to track your entire cryptocurrency portfolio across multiple exchanges are crypto wallets. Getting portfolio tracking will help you stay organized and save you time on tracking your portfolio.
Ethereum, a smart contract platform for building decentralized applications (DApps), was established in 2013 by many co-founders, including Vitalik Buterin. He designed his own programming language for smart contracts, Solidity. To run your Solidity smart contracts on the Ethereum blockchain, you pay a network gas fee in Ethereum’s token, Ether.
Ethereum laid the groundwork for what is now known as Decentralized Finance (DeFi). Ethereum’s early success led much of the DeFi space to rely on Ethereum’s blockchain.
As Ethereum converts to version 2.0 over the next year or so, the fees will drop dramatically and a host of new DApps will have a chance to shine.
The ticket to riding on the Ethereum blockchain is the Ether token (ETH), which is becoming more useful every day.
Chain link (LINK)
Tokens currently represent the vast majority of smart contract applications. Chainlink aims to bring the power of smart contracts to the real world.
Chainlink integrates external data into smart contracts. Ethereum Smart contracts can now act on other asset prices, global occurrences, and make calls to other APIs. Chainlink makes smart contracts really smart.
It also incorporates real world data. For example, it allows farmers to protect themselves against a bad season. Smart contracts filtered through Chainlink pay insurance claims if contract values such as stock price, temperature, or precipitation do not meet a certain standard. Instant payments roll out as soon as the program receives the appropriate weather data. Chainlink’s potential seems limitless and many of the best DeFi apps pay huge sums of money for the LINK token to use their platform.
Uniswap is an Ethereum-based DApp for trading Ethereum tokens through cash pools. Uniswap offers 2 basic products: providing and using cash.
Uniswap offers users the ability to instantly trade Ethereum-based cryptocurrencies by tapping into its smart contract liquidity pools. These liquidity pools are filled by other users, who collect foreign exchange fees to provide liquidity.
The Uniswap fee must be paid with the UNI token, which makes it one of Benzinga Crypto’s best choices for this market cycle.
Stellar lumens (XLM)
Stellar, a decentralized platform to federate the various banking systems of the world, uses various disconnected payment methods (ACH, SEPA, SPEI, etc.). Stellar’s network connects these systems through a decentralized ledger, with on and off ramps for each payment method.
Stellar’s closest competitor, Ripple, is under SEC investigation. Stellar has a great opportunity to seize the opportunity and do its best to become the global payments network.
To avoid spam on the Stellar network, users must pay transaction fees and meet a margin requirement in Stellar’s token, Lumens (XLM).
Decentralized loans offer higher interest rates than centralized loans with better security and anonymity. Aave, one of the major lending protocols today, means borrowers must provide more collateral than the amount they borrow in the smart loan contract. The smart contract securely holds collateral in escrow for the life of the loan, replacing the need for a trusted intermediary.
If the borrower defaults, the lender is automatically paid by the smart contract.
Aave offers 10% APY for certain No Know Your Client (KYC) stable loans, a product that is really unknown in mainstream finance.
Solana is a smart contract blockchain with an active DeFi ecosystem and over $ 10 billion locked in protocols. Many see Solana and other smart contract blockchains as “Ethereum killers”. Others are seeing the demand for blockchain products grow to the point where many of the largest smart contract blockchains can be fully utilized simultaneously.
Whatever the outcome, there will likely be a significant amount of innovation on the Solana blockchain thanks to its deep VC support. Solana has been adopted by Sam Bankman Fried and the FTX team, who certainly have the funds to make blockchain successful.
While many financial applications require the security of a heavily decentralized blockchain like Ethereum, blockchain games and other applications make more sense on a high-speed, low-cost chain like Solana. Solana’s native token is SOL, which is needed to interact with the blockchain.
The trading platform you choose will determine which altcoins you have access to. While some platforms like Robinhood and Webull offer a few cryptocurrencies as well as stocks, dedicated cryptocurrency platforms usually offer a lot more altcoins to invest in. If you are looking to invest in lesser known altcoins, you may need to use a decentralized exchange like Uniswap or SushiSwap. Check out our list of some of the top rated crypto trading platforms below.
Prime Time for Altcoins
Bitcoin can certainly be your introduction to the crypto industry in the same way that buying Apple share is an easy introduction to the securities market. However, there is so much more below the surface. This could be the year that many altcoins hit prime time. As people start to understand altcoins through their actual use cases, you can bet their implementation will increase along with the price of their currencies and tokens.
Benzinga has developed a specific methodology for classifying cryptocurrency exchanges and tools. We prioritized platforms based on offers, prices and promotions, customer service, mobile app, user experience and benefits, and security. To see a full breakdown of our methodology, please visit our Cryptocurrency Methodology page.