Best Cryptocurrencies in 2020

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Best Cryptocurrencies in 2020

Published days ago on July 31, 2020
By Anton Kovačić

Best Cryptocurrencies in 2020 to Invest in with Bitcoin Loophole

2020 has been a challenging year for investors of all levels. The retail investing community has particularly been hit hard as almost every financial asset class has delivered unpredictable returns at best and downright massive losses at worst. But cryptocurrencies have provided a ray of hope for investors, yet again. Crypto coins and tokens have not succumbed to the coronavirus inspired economic downturn and have helped investors not only to preserve their capital but also to achieve attractive returns. Still, investing in cryptocurrencies is not a simple walk in the park. Investors must be careful to pick out the most promising cryptocurrencies that will not expose their capital to unwarranted risk.

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Why Should You Invest in Cryptocurrencies?

Here are some of the reasons why you should consider investing in and trading cryptocurrencies in 2020.

High Returns

Cryptocurrencies have only been around for a little over a decade. But they have notably outperformed literally every other financial asset class in that period. Bitcoin, the first-ever cryptocurrency, is known for its move from less than $1 to just below $20,000 in less than 10 years. No matter your investment amount, that is the kind of price appreciation that can literally change your life.

Volatility

When trading financial assets, opportunity comes out of volatility. In that regard, there is practically never a dull day in the crypto world. Crypto coins and tokens are known to post gains and losses in double or triple percentage points daily. This means that investors can pick out lucrative opportunities or book attractive profits throughout the day when investing in or trading cryptocurrencies.

Great Technology

Blockchain, the underlying technology that powers cryptocurrencies, is becoming increasingly revolutionary in every major industry. In every sense, blockchain is here to stay, with the technology offering far more vital and exciting potential beyond cryptocurrencies. Major governments and multinational corporations have embarked on capital intensive blockchain projects, underlining the disruptive potential of the technology. Blockchain will no doubt be integral in how businesses operate going forward, and this can only be great for cryptocurrencies and their value.

Improved Regulation

In its nascent stages, regulation was a major concern in the crypto world. Cryptocurrencies resided in the grey regulatory area, and in some jurisdictions, there was a blanket ban on them. But this has changed significantly in recent years, with governments adopting a favorable stance towards them and with even some of them even undertaking local digital currency projects. This has predictably helped ease investor concerns on cryptocurrencies, which will also lead to more growth and opportunities in the space.

Simplicity

Traditionally, investing or trading financial assets has always been a daunting and time-consuming activity. This is however not the case with cryptocurrencies. There are no capital or contract restrictions, and it is easy to start owning or speculating on the price changes of your favorite crypto coins and tokens.

New Opportunities

Cryptocurrencies still remain a relatively new asset class, with a much higher ceiling for growth. Existing cryptocurrencies, such as Bitcoin and Ethereum, routinely announce technological advancements on their platforms. Such announcements inspire massive price surges on the underlying cryptocurrencies, offering investors even more rewards. Additionally, there are numerous promising blockchain projects that come up occasionally. Such projects also offer investors the chance to participate in exciting ICOs (initial coin offerings) which have the potential to deliver abnormal profits.

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What are the Risks of Investing in Cryptocurrencies?

Investing in cryptocurrencies is clearly lucrative, but it is not without some risks. Here are some of them:

Volatility

Ironically, one of the biggest attractions of cryptocurrency investing also serves as one of its major drawbacks. The sharp decline of crypto prices in 2018, after multi-year bull runs, is well documented. New crypto coins and tokens also experience volatility round the clock, which can essentially lead to unpredictable price behavior. This uncertainty poses a serious threat to the capital of investors.

Longevity

There are numerous crypto coins and tokens that pop up regularly. Their future is tied to real-world adoption or use cases of the underlying blockchain project. If there is no real traction going forward, the underlying coins and tokens will likely have suppressed prices or may eventually just collapse. This is why it is always important to pick only the best cryptocurrencies to invest in.

Technological Threats

This is a risk that investors who wish to own (rather than trade) their favorite cryptocurrencies usually face. There have been threats of crypto exchange hacks before, some of which have compromised the safety of investor coins and tokens. Beyond that, technology is also a competitive edge in the crypto world. Any new arising technology can rapidly render another blockchain project completely obsolete. This can result in massive losses for investors that invested heavily on a promising project.

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Choosing a Cryptocurrency to Invest In

There are thousands of cryptocurrencies available to invest in. But only a good selection will help you realize your investing goals and ambitions.

Here is what to consider when choosing a cryptocurrency to invest in:

Market Capitalization

In cryptocurrencies, market capitalization reflects the scope of traction a project has garnered. Coins and tokens with high market cap tend to be more established and less prone to price manipulations. They also enjoy massive news coverage, which makes it easy to perform both technical and fundamental analyses on their prices.

Liquidity

Liquid cryptocurrencies feature high daily trading volumes. This essentially means that it is easy to buy or sell them at any given time. It also means that investors will receive the best prices at all times when trading liquid cryptocurrencies.

Price History

Cryptocurrencies are inherently volatile assets. Still, it is vital to assess the historical prices of underlying cryptocurrencies before investing in them. Usually, ultra-cheap coins and tokens are vulnerable to wide price swings that may hinder objective price analysis. A stable price trajectory, on the hand, may mean that a coin or token is backed by solid fundamentals.

Exchange Traded

It is important to consider the number of exchanges a cryptocurrency is listed on. A good coin will be available for trading on a couple of major exchanges. In contrast, a risky crypto asset will be available for trading on only small exchanges. As well, it is important to track announcements by exchanges on new cryptocurrencies that will be trading on their platforms. Such announcements usually trigger massive price reactions on the underlying crypto coins and tokens.

Developer and Community Activity

Strong crypto projects will have huge developer and community activity. There will always be innovations and technological advancements in the pipeline. This will also attract investment as well as massive community interest. In contrast, shady projects will almost never have anything forthcoming and there will be almost nonexistent or exciting community interest.

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How to Diversify Effectively in Cryptocurrencies

The above checklist will filter out the best cryptocurrencies to invest in. But this will also bring forth a new dilemma: how to effectively diversify your crypto portfolio.

In any investing activity, diversification serves the role of minimizing risk exposure and essentially not putting all your eggs in one basket. In cryptocurrencies, diversification is especially important because as a relatively new asset class, investors are exposed to even greater and uncertain risks.

When diversifying a crypto portfolio, the main types of coins to consider are:

Bitcoin

Although just a single coin, Bitcoin is, without doubt, the primary coin in the crypto market. It was the first cryptocurrency and to date, remains the most significant. Having Bitcoin in your portfolio is a no-brainer.

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Ethereum

Like Bitcoin, Ethereum is also a significant player in the crypto land. In addition to being the second most popular crypto, Ethereum also serves a platform upon which other crypto coins and tokens are launched. Thus, investors can have Ethereum coins on their portfolio, as well as some of the top coins and tokens that run on the Ethereum platform.

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Here are other areas to consider when looking to diversify your trading portfolio:

1. Use Cases

Blockchain projects emerge to serve specific use cases, whose success or traction will help propel the underlying cryptocurrencies. There are different types of use cases ranging from Digital Store of Value and the Internet of Things to Cloud Storage and Decentralized Finance. Investors can seek to invest in use cases they deem more valuable or attractive.

2. Stablecoins

Stablecoins came about to solve the number one challenge of investing in cryptocurrencies - volatility. Stablecoins, such as Tether, are backed with real-world financial assets, which ensures that their values remain stable at all times. Stablecoins help investors to have a portion of their capital remain less volatile.

3. Dividends

Some coins can earn investors passive income going forward. This can be in the form of interest or free coins as a result of hard forks or airdrops.

Overall, the best cryptocurrencies to trade and invest in will feature in more than one category on the above factors. As a rule of thumb, when you have to choose between multiple cryptocurrencies in any category, always go for the least volatile one. Furthermore, for investors who wish to own and store their cryptocurrencies, it is important to always choose those that are easy and safe to store in both online and external wallets.

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The Best Cryptocurrencies in 2020

Based on the factors described above, here are the best cryptocurrencies to invest in, in 2020:

Bitcoin (BTC)

Bitcoin’s introduction in 2008 marked the beginning of the cryptocurrency revolution. It was the first and remains the primary cryptocurrency today. Its dominance stands at 40% and it has grown beyond a digital coin to also serve as the modern-day digital store of value. Its biggest feature is its scarcity, with its maximum supply capped at 21 million. Its journey from being worth a few cents to the dollar to printing a peak of circa $20,000 has been a storied tale in the industry as well as a genuine manifestation of the potential returns investors are exposed to when delving into the industry.

Bitcoin is almost synonymous with the blockchain, which means that further adoption of the revolutionary technology bodes well for its future. In recent years, Bitcoin has also taken the role of a directional cue provider in the crypto markets. This has made the coin the most watched, tracked and analyzed cryptocurrency in the world. If cryptocurrencies have a future, then definitely Bitcoin has a future. Still, while Bitcoin remains a solid bet in both the short and medium-term, there are some concerns about its long-term limitations. As technology advances, we can never rule out a better, faster and more efficient cryptocurrency coming up and challenging Bitcoin’s status in the industry. Until then, it is really hard to look beyond Bitcoin in 2020.

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Ethereum (ETH)

Ethereum is the second most popular crypto coin, and its purpose and functionality in blockchain have already propelled it to become the most used cryptocurrency. Initially nicknamed Bitcoin 2.0, Ethereum is nothing like the first-ever cryptocurrency. In addition to its coin, Ethereum is also a blockchain platform that supports the development of decentralized applications, tokens and smart contracts. Numerous major blockchain projects have been launched on the Ethereum platform, and this has required the use of the Ethereum coin. This is the reason why Ethereum is responsible for the bulk of transactions in the crypto world. The coin launched in 2015 (7 years after Bitcoin), but quickly rose to become the second most popular cryptocurrency both in market capitalization and popularity. Investors are always excited about the possibilities of Ethereum because it offers an expanded scope of application in the broader blockchain industry. The platform is also backed by a robust developer team and ever-growing community, which has ensured that it continues to implement technological advancements and innovations, such as the recent Ethereum 2.0. but unlike Bitcoins, Ethereum does not have limited supply. Its current circulation stands at over 100 million coins, and creation will always continue. Nonetheless, supply will become gradual as time goes by.

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Litecoin (LTC)

Litecoin was created in 2011 by Charlie Lee. It became one of the earliest and most successful forks of Bitcoin. A fork occurs when a new blockchain uses the original code of a previous blockchain but makes some changes so as to improve upon it. In its early days, it earned the moniker ‘Bitcoin-Lite’. The vision of Litecoin was to make a lighter version of Bitcoin which would facilitate faster and cheaper transactions. Litecoin has practically the same technical features as Bitcoin but with some minimal tweaks. The mining of Litecoin can be done on cheaper and readily available GPU (graphical processing units) computers rather than the expensive, dedicated ASICs (application-specific integrated circuit) computers. As well, Litecoin’s blocks form faster (every 2.5 minutes) compared to Bitcoin blocks that form every 10 minutes. This allows for faster verification of transactions. Litecoin also notably pioneered its Lightning Network in 2017, which marked the first instance a crypto transaction was performed in less than one second. Like Bitcoin, Litecoin also has a maximum supply that is capped at 84 million coins (4 times that of Bitcoin). Its security is also enhanced, and it is one of the few coins to be listed on major crypto exchanges.

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Binance Coin (BNB)

Binance is one of the largest (if not the largest) crypto exchanges in the world, and in 2017 they launched the Binance coin as a utility token for discounted trading fees on their platform. It initially ran on the Ethereum platform but in 2018, it transitioned into its own blockchain platform. At launch, the Binance coin was hailed as the first actual tokenized security, that offered investors the unique chance to become part of the success of Binance. The Binance coin fuels transactions on the Binance exchange platform and this is why the token is one of the most widely used in circulation. The Binance coin also possesses a robust engine that is able to compare over 1.5 million orders per second so as to match buy and sell orders instantly, which is the core business of any crypto exchange platform. Binance already has over 400 crypto coins and tokens available for trading, and with BNB integrated into their ecosystem, the coin will only grow in prominence. As a platform, Binance has also built a reputation as a secure and trustworthy exchange; something that bodes well with investors that assess the security aspect when investing in cryptocurrencies. This alone gives BNB a blue-chip status, or literally, a coin that you cannot afford not to own.

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NEO

Launched as Antshares in 2014, the coin rebranded as NEO in 2017. It gained the nickname ‘China’s Ethereum’ because it also serves as both a crypto coin as well as a platform where blockchain projects can be launched on. NEO supports the development of both public and private blockchain projects that can all link up on its platform. It features an active developer team and community that support its continued growth and wide use cases. NEO technology applies a unique blockchain technology that enables the identification and digitization of all types of assets. This can facilitate decentralized eCommerce as well as the development of targeted smart contract applications. It is also noteworthy to point out that NEO blockchain does not use the typical proof-of-work technology common with most blockchain projects. Rather, it implements a consensus mechanism known as Delegated Byzantine Fault Tolerance (dBFT), which eliminates any chance of a chain split and also significantly lower energy costs. The mechanism ensures that going forward, NEO can realistically achieve its mission of creating a digital identity for all physical financial assets.

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Basic Attention Token (BAT)

BAT is an ingenious cryptocurrency that was designed to deliver rewards to both advertisers and ad viewers. Advertising is very important for both advertisers and viewers, and the genius team behind BAT sought to create a virtuous cycle to boost interaction. For advertisers, ads serve as the only way to meet potential customers or basically, to build brand awareness. For consumers, ads are a tad more complex - they help them discover new products, but they can also be quite frankly annoying sometimes. But what if ad viewers were rewarded for ads they view? BAT runs on the Ethereum platform and is locally coordinated on Brave, a popular internet browser. Consumers are rewarded when they view or review promotion content, whereas advertisers are guaranteed that a willing community will view their targeted ads. The team behind Brave and BAT has an enviable track record, which includes the development of the popular Firefox browser as well. As a browser, Brave has also been committed to the privacy of its users, blocking all web footprints that its users leave behind when interacting with their favorite websites. Users have full control of their privacy and can also choose to reward their favorite content creators with BAT. Investors who are interested in BAT are basically inspired to create an ethical advertising ecosystem on the internet.

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VeChain (VET)

VeChain was founded in 2015 with a clear mission of disrupting supply chain management. It is fair to say that the project was an instant hit in the crypto community. The project initially launched on the Ethereum platform, but in 2018, it transitioned into its own blockchain, VeChain Thor. While the original objective was to eliminate the drawbacks of traditional supply chain systems, the transition onto its own blockchain opened up new possibilities. The VeChain project would no longer be confined to supply chain management, but its platform would also support the development of enterprise-level blockchain apps that have practical, real-world use cases. A major feature of the VeChain utility is a two-token system that guarantees cost predictability at all times. Price volatility in the VET coin does not mean cost unpredictability on the VeChain platform. The project is overseen by the VeChain Foundation, which is tasked with responsibilities of business development as well as technological research and development. As a coin, VET has always been a lucrative prospect for investors who have faith that the solutions provided VeChain project on supply chain management are applicable in multiple industries across the world. The solutions include asset digitization, proof of audit, proof of origination and proof of publication. With the company already in active partnerships with major global corporations, VET will always be an exciting coin to watch for crypto investors.

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TRON

TRON launched in 2017 with a mission to disrupt the $1 trillion global entertainment market. It outlined a 6-stage program that will eventually ensure that content middlemen such as Google and Apple face a real threat on their activity. The aim is to ultimately empower creators to share their content to consumers directly without the need for intermediary services. The project is still in its first stage of Exodus, where a platform is being developed to enable free peer-to-peer sharing of content. The sixth stage, Eternity, will see the cryptocurrency network run on its own with content creators sharing their work freely and being rewarded. The potential for TRON is massive. It has big backers and enjoys particularly strong connections in China, a country with over 400 million active internet users that post content. Furthermore, the TRON Foundation has actively been reducing the circulating supply of the token, which can help support higher prices in future. The sixth stage of the TRON project is set to be achieved by 2024, but active development will continue to deliver price surges and reward investors in the medium term.

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Bitcoin Loophole - Cryptocurrency Exchange

The Best Way to Invest in Cryptocurrencies

We have outlined the best cryptocurrencies to invest in, in 2020. When seeking to earn from cryptocurrencies, there are two distinct models: trading on an exchange and trading with a CFD broker.

Cryptocurrency Exchange

When you trade on a crypto exchange, you essentially buy to own and store your cryptocurrencies. This will require that you own an online or offline crypto wallet to safely store your coins. When you buy a cryptocurrency on an exchange, you are essentially betting that the underlying coin will appreciate in price so that you can book profits when you decide to sell. A major benefit when trading on an exchange is that you may earn some rewards on interest-bearing coins or additional coins when blockchain forks are implemented. But there are downsides as well. Falling crypto prices will result in massive losses and it may be sometimes difficult to offload illiquid coins.

Online Brokers

In contrast, when you trade cryptocurrencies with a CFD broker, you do not own the underlying coins, but only speculate on their price changes. This means that you earn based on your prediction. With cryptocurrencies inherently volatile assets, the prospect of earning in both rising and falling markets is very enticing. CFD brokers also offer leverage trading, which means that investors stand to book amplified profits when they get their predictions right. CFD brokers are also known to offer professional trading services that include transparent pricing, advanced charting as well as guaranteed liquidity at all times. A major drawback with CFD brokers is that most of them have a limited selection of crypto coins and tokens available for trading.

The investment model you adopt depends on your investor profile, but CFD brokers clearly provide the best conditions that enable the efficient trading of volatile assets such as cryptocurrencies.

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Trading Cryptocurrencies with Bitcoin Loophole

Bitcoin Loophole is an automated crypto trading software that makes it easy for investors to trade their favorite coins and tokens with as minimal risk exposure as possible. The trading software was developed in 2018 as prices of cryptocurrencies started retracing after years of extended bull runs that delivered abnormal profits to early crypto investors. Prior to 2018, the investing strategy in cryptocurrencies was basically HODLING. This is essentially investing in a good crypto coin and holding it for price appreciation. But 2018 brought a rude awakening to crypto investors; cryptocurrencies were now entrenched financial assets that will never rise till eternity; they were also susceptible to prolonged price pullbacks and dips. It was never enough to determine which coins and tokens to buy, but it could also be as vital to establish when a coin can dip. There was as much opportunity when prices rise as when they fall.

How Bitcoin Loophole Works

Bitcoin Loophole is designed to take advantage of both technical and fundamental opportunities in underlying crypto coins and tokens. The software utilizes over 30 technical indicators to pick out the most optimal entry and exit prices in the crypto market. It also implements a robust fundamental strategy to filter out the best cryptocurrencies to trade at any given time. Bitcoin Loophole scans for market information in multiple top RSS feeds so as to ensure investors take advantage of the best ICOs on offer and stay on top of coin-specific news such as project updates, production timelines and even regulatory events. The software has AI integrated, which means that it is able to make logical hypotheses on all the technical and fundamental data that it tracks. AI also helps in determining whether an opportunity will be taken advantage of aggressively or conservatively by varying the stake amounts and lot sizes.

Bitcoin Loophole executes all the signals it positively generates in real-time. Its underlying API is linked with top brokerage platforms to facilitate this. The software also has VPS functionality, which guarantees that investors will enjoy the best execution at all times regardless of any underlying technical issues.

Bitcoin Loophole is a fully automated trading software and does not require any investor intervention when it is trading cryptocurrencies. Still, there is the option to customize trading options, such as trading times, tradable assets, trading amount and risk management orders. While trading activity is automated, investors still have a great degree of control over how decisions are made in the market.

Bitcoin Loophole also ensures that investors are exposed to the lucrative opportunities of established coins such as Bitcoin and Ethereum as well as new altcoins that are capable of delivering outsized profits when their underlying projects take off.

Investors who wish to take their crypto trading to the next level can sign up with Bitcoin Loophole where they will be linked with top global brokerage firms. They can try out the software in demo mode and start live trading with minimal capital amounts.

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