We all want to find and invest early in the Next Bitcoin.
Or, which is the next cryptocurrency to explode in 2021?
It’s true the Bitcoin (BTC) and few other Altcoins have given spectacular returns over the last few years (Bitcoin itself I think gave 200% returns a year during the last decade). And due to that, many of becoming Bitcoin Crorepati in India.
Further reading – Should you invest in Bitcoin?
But finding the next Bitcoin or what is the next big investment like Bitcoin, isn’t as easy as it sounds. And even if you somehow have the vision to find it, will you be investing a significant amount in it that will change your life? Easier said than done.
There are 10,000+ cryptos out there. And their numbers are increasing by the day. A glance at the cryptocurrency market can be overwhelming, especially for those who are not well versed with it. And space right now is just like the internet bubble of the late 90s. Thousands of crypto projects are coming up. Some are good and some are really crappy with no future. So finding the next Bitcoin (or in normal terms, the next Amazon or the next Google or the next Facebook) is really tough if not impossible.
So what does it take to find the next Bitcoin?
Either of the two things. A solid technical and business understanding of several coins/tokens that you can see as potential Bitcoin dethroners.
Or you need to be sheer lucky!
The crypto market changes very quickly. I was looking at the top-10 coins during the last several years:
Top-10 Cryptocurrencies as of 1st April of 2021
Top-10 Cryptocurrencies as of 1st April of 2018
Top-10 Cryptocurrencies as of 1st April of 2015
As you can see, very few cryptocurrencies have managed to stay in the top 10 and able to significantly grow.
I asked a friend who deals a lot in cryptocurrencies. I asked him about his thoughts on investing in the next big thing after Bitcoin. He said that there are many candidates. And more importantly, it’s quite possible that Bitcoin is the next Bitcoin. Yes. What he meant was that it’s possible that in search of the next big opportunity, we might end up missing one that is already in front of us – the king Bitcoin itself.
Further Reading – Should you Buy & Hold Bitcoin for 10 Years?
The Altcoin space is actually crazy. Most of the projects may not amount to anything eventually and will just die off. When you think about what is the next Bitcoin, then you will have questions like:
- Is Ethereum the next Bitcoin?
- Is Cardano the next Bitcoin?
- Is Ripple the next Bitcoin?
- Is Dogecoin the next Bitcoin?
Now here are the top-100 cryptocurrencies by Marketcap (as of June 2021) – Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Binance Coin (BNB), Cardano (ADA), Dogecoin (DOGE), XRP (XRP), USD Coin (USDC), Polkadot (DOT), Uniswap (UNI), Litecoin (LTC), Bitcoin Cash (BCH), Solana (SOL), Binance USD (BUSD), Chainlink (LINK), Polygon (MATIC), THETA (THETA), Internet Computer (ICP), Stellar (XLM), Wrapped Bitcoin (WBTC), VeChain (VET), Ethereum Classic (ETC), Filecoin (FIL), Dai (DAI), TRON (TRX), EOS (EOS), Monero (XMR), Aave (AAVE), Kusama (KSM), Neo (NEO), Algorand (ALGO), Bitcoin SV (BSV), Maker (MKR), FTX Token (FTT), IOTA (MIOTA), Crypto.com Coin (CRO), PancakeSwap (CAKE), Theta Fuel (TFUEL), Tezos (XTZ), Bitcoin BEP2 (BTCB), Cosmos (ATOM), UNUS SED LEO (LEO), SHIBA INU (SHIB), Klaytn (KLAY), Avalanche (AVAX), Huobi Token (HT), Terra (LUNA), BitTorrent (BTT), TerraUSD (UST), Decred (DCR), Celsius (CEL), Dash (DASH), Hedera Hashgraph (HBAR), Chiliz (CHZ), Waves (WAVES), Compound (COMP), THORChain (RUNE), Telcoin (TEL), Zcash (ZEC), TrueUSD (TUSD), NEM (XEM), Elrond (EGLD), yearn.finance (YFI), Holo (HOT), NEAR Protocol (NEAR), Zilliqa (ZIL), Helium (HNT), Enjin Coin (ENJ), Decentraland (MANA), SushiSwap (SUSHI), Nexo (NEXO), Paxos Standard (PAX), Revain (REV), Stacks (STX), Synthetix (SNX), Bitcoin Gold (BTG), Basic Attention Token (BAT), Horizen (ZEN), Qtum (QTUM), Harmony (ONE), Nano (NANO), OKB (OKB), DigiByte (DGB), Bancor (BNT), Curve DAO Token (CRV), BakeryToken (BAKE), Ontology (ONT), The Graph (GRT), HUSD (HUSD), Siacoin (SC), 0x (ZRX), UMA (UMA), Ravencoin (RVN), Quant (QNT), OMG Network (OMG), SwissBorg (CHSB), KuCoin Token (KCS), Celo (CELO), Fantom (FTM), NXM (NXM). For the latest list of altcoins, check Coinmarketcap. Remember there are 10,000+ of them. But on Indian cryptocurrency exchanges, only a few hundred may be available.
How to invest in the next Bitcoin?
Owning a basket of the Top 10 cryptocurrencies itself currently accounts for 82% of the total cryptocurrency market capitalization. And that in itself might be a good approach to invest over the long-term in this crazy asset class. We currently do not have any cryptocurrency ETF of cryptocurrency mutual funds in India. So this will have to be done manually.
While any cryptocurrency investment is risky, I would say that investing in altcoins is extremely risky and speculative. Here is how one can split the cryptocurrency portfolio between Bitcoin, Ethereum, and other Altcoins?
Another approach can be – A major chunk in Bitcoin + Ethereum (like 60-80% or more). The basic idea is to capture consistent and long-term gains via the 2 main bets in Bitcoin and Ethereum. The altcoins on the other hand provide the potential for outsized gains (5x – 100x type returns) in the near-medium term. So you can have main positions in Bitcoin (BTC) and Ethereum (ETH), but the strategy can still include a bit of diversification. This can be done by taking smaller positions in a number of alt-coins to spread out the risk and to give a better chance of riding waves of growth when different alt-coins break out. That way, you get the best of both worlds.
Do read my detailed article on the 2 major cryptos of today, i.e. Bitcoin Vs Ethereum: Which to choose? Also read How to split portfolio % between Bitcoin, Ethereum, and Altcoins?
And just as a reminder, here we are talking about % of the crypto portfolio being invested in various coins. As for what part of your overall portfolio should be put in equity, debt, gold, and cryptos, that is another matter. I suggest you read What percentage % of portfolio to invest in Cryptocurrencies? And just like mutual funds, it might be a good idea to spread your investment via monthly SIP in cryptocurrencies.
Note: These are just sample portfolio suggestions and a cryptocurrency portfolio example. This is neither intended nor should be taken as investment advice. Cryptocurrencies are extremely risky and can have a lot of volatility (like can be seen in big Bitcoin crashes).
Disclaimer – I have invested a small amount in Cryptocurrencies. But my daily life is largely unaffected by the swings of cryptocurrencies. It’s not a significant part of my overall portfolio as of now.
So that was about our discussion on What Will Be the Next Bitcoin? To be honest, it’s not easy to find the next big thing like Bitcoin. It is said that Bitcoin will replace Gold. And if you go through the Cryptocurrency list, there will be many promising candidates. But What is the best alternative to Bitcoin? Or as many like to ask, What Will Be the Next Bitcoin, only time will tell. So till then, spread your bets and go ahead and invest in the Best Cryptocurrencies to Invest in 2021 sensibly. Hopefully, a few of the Altcoins you own will be on the list of the next cryptocurrencies to explode in long term.