The year 2020 opens with a remarkable growth in the market for cryptocurrency. Outstanding is Bitcoin, which some consider the new “digital gold”. The rapid rise in the price of the main crypto currencies has been motivated by economic and geopolitical tensions between the US and the Middle East, after the former carried out a “precision attack” on Iranian General Qasem Soleimani, one of the most important political figures in the region. Expectations are high for this year, where this and other political events could influence the rise and fall in value for the main digital currencies. In this article we will share our “ranking” of the 5 best cryptocurrencies to invest in 2020.
We open the list with the leading cryptocurrency and it’s really no surprise. The original coin starts the year by recapitalizing key resistances and, by the time this article goes to press, it’s back up to $8000. The gradual steps in adoption have been recognized, but where the expansion of bitcoin really stands out is in its introduction to institutional money. Every year, new ways of investing in BTC through different financial derivatives such as futures contracts or options are revealed. The BTC-based ETF remains one of the items to cross off the list and several financial firms continue to push for its approval.
But there are two even more critical factors for placing the pioneering crypto at the top of the list. The first is a planned mid-year event. We’re talking about the halving of the block rewards. This is an activity that occurs approximately every 4 years and consists of halving the reward that BTC miners obtain by solving the cryptographic problem that allows a new block to be added to the blockchain. This is a very important event as the miners begin to receive reduced rewards for their activity and, as a result, the supply often decreases. With stable or growing demand, this could increase the price of Bitcoin. Historically, halvings have been surrounded by significant increases.
Another factor has come into play earlier this year, as mentioned in the beginning of this article. We are referring to the fears of war that are already beginning to have an impact on the so-called “safe haven assets”. Gold is the main one and it has reached its peak since 2013. A global geopolitical conflict could lead to a flow of money into these assets where some investors tend to “shelter” their capital in times of crisis or uncertainty. In addition to this, other situations such as Brexit or the trade war between the US and China could add to the spotlight on bitcoin, which could be seen as some sort of escape route.
> Read our guide on how to buy Bitcoin.
Basic Attention Token (BAT)
Now, let’s talk about data. In 2019, BAT closed with a profit of just over 40%. But if we look at the factual statistics, they suggest that the expansion in price could be even greater. According to BAT, there were about 9994 websites registered in the Brave and BAT Attention Based Advertising program at the beginning of 2019. 1 year later, the figure rose to 40,172 websites, a growth of over 300%. Also, the number of downloads is starting to shoot up and Brave could start competing with the big browsers in the industry very soon. Although the price does not necessarily have to follow the adoption behaviour of these platforms, the adoption statistics are a good indicator that the project will continue to grow in 2020.
Ethereum could be both on and off our list and the explosion of its price will be drive – to some extent – by the decisions made by its development team. It closed 2019 with a loss of almost 5%, isolating itself from other cryptos which finished the year with a good rate of return. Despite all this, according to CoinMarketCap, it remains unchallenged as the 2nd most capitalized crypto currency in the market. Ethereum continues to be the largest ecosystem for token development and decentralized applications, hosting more than 1/5 of the total digital currencies in the industry.
However, this observation also needs to take into consideration the undisputable capacity limitations of its network. After the arrival of the Istanbul upgrade in December 2019, a fragmentation solution could be implemented in its blockchain that would significantly increase the number of transactions processed per second. This would be an opening for Ethereum 2.0, the upgrade that could completely change the outlook on Ether. Nevertheless, these advances will depend on the consensus of the development team in 2020.
> Read our guide on how to buy Ethereum.
Ripple is yet another cryptocurrency that closed 2019 in the red despite the expansion of its RippleNet network and the xRapid solution, which makes cross-border transactions faster and cheaper with the use of the XRP digital currency. According to its CEO, Brad Garlinghouse, 2019 marked the best period for acquisitions and contract signatures between Ripple Labs and other financial companies looking to adopt its solutions. Because of its close relationship and dependence on banks, the XRP is a controversial cryptocurrency. However, the company’s quarterly reports show growth and interest on the part of the banks.
With 2019 closing in negative (losses of approximately 47%) and oversold conditions during a couple of timeframes, the markets still have a silver lining on the horizon. If Ripple gains momentum and the rest of the market moves in its favour, it is very likely that the XRP will be one of the best cryptocurrencies to invest in 2020.
> Read our guide on how to buy Ripple.
This is a token that certainly no one would have anticipated to be in our ranking of the best cryptos to invest in 2020. First of all, it is important to understand the rapid growth of stablecoins last year and the fact that everybody wants a piece of this business in the crypto industry. The development of tokens anchored to the value of fiat currencies is not new. Tether was one of the first to explore this concept and its USDT coin is pegged to the value of the US dollar. To date, its capitalization places it as the fourth cryptocurrency by market capitalization. With Facebook’s planned launch of its Libra ecosystem in 2020 it has become clear that pegged currencies are not to be ignored. Other giants such as JP Morgan or the Chinese executive himself (through the People’s Bank of China) have also decided to launch their own stablecoins.
Yet there is a fundamental problem: the concept of a fiat pegged coin breaks with the decentralised nature of cryptocurrencies, as there is a central authority to back each cryptocurrency with real money in a 1:1 ratio. Maker’s Decentralized Autonomous Organization (DAO) totally changes this scenario though and creates its own stable cryptocurrency DAI. It is based on an intelligent algorithm that keeps you ‘sliced and diced’ with the price of the dollar through the deposit of ethers and other crypto-currencies as collateral. This “collateralized” model is powered by the MKR currency. In late 2019, a crucial upgrade of the system was made with the launch of the multi-backed IAD. The above reasons could support a growth in the price of MKR as the use of MCD (multi-backed IAD) continues.
> Read our guide on How to buy Maker.
Other crypto-currencies to invest in 2020
In addition to the altcoins we looked at, there are other altcoins that could make for surprises in 2020, which is why we have included the following coins on our list;
- Chainlink (LINK): Won the fifth place in the list of the most profitable crypto currencies of 2019 with earnings of more than 500 %. Growth has been almost unstoppable and as long as the upward trend continues, it will only be a matter of finding a good entry point.
- IOTA (MIOTA): one of the most futuristic cryptocurrencies in the industry has failed to convince the bull in recent months. It was one of the big losers in 2019 despite several strategic alliances with big companies like Jaguar, which are starting to implement value in the objects connected in the Internet of Things (IoT) network. But its oversold conditions set the stage for a rebound, which will have to be accompanied by new developments at IOTA.
- VeChain (VET): its focus on the digital transformation of supply chains is really interesting. But its inclusion in this list is due to the recent opening of China to the use of blockchain technologies. The resolution promoted by President Xi Jinping himself could contribute to the growth of decentralised projects based in that country. Thus, we could include complementing this group with projects such as TRON or NEO.
- Cosmos (ATOM): with an impressive debut and a positive performance in 2019, parallel block chains in Cosmos could facilitate the integration of decentralized technologies with the real world. Its chain interconnection ecosystem is also known as the “Internet of blockchains”.
- GRAM: We are closing with a digital currency that has not yet reached the market, but will probably do so in 2020. GRAM, a cryptomon currency proposed by one of the leaders in messaging: Telegram. It would support the TON network and would be available for exchange in Telegram applications for different mobile platforms. However, Telegram faces a regulatory wall that could stop its crypto currency from launching. If it overcomes the hurdles, GRAM would immediately sneak into the Top 10 of the CoinMarketCap for the capital raised in its private funding rounds.