In 2020, many cryptocurrencies have shown large value increases. People who invested in them at the beginning of the year made large profits. Do you want the same profit next year? We have prepared a list of promising altcoins. These coins showed great growth in 2020 and have prospects for further value increase. Read on to find out which cryptocurrency is better to invest your money in.
After Bitcoin, Ethereum (ETH) is the second largest cryptocurrency by market capitalization. It appeared in 2013 along with the eponymous blockchain platform.
Ethereum is a platform for many other cryptocurrencies (tokens) and for the smart contracts execution. Ethereum’s goal is to become a global platform for decentralized applications (DApps). It allows users from all over the world to write and run censorship, downtime and hack-resistant software.
Throughout its existence, Ethereum has demonstrated relative stability and constant value increase. Therefore, it is considered a promising coin for investment. Since the beginning of 2020, the coin has almost tripled its value. On January 1st, the cost of ETH was $130, on October 14th — $382.8.
Ethereum also benefits from:
- DeFi progress;
- state recognition of the coin as an exchange commodity. New York State Department of Financial Services issued ErisX a license to trade Ethereum futures contracts;
- the prospect of introducing an Ethereum based benchmark by the Federal Reserve System.
DeFi — decentralized finance. Its peculiarity is that the creators of exchanges, wallets and applications don’t have access to users’ funds. DeFi has become the main trend of 2020. The main reason is a large value increase of tokens related to the system. For example, the YFI token has increased its value by 100,000% since the summer of 2020.
Yearn Finance (YFI)
The native token of Yearn Finance, an app for investing in DeFi. The token was launched in July 2020 and showed a record high price of $41,000 in September. Therefore, the YFI token became the first cryptocurrency to beat the value of Bitcoin.
In August 2020, YFI was added to the Binance exchange and is currently trading in pairs with /BNB, /BTC, /BUSD и /USDT. The token has gone beyond the Yearn Finance platform in which it is used for governance.
At launch on July 18, 2020, the coin price was $32. In mid-October, the token price is $15,723, which is still more than the cost of one BTC — $11,414. In less than 3 months, the coin value has increased by 49,134%.
Andre Cronje, the developer of the platform, admitted that he himself does not understand the reason behind the rapid growth of the YFI token value. He didn’t count on such success and didn’t plan to issue the coin beyond the Yearn Finance app. Cronje suggested that the hype around the token stems from the fact that it gives users the right to participate in the platform governance. The token gives the right to vote on protocol improvements and a share of the profit from the commission charged by Yearn Finance. Andre Cronje predicts that the token rate will begin to fall when the final distribution of YFI tokens occurs.
LEND is the token of Aave DeFi app that gives users the ability to:
- take part in platform governance by voting for the proposals of community and developers;
- reduce commissions;
- improve interest rates and profits.
One LEND token doesn’t cost much, but with large investments it will give you a tangible income. For example, on January 1, 2020, the coin price was $0.015, in mid-October — $0.529. If an investor had bought $10,000 worth of LEND at the beginning of the year, he would have earned $342,666 in profit by October.
There are expectations that the token rate will continue to grow due to users’ interest in the Aave platform. Aave is one of the most advanced DeFi platforms for the following reasons:
- it supports a large number of cryptocurrencies;
- it supports a large number of wallets;
- it has a flexible interest rate system.
LINK is a token of the Chainlink cryptocurrency platform. It was created to bridge the gap between smart contracts powered by blockchain technology and traditional financial and payment instruments.
Since the blockchain cannot access data outside of its network, Chainlink uses an oracle system. Oracles are organizations and individuals that have the technical ability to provide the necessary data: banks, exchanges, etc. They work as special information channels and transmit the necessary information (for example, temperature, weather), which trigger the execution of smart contracts.
Since January 1, 2020, the price of the LINK token has grown by 605%: at the beginning of the year, the coin was trading at $1.8, and in mid-October its rate was $10.9. Analysts believe that the coin rate will slowly but steadily rise. This belief is due to the trust of the cryptocommunity in the project and its developers:
- Chainlink partners with Forbes, Binance, China’s state blockchain platform BSN and is constantly expanding its partner’s list;
- Chainlink is constantly working to expand its network and show users improved system performance and other improvements;
- Chainlink often appears in media headlines and is the subject of many discussions on social media.
Also, the LINK’s price is positively affected by the ETH price due to the fact that the Chainlink platform is created on the Ethereum blockchain.
So, we looked at 4 promising cryptocurrencies of 2020:
1. Ethereum (ETH) — the time-tested altcoin, the rate of which is growing constantly.
2. Yearn Finance (YFI) — the token that gained maximum popularity in September 2020 and broke the Bitcoin price record.
3. Aave (LEND) — the token that doesn’t cost much but is growing in price and promising due to the popularity of the Aave platform.
4. Chainlink (LINK) — the token that has increased its price by almost 10 times in 2020, due to the Chainlink platform developers efforts.