What is the best cryptocurrency to invest in?

As 2022 approaches, this is a question that is very relevant for many potential investors. As more and more people understand the huge potential of the cryptocurrency market, even people who have little to do with the professional financial sphere are beginning to ask this question.

Is cryptocurrency a good investment?

The cryptocurrency market is relatively young but has already allowed many people to become millionaires and even billionaires. But don't forget that these success stories also come with opposite ones in this industry. Many investors have lost significant sums by investing in scam coins or succumbing to panic during a crypto market crash (and there have been many of them already). One important market pattern is that risk matches reward, and the crypto market is by no means an exception to this rule.

Advantages and disadvantages of investing in cryptocurrencies

Like other types of investment, cryptocurrency investments have their own set of benefits and drawbacks.

The main advantages of investing in cryptocurrency are:

• Volatility. The very high volatility of the crypto market means that the potential profitability of crypto investments are also very high. In fact, few types of investment can compare in terms of their profitability to cryptocurrencies.
• Low entry threshold. Unlike most other types of investment, you don't need to have a lot of funds to start investing. This makes crypto investments affordable to almost anyone.
• Simplicity. Crypto investments don't require intermediaries, brokers or filling out numerous documents. Internet access is usually sufficient.
• Contributing to the development and advancement of technologies. By investing in cryptocurrencies, you increase their adoption and contribute to the development of blockchain technology in general.

Of course, the considerable advantages of this type of investment entail notable disadvantages, as well:

• Volatility. No, it's not just an advantage. The price of a cryptocurrency can skyrocket in a matter of days, increasing by multiple times, but it can collapse just as quickly.
• Risk of theft and hacking. When investing in cryptocurrencies, you need to understand the precautions specific for this type of investment to prevent criminals from stealing your cryptocurrencies.
• Risk of fraud. Many cryptocurrencies are created with the sole purpose of making money on hype. After achieving this goal, the creators of such cryptocurrencies abandon their project, which usually leads to a severe drop in the price of these cryptocurrencies.
• No compound interest effect. Since owning cryptocurrencies doesn't generate income in the form of dividends, in most cases, investors only make profit if the cryptocurrency is sold at a higher price. However, with some cryptocurrencies, this disadvantage can be circumvented by staking them.
• It can be difficult for newcomers to the crypto industry to master the full amount of knowledge required to successfully invest in cryptocurrencies.
• Conversion difficulties. In some cases, it may be difficult to convert cryptocurrencies into fiat money and vice versa.
• Regulatory risks. In most countries, regulators haven't yet come to a final decision regarding their attitude towards cryptocurrencies. And the governments of some countries are trying to ban cryptocurrencies altogether under the pretext of combating money laundering. Such risks negatively affect the prices of cryptocurrencies.

Things to remember when investing in cryptocurrencies

If you decide to invest in cryptocurrencies, bear in mind the following factors:

1. Cryptocurrencies are a high-risk type of investment. Don't invest more than you can afford to lose.
2. Do your own research! Always carefully study the cryptocurrencies you intend to invest in.
3. Don't give in to emotions and pressure from the media and bloggers. The fear of missing out on profits and the fear of losing money when the crypto market falls are among the top reasons why crypto investors lose money.

Best cryptocurrency in 2021

Crypto investors have had a very profitable year in 2021 so far. The leading cryptocurrency, Bitcoin, has risen in price by over fivefold since the beginning of the year, despite the crypto market's summer correction. But which cryptocurrencies have shown the most impressive growth in 2021? We won't mention low-liquidity coins; instead, we'll list the best performers among the coins that have already gained popularity on the crypto market.

Best performing cryptocurrencies in 2021 (as of 15/10/21)

Best crypto to invest in 2022 for long-term

In general, if you choose to invest for the long term, it's better to buy the currency which you personally know to be promising. Among other things, this will help you wait out the inevitable downfalls of the crypto market without selling your crypto at a loss.

In addition, when choosing a coin, you should evaluate such criteria as whether the project:

• Meets the needs of the market
• Is actively developing
• Has a community of enthusiasts interested in it.

Bitcoin

The first cryptocurrency has already plummeted in value many times, but each time, it has risen even higher again. Perhaps now it's no longer the most profitable cryptocurrency for investing, but it's certainly the most reliable.

BTC statistics (as of 15/10/21)

Ethereum

Ethereum is the first project to demonstrate to the whole world that blockchain is much more than just cryptocurrencies. Ethereum is a platform for developing and running smart contracts and decentralised applications. The project has a strong founding team, is actively developing and shows no signs of weakness despite the emergence of more and more new competitors.

ETH statistics (as of 15/10/21)

Polkadot

Polkadot is an ambitious project that aims to tie together disparate blockchains and ultimately serve as one of the tools for creating Web 3.0, a decentralised Internet where users will have control over their data. It was founded by Gavin Wood, one of the most famous personalities in the blockchain industry, and has an experienced development team. The project has many advantages, which has already led to a significant increase in the price of its token.

DOT statistics (as of 15/10/21)

Litecoin

Bitcoin's younger brother, created back in 2011, has stood the test of time. Despite the lack of any innovative ideas in the project, it has quite widespread adoption, is fairly popular and shows decent growth from time to time.

LTC statistics (as of 15/10/21)

Chainlink

Chainlink is a decentralised service of oracles that supply blockchains with information from the world outside the network. Since oracles are in demand among data providers, blockchain start-ups and the DeFi sector, this project looks very promising, and many analysts consider its tokens to be undervalued.

LINK statistics (as of 15/10/21)

Despite the fact that no one knows which cryptocurrency is the most promising, especially when it comes to long-term investments, some conclusions can still be drawn from a careful study of individual coins and the crypto market as a whole. A thorough study of the crypto market, a cool head and risk management will help you make money on investments in cryptocurrency.