Why Invest Not Only in Bitcoin. 13 Alternatives

In 2020, investing in BTC brought its holders several times less profit than buying altcoins. Some of them have risen in price by thousands of percent. Analysts told which cryptocurrencies remain undervalued and retain the great potential for price growth

In 2020, Bitcoin remains a symbol of the cryptocurrency market, but it is not a leader in terms of profitability. BTC has risen 46% since January, significantly weaker than most other coins. For example, Ethereum added 170% of its value over the same period. The key reason for this growth was the expectation of updating the ETH blockchain to the second version, which will introduce the possibility of passively increasing the number of coins by staking.

Since the beginning of the year, the Binance exchange token (BNB) has also shown significant growth — 100%. One of the drivers of the coin’s rise in price was its entry into the decentralized finance (DeFi) market. The trading platform also provided customers with the opportunity to make deposits in cryptocurrency in order to receive rewards in other coins. At the moment, the annual profitability from the use of this product reached 1200%, but later the rate dropped significantly.

The largest growth in 2020 was shown by assets directly related to the DeFi sector. For example, the Chainlink token rate has grown by 450% since January, to $ 10, and in August, rising to $ 20. A similar dynamic was demonstrated by the BAND coin. Over the same period, its rate rose by 2900%, from $ 0.22 to $ 6.6, briefly reaching $ 17.6. Both projects provide oracles — products that allow you to track cryptocurrency rates with decentralized applications.

The growth of thousands of percent was shown by the tokens of DeFi sites. The leader in terms of profitability in this area is the token of the Yearn Finance platform (YFI). It was released on July 18 and was trading at $ 32 at the time. Now the asset is worth almost 100,000% more, $ 32,400, and in mid-September, the price peaked at $ 44,000.

There is a “whole palette” of tools in which you can invest instead of bitcoin, the founder of the stable cryptocurrency platform STASIS Grigory Klumov is sure. As an example, he cited the NEO token, on the blockchain of which its own DeFi platform will soon be launched. Another option is YFI coin. Both assets have an average degree of risk, the investor should take into account that their price can fall by up to 50%.

Klumov named Balancer (BAL), Synthetix (SNX), REN (REN), Curve (CRV) and Aave (LEND) from the high-risk, but interesting from the point of view of investing, DeFi-tokens. Their rate is quite volatile, but in September it corrected and now has good prospects.

In exchange for bitcoin with medium-term goals, you can invest in altcoins that are in the top cryptocurrency rating by capitalization, says Dmitry Lavrov, trader and founder of Tradunity. Fluctuations in their price will depend on bitcoin, if it enters the growth phase again, altcoins will also rise in price and bring even greater profitability.

“Ethereum is the first altcoin to be added to an investment portfolio. The coin has corrected its past upward movement and is poised for a return to 2020 highs and possibly a refresh. The coin looks strong in terms of technical and fundamental analysis. Also of interest are Binance Coin, EOS, they are at acceptable levels for opening long positions, “Lavrov shared.

On the horizon of next year, representatives of the TOP-30 of the crypto market are interested in altcoins for investment, says Viktor Pershikov, a leading analyst at 8848 Invest. For example Ethereum. The transition to version 2.0 and the development of the Proof-of-Stake protocol will allow the price to rise significantly. Also, the driver of its growth may be the development of the DeFi sector, related to which applications are mainly built on the basis of ETH.

Pershikov also called the token of the Binance exchange (BNB) interesting. It is underestimated by market participants, although the project has also started to enter the DeFi market. On September 10, the company announced that its Binance Smart Chain (BCS) blockchain can now be used by various projects to launch its applications.

Pershikov suggested taking a closer look at the VeChain (VET) cryptocurrency. This coin is interesting in terms of joint partnerships and projects with companies from the classical financial sector. Another option is the crypto.com token (CRO). It is likely to continue to rise in price due to an increase in the customer base, the development of a mobile application, and an ecosystem that includes cryptocurrency-supported debit cards.

Separately, Pershikov allocated the LINK and UNI DeFi tokens. They are fundamentally and technically capable of reaching new historic highs next year due to the next stage in the evolution of “profitable farming” and a new round in the development of decentralized applications. Another promising and underestimated option is the project with the eponymous 0X token, which may arise in price by 2–3 times in the coming year.

Pershikov believes that the moment to buy cryptocurrency data will come in the next couple of weeks. The market has been in a correction since September. It is unlikely to be long-term, and digital assets will return to growth in Q4.

Private trader Alexander Boyarintsev adheres to another point of view. In the current situation, when the Defi market has already grown enough, in some cases by 1000%, it is better to refrain from buying. As a last resort, you can buy an index using Defi-tokens, this option will help reduce risks and limit losses.

“Riding the wave of such growth is not entirely correct. At the beginning of October, it will be clear where the market will go, but correction cannot be avoided anyway, it is a matter of time. Now I’m out of all DeFi, I’m watching the situation, “Boyarintsev said.

On September 13, Qiao Wang, a former product manager at analytics firm Messari, stated that DeFi tokens are “the investment opportunity of the decade.” Not taking this chance is like not buying Bitcoin in 2013 or Ethereum in 2015. But Wang stressed that there is a lot of “junk” in this industry. It is imperative to choose projects that develop a real product and have a fundamental basis for growth.