2020 can be called one of the most volatile in the history of stock markets. The scale of the recession due to the coronavirus pandemic was staggering. However, one industry still remained in the green zone. And this is the cryptocurrency market!
There is no doubt that some assets, which have been growing by leaps and bounds in recent months, are worth the attention of holders. However, there are coins you’d better keep away from in May 2021. Let's talk about them.
What cryptocurrency is better to forget about?
It's no secret that it’s 100% taboo to go into a fraudulent project, because this is the same as to muddle money.
When choosing whom to entrust your funds to, always pay attention to the four T-aspects: team, tech, theme and token.
The project team should be checked for the reality of relationships, that is, finding not just an empty profile on Instagram or LinkedIn, but real people who openly communicate with the audience and are somehow mentioned somewhere.
It’s also crucial to find confirmed information about the legal entity of the company: registration, location, membership in associations or other entrepreneurial communities.
The next aspect – technology – is difficult to evaluate if you’re not an expert, but you can ask a question on a specialized forum or, even better, to the project participants themselves. If there is silence in a company chat or your questions are answered in an extremely vague way, then most likely such an asset is not the best alternative.
Next, pay attention to the usefulness of the coin or token in general. Scams can be distinguished by too rosy descriptions or, on the contrary, confusing definitions in White Paper or a Roadmap. And although people understand that the product without prospects is not just strange, but also dangerous in terms of financial risks, there are still such coins on the market. If you see that they are created according to the "buy cheap – sell high" scheme and there is no idea behind them, it’s better to abscond from the asset.
Not all projects manage to keep the bar: a once promising product can deteriorate when the team loses understanding of where and how it will develop. Then employees begin to work off the budget collected during the ICO just for the sake of appearance, supporting some kind of activity in the community and entering into "garbage" partnerships.
The cost of a coin or token of such a project will gradually decrease, as will the popularity of those who are behind it. In 2021, it’s better to bypass such projects.
We all know the story of the Ripple project, which has been in litigation with the US Securities and Exchange Commission for six months now. After the SEC filed a lawsuit, investors in a panic began to sell the coin on the crypto exchanges, and those who were “asleep at the wheel” stayed with the cheapest asset.
Now XRP is slowly recovering its positions thanks to those who believe in the project or try to make money by shorting the cryptocurrency. However, the fate of Ripple is still not decided, so you need to closely monitor the asset's price and news.
But in order not to remain in a losing position, it’s better to avoid coins that conflict with regulators.
Worst assets to buy and mine in May 2021
We’ve described the criteria that, in our opinion, can distinguish unpromising cryptocurrencies. This description includes not only assets without a trading volume, that close the popular CoinMarketCap rating. It can also be top market players who, for one reason or another, are not the best option for holding and mining in 2021.
Crypto community knows that Ethereum emission is unlimited, and this can become a deterrent to its growth in the long term. Also in the official Ethereum Foundation blog, there is a kind of "complexity bomb" that over time hampers coin mining. This contributes to the transition to the Proof-of-Stake algorithm, which will allow ETH holders to receive passive income for holding altcoins. As the difficulty grows, mining cryptocurrency will simply become unprofitable.
Moreover, the Ethereum ecosystem doesn’t need an expensive internal tool, because with the hike in ETH price, the speed of transactions in the network will decrease, and this will greatly damage all projects based on Ethereum and Vitalik Buterin's creation.
Another con of altcoin’s holding is the upcoming launch of the Ethereum 2.0 blockchain. So far, development has been proceeding smoothly, however, each buyer should understand that one unsuccessful decision on the part of the creators will negatively affect the project and the value of the cryptocurrency as a whole.
Ripple project intends to become an alternative to the international payment system SWIFT, and perhaps that is why regulators have tackled it.
In December 2020, SEC accused Ripple and its executives of attracting $1.3 billion by selling unregistered securities under the guise of XRP tokens. This led to the fact that some trading platforms began to delist the coin. However, in March, SEC spokesman said that, apart from Ripple and its employees, no one was breaking the law by selling tokens.
After that, cryptocurrency holders tried to pull the asset price up in order to have minimal losses. But even despite this, the prospects for the project are very vague: both Ripple and the American regulator have equal chances of winning. That is why it is better to give preference to other coins in May 2021.
The internal token of a cryptocurrency exchange is usually in demand mainly among its users, for example, to reduce the cost of fees. However, it’s unlikely to be suitable as a reliable tool for holding. The coins and tokens that power the exchange, such as BNB from the top Binance platform, are constantly bought and sold in the market, maintaining a balance of supply and demand.
The rate of such an asset is only related to the rise or fall of Bitcoin, but the exchange coin will not be able to protect the portfolio during the crisis.
Should you buy cryptocurrency in 2021?
Experts unanimously say that now is the season of altcoins, the growth of which will beatify holders.
Today it’s worth paying attention to promising altcoins, as well as tokens and coins of the DeFi sector – they are now one of the most risky, but also the most promising in terms of growth. Also crypto enthusiasts are advised to purchase stablecoins, which will quickly restore the balance in the portfolio if it has suffered due to the volatility of the crypto market.
To mine or to buy assets, that is the question
Before comparing mining and buying cryptocurrencies, we want to say a few words about mining.
To be profitable in mining digital assets, you need to forget about the home method. Powerful gaming graphics cards and ASICs don’t pay off and incur losses rather than profit.
The greatest revenue is brought by mining stations or, as they are also called, data centers. And, although they quickly pay off, the start-up capital for their purchase should be quite impressive.
As statistics show, the income from mining is about 70% per annum, taking into account that miners don’t enter the market during overheating and on the crypto price peaks.
Now let's look at crypto holding. The first thing to note is the need for sufficient start-up capital. Not everyone can buy a whole Bitcoin at once, and it is clearly impossible to make a fortune from its part.
The second important factor is that in order to profit from a holding of digital assets, you need to know at least the basic rules of the crypto market. So, a beginner who doesn’t understand all the trading peculiarities may not only fail to make a profit, but also go into the red.
And, of course, you cannot ignore market volatility. Currency rates are always fluctuating, so even experienced players can make a wrong forecast. Thus, holding cryptocurrencies can be a panacea for those who know the market well and understand how it works.
To summarize, mining is more stable and provides minimal profitability even during a crisis. When the market stagnates, miners continue to mine cryptocurrency and earn money. Holders have no choice but to accept the reality and wait out the market decline. Moreover, cryptocurrency holders are often stressed that they have made the wrong choice. But, as you know, only stress-resistant people can work with digital assets.
At the moment, the cryptocurrency market is overheated, which means that mining can be unprofitable, so the storage of digital assets is coming to the fore. However, you should be extremely careful and choose only promising projects so as not to get depressed.
Top promising altcoins to buy in 2021
ADA often gets to the top three in terms of market capitalization, experiencing sharp jumps in value. But even when the coin doesn’t rank high, it is always in the top 10 assets according to the CoinMarketCap.
Cardano project is a decentralized blockchain platform based on open source smart contracts that seeks to provide users with better functionality than existing protocols.
A significant price hike of the platform’s asset occurred after the announcement of the listing on the well-known crypto exchange Coinbase PRO – then ADA price increased by 20%.
Cardano is a very ambitious project. Although its cryptocurrency exists for several years, in recent months it has only increased its influence and attracted the attention of many enthusiasts.
THETA coin is gaining momentum. Over the past three months, the asset's quotes have grown by 520%.
Theta Network is a decentralized video streaming project that solves the problem of low bandwidth. Viewers receive quality video content and get THETA rewards. Moreover, the network participants who use their PC as one of the network broadcasting nodes also receive payments in cryptocurrency.
Celo's open platform develops financial tools that run on a smartphone. It supports many dApps and smart contracts, which means that the product is now at the peak of its demand, because the boom of DeFi projects is not over yet.
The internal asset of the CELO platform is now accumulating position to renew its ATH. Since the beginning of 2021, the coin has grown by 174.3%, which shows the interest in the project.
It's not a joke. In 2021, the price of the meme coin reached $0.087. The main driver of the sharp growth was Elon Musk, who repeatedly twitted about altcoin.
It is noteworthy that posts about Dogecoin regularly appear on Twitter, but they don’t have the same effect as the mentions by the Tesla CEO. Now the billionaire is perceived by the IT and crypto community as an oracle, and his statements seem to be a call to action.
Elon Musk is an opinion leader, and he perfectly feels the mood of the public, which is why the meme currency will jump with the next twit of the cosmic entrepreneur.
What cryptocurrency to mine in 2021?
Some experts are confident that cryptocurrency mining in 2021 will no longer bring the same profit as before. Moreover, the upcoming transition of ETH to the PoS protocol will allow the crypto community to earn money on staking and make mining unnecessary.
But while the transition is still not complete, there is a chance to mine some coins that don’t require data center capacity.
And again, DOGE. When mined, the coin requires significantly less energy than Bitcoin and can bring large profits, but it is highly volatile.
One of the oldest cryptocurrencies, created after Bitcoin fork. However, LTC uses the Proof of Work mining algorithm and doesn’t require prohibitive GPU power.
It’s a confidential cryptocurrency based on the CryptoNight algorithm. Its protocol is resistant to ASIC mining, which means it can bring some profit to the miner.
For a long time, DASH has remained one of the most popular cryptocurrencies for mining. Recently, the creators have made it more innovative by enhancing privacy and implementing an instant payment mechanism. An asset can be mined using a processor. And by the way, it has a fairly high liquidity.
We’ve shared an exclusively subjective opinion about what market players will become the outsiders and the leaders in the 2021 crypto space. But there are many other promising projects and currencies that have shown great potential lately.
CoinMarketCap monitors more than 8 thousand assets, and most of them can sink into oblivion very soon and thereby deprive holders of their money. Therefore, you should always be very thoughtful, thorough and responsible about which cryptocurrency to keep in your portfolio, since the crypto industry is still the vast Greenland for an inexperienced traveler.
Disclaimer: IQeon.io employees are not representatives of organizations mentioned in this and other materials as well as in publications in other information channels. Before further interaction with the mentioned services we strongly recommend you to read Terms&Conditions.
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