Buying Altcoins (Top Altcoins To Buy in 2021)

Altcoins have made a name for themselves in 2021 thanks to the growing popularity of DeFi. Investors have also looked for ways to make more returns than Bitcoin. Now, we do believe that Bitcoin is always a good investment, but sometimes there are altcoins that do perform better than Bitcoin.

What To Look For Before Investing In An Altcoin?

Before we cover the top altcoins to buy in 2021, we would like to cover some things to look at before purchasing an altcoin. The following tips will obviously not guarantee success when it comes to investing in an altcoin, but they make the odds much better. 

Project Adds Value

The first thing you want to see in any altcoin you invest in is that the underlying project actually adds value to the cryptocurrency ecosystem. All the altcoins we have listed are projects that solve a problem found in cryptocurrency. 

You should be especially excited about projects that add value to some value of decentralized finance (DeFi). DeFi will be the future of finance, so finding projects that add value in 2021 will allow you to get in on the ground floor of something huge. 

The projects you want to avoid are the ones that do not really add value. Instead, they are coins created with the purpose of simply being pumped and inevitably dumped. Some examples include Shiba Inu, SafeMoon, Dogecoin, and most of the ERC-20 tokens that appear on Uniswap for a week before being rugged. Can these altcoins make money?

Of course, Shiba Inu and Dogecoin made early investors some amazing returns. However, those cryptocurrencies rely mostly on hype, which means that the projects die when the hype dies. 

Investing in altcoins like that should only be done with small amounts of money that you can afford to lose. It is more akin to gambling than investing in anything solid. 

Strong Team

Next, a good altcoin investment will have a strong team and community behind it. You generally want to avoid the altcoins with one man development teams and a lackluster community. 

Again, these can make money, but more often than not they end up fizzling out or being scams. The proper way to invest in altcoins like this is to wait until they have some proof of success before making an investment (ie. Yearn.Finance). 

Not a Scam

Finally, don’t invest your money into scam altcoins. This can generally be avoided by following the above two tips. 

Scamcoins never actually add any value and they almost always come from anonymous developers. Both of which should be massive red flags not to invest your hard earned money into those projects. 

With that in mind, if you can avoid scams and only focus on altcoins that add value, then you should do pretty well with your altcoin investment in the long term. 

Top Altcoins of 2021

As mentioned previously, this list will focus on altcoins that have some value proposition. It’s important to note that an altcoin is not necessarily a small market coin. There are altcoins that have very large marketcaps. 

Ethereum (ETH)

Ethereum is, in our opinion, the top altcoin of 2021. Decentralized finance (DeFi) lives on Ethereum. And DeFi still has not reached anywhere close to mainstream acceptance.

In other words, Ethereum has plenty of room for a major price increase in 2021 and beyond. Non-fungible tokens (NFTs) are also almost exclusively on Ethereum. Granted, that bubble has almost completely popped at this point, but NFTs will have their day eventually. 

Furthermore, Ethereum will launch EIP-1559 in July. EIP-1559 will greatly reduce the supply of Ethereum produced per day and standardize gas fees. Both of those should have a positive impact on the price of it. 

Where To Buy Ethereum

Ethereum is the second most popular cryptocurrency in the world. Every cryptocurrency exchange should have it. We recommend purchasing on a trustworthy centralized exchange like Coinbase and immediately transferring the cryptocurrency off the exchange. 

It is also possible to purchase Ethereum over the counter (OTC) for larger amounts. That is generally the best option if you want to purchase a large amount at once.

Chainlink (LINK)

Chainlink is a cryptocurrency project built on Ethereum. Basically, it is an oracle protocol that relays information from meatspace onto the blockchain. It does this in a decentralized manner. 

More importantly, users can stake LINK to a node. A node that provides false information, verified by other nodes, results in the burning of the staked LINK. This keeps the nodes honest. 

Protocols that receive data from Chainlink nodes must pay for that data in LINK. This is done to ensure there is always demand for LINK. 

Now, Chainlink is important because it is essential to the proper operation of DeFi. Quite simply, there are no real alternatives to Chainlink. It basically has a monopoly as a decentralized oracle on Ethereum. 

This is one coin that we expect to perform very well alongside Ethereum. 

LINK Token Information

Ticker: LINK

Price: ~$30

All-Time High: ~$50 on 15 May 2021

Market Cap: ~$13 billion (rank #12)

24 Hour Trading Volume: ~$2.4 billion

Circulating Supply: ~429 million

Total Supply: 1 billion

Max Supply: 1 billion

Where To Buy LINK

LINK is a relatively popular altcoin. You can find it on most centralized exchanges like Coinbase or Binance. It is also possible to purchase LINK on a decentralized exchange like Uniswap or SushiSwap. 

Polkadot

Polkadot is the first coin on our list that does not reside on Ethereum. So, why is it on our list?

It is always a good idea to have some diversity in the event that a black swan event wipes out Ethereum.

Is it likely?

Not really. But it’s worth hedging against it in the event that it does happen. 

Polkadot is the best hedge against Ethereum. 

First of all, the founder of Polkadot is Dr. Gavin Wood. He is the same man who co-founded Ethereum. 

That is a great addition to the team. 

More importantly, Polkadot is already at Ethereum 2.0. It is proof of stake (PoS), has parachains, and a higher number of transactions per second than Ethereum. 

Polkadot can process ~1000 transactions per seconds compared to Ethereum processing about 10 to 15 transactions per second. 

The only problem with Polkadot is…?

No one uses Polkadot. This is the same problem that all Ethereum killers face. The benefit with Polkadot is it has Dr. Gavin Wood as the founder. A man that co-founded Ethereum.

Again, Polkadot is the type of altcoin you buy a small amount of in the event that it actually does kill Ethereum. 

Polkadot Token Information

Ticker: DOT

Price: ~$22

All-Time High: ~$49 on 15 May 2021

Market Cap: ~$21.2 billion (rank #9)

24 Hour Trading Volume: ~$2.4 billion

Circulating Supply: ~943 million

Total Supply: 1,079,044,913

Max Supply: Infinite

Where To Buy DOT

DOT is available on most centralized exchanges. Oddly, it is not currently available on Coinbase despite being the 9th largest cryptocurrency by market cap. 

Binance, Kraken, and other top cryptocurrency exchanges all have DOT, though. It is not a difficult token to purchase. You can also purchase it OTC in certain places. That is only recommended if you plan on investing a large amount of money into DOT.

The Graph (GRT)

The Graph is another interesting blockchain project that primarily resides on the Ethereum blockchain. Anyway, The Graph is involved in indexing blockchains. 

Basically, The Graph will be the Google of the decentralized infrastructure. In fact, The Graph is already there to some extent with a decent amount of DeFi smart contracts relying on The Graph if necessary for the smart contract to operate. 

Now, the project itself is great, but the best part is how the native token Graph Token (GRT) functions in the ecosystem. It’s beyond the scope of this article to fully break it down, but the basics are that query requests must be paid in GRT. 

This gives GRT actual demand rather than simply being one of those cryptocurrencies that is used as a store of value. 

In other words, you can own the tokens used to pay for information requests from what will essentially be the Google of the blockchain. 

With that in mind, GRT is a solid altcoin to buy in 2021 that has gone under the radar of most investors. Just keep in mind that while The Graph’s technology and use is solid the DeFi industry is still relatively small. It may take a few years for the investment to truly moon. 

The Graph Token Information

Ticker: GRT

Price: $0.52

All Time High: $2.71 (February 12, 2021)

Market Cap: $3.3 billion

24 Hour Trading Volume: ~$51 million

Circulating Supply: ~2.9 billion

Total Supply: 10,000,000,000

Max Supply: 10,057,044,431

Binance Coin

Binance Coin has been around for a few years. However, it was not taken very seriously because it did not have much use off of Binance’s exchange. 

It was simply a utility token for the exchange. 

This changed in 2020 with the launch of the Binance Smart Chain. We won’t go into specifics, but Binance Smart Chain is basically a blockchain that serves as a cheaper alternative to Ethereum. More specifically, a cheaper DeFi alternative.

Yes, it’s not as decentralized as Ethereum. That does not appear to matter much to users. 

Users have shown that they only seem to care about the transaction fees and liquidity of the decentralized exchanges. The Binance Smart Chain has plenty of that with transaction fees under $0.01 (basically free) and billions of total value locked on PancakeSwap. 

The popularity of Binance Smart Chain is important to the value of Binance Coin because it powers the Binance Smart Chain. Users must use it to pay gas fees on the network. 

Binance Coin can also be used to purchase any cryptocurrency sold on Binance at a reduced fee.

Due to this, Binance Coin is another altcoin that appears to be in position to further increase in price with the rise of Ethereum. You should remain weary, however, because Ethereum will stabilize gas fees with EIP-1559. 

With that said, Binance Coin is still a coin that you should have some exposure to if you want altcoin exposure. 

Binance Coin Information

Ticker: BNB

Price: ~$22

All-Time High: ~$49 on 15 May 2021

Market Cap: ~$21.2 billion (rank #9)

24 Hour Trading Volume: ~$2.4 billion

Circulating Supply: ~943 million

Total Supply: 1,079,044,913

Max Supply: Infinite

When Should I Sell My Altcoins?

The answer to this question is very subjective and depends on many things including your tax situation and financial situation. WIth that out of the way, the general advice is to sell your basis and some profit when the returns are ~500% and keep the rest for the future. 

Again, this is very generic advice. If you have a small basis, then it’s probably not worth selling until the profit is massive. And sometimes you might be forced to sell due to financial emergencies. 

The one piece of advice that remains universal is do not sell for a loss unless absolutely necessary. The cryptocurrency market is wild and a 70% loss today could be a 600% (or far more) return in a few years. Just ask anyone that sold bitcoin after massive crashes in the early days. 

Closing Thoughts

That finishes it for the top altcoins of 2021. 

Is this a comprehensive list of the best of altcoins available in 2021?

No. There are thousands of altcoins. There will most likely be some small micro cap altcoins with thousands of percent returns in 2021. 

This article simply focused on some promising altcoins of 2021. To get truly great returns requires venturing into microcap altcoins, but those carry much more risk than more well established altcoins like the ones listed.