Cryptocurrency is a potentially great digital asset for investment. Some cryptocurrencies have better options for investment in 2020. Do you want to know what digital currencies are worth investing your money in the next 12 months? Read the following recommendations.
Factors to consider when choosing a cryptocurrency for investing in 2020
Despite the international trend of cryptocurrency devaluation in 2019, some coins still possess a very good potential for making quick and long-term ROI. Do not pay attention only to the current rate of cryptocurrencies because this index is the most volatile and may change drastically within a few weeks (take, for instance, the dramatic drop of Bitcoin price in 2018). On the contrary, consider the following factors and indicators:
Market capitalization – the value of all issued digital coins of the particular cryptocurrency. High market cap means a large volume of the crypto coins participating in active transactions, which means an enhanced interest of investors;
Liquidity level – the higher it is, the faster a cryptocurrency can be sold at the market price. The most popular cryptocurrencies – Ethereum, Bitcoin and Ripple – have a high liquidity rate. Trading activity on exchanges indicates the number of transactions with certain cryptos made over a certain period. This indicator shows an actual demand in particular cryptocurrencies among traders.
Top 5 cryptocurrencies to invest in 2020:
In May 2020, the first and major cryptocurrency developers will offer 50% reduced rewards – 6.25 BTC instead of 12.5 BTC for each verified block. However, apart from that, Bitcoin is likely to bring the dominance index to 65-70% compared to other altcoins. In such a way, it can become the cryptocurrency with the largest market capitalization. These factors may significantly affect the growth of its price in 2020. Active use of Lightning Network may also change the BTC ecosystem. It will enable the implementation of Bitcoin in decentralized applications, micropayments, and e-commerce platforms. The current Bitcoin price (January 28, 2020) is $8 994,85.
Unlike Bitcoin, Ethereum is based on practical smart contracts used by many projects for the digitalization of transactions. The currency value may increase due to the increasing demand for its blockchain and functions, rather than a deficit of the asset as it happens with BTC right now. A major role in the success or failure of this currency will depend on upcoming fork updates and rapid implementation of the Proof-of-Stake algorithm. The approval by regulatory organizations and community decision to de-list ETH from the list of altcoins may also affect its price growth in 2020. The current ETH price is $171,38.
The NEO project is often included in different cryptocurrency investment ratings for the next year. This cryptocurrency breaks many stereotypes, including being the first open-source token originated from China. It claims to transform the traditional financial system by combining digital and real assets. Its unique Superconduct trading mechanism allows users to trust the funds through a decentralized platform. So, NEO’s appliance is beyond doubt, as its rapid demand growth. NEO may even hold an ICO, but so far it is trading at the level of $11,14 USD per token. The current NEO price is $11,14.
Chinese experts, according to CoinTelegraph, really like to include EOS to the list of the most promising cryptocurrencies for the next few years. Even if you don’t know much about crypto coins, it is definitely worth your investment in 2020. If Twitter, Uber, and Amazon ever move to a blockchain, the core of their work will definitely be EOS. The EOS system is free of Ethereum problems with scalability and it is ready to replace other competitive blockchains. If Ethereum fails, EOS can level up to 100 USD per token. EOS achievements become possible thanks to the consensus algorithm of delegated proof of ownership (DPoS) and an infinite number of similar blockchains. The current EOS price is $3,94.