Why Is Cryptocurrency Valuable: Everything You Need to Know

Cryptocurrency is a relatively new type of money. Why is cryptocurrency valuable? Well, like any other currency or unit of account, it’s highly valued only because people believe it has value as a unit of exchange.

Some money is backed by gold or other precious metals, others are not backed by anything. Although they have value because people make them essential and use them as a unit of exchange. Thus, cryptocurrencies were designed as a unit of exchange independent of central banks. So, why is cryptocurrency valuable? Let’s try to find out!

Why Is Crypto Valuable: First Things First

In comparison with regular money, a digital currency has much more advantages. Ordinary funds are subject to inflation, which, in addition, can be increased by the Central Bank. At the same time, cryptocurrency is subjected to an opposite process – deflation. Why is crypto valuable? Well, this is influenced by the constant growth of global production and its limited volume in the market. Thus, it creates demand, which determines the price of a cryptocurrency.

Why is crypto valuable and is gaining more and more popularity? At first, it can be quite difficult to realize that not only the State is capable of issuing money. But how was mentioned before, cryptocurrency has become an integral part of our life.  

What Makes Crypto Valuable: Key Factors to Know

What makes crypto valuable? Well, the system’s protection from the inflationary process and hacker attack increases the popularity of cryptocurrency. As a result, what started out as an experiment became real money.

After the world system abandoned the ‘gold standard’, money became dependent on the policies of their governments. Cryptocurrencies don’t have this kind of uncertainty.

What Makes Crypto Valuable?

  • Limited supply and demand;
  • Using the blockchain system;
  • Coin usefulness, ease of its use and storage;
  • Public perception of its value;
  • Bitcoin cost;
  • Mass media opinion;
  • Investors contributions;
  • Impossibility of fraud;
  • Innovation;
  • Anonymity.

Due to the fact that cryptocurrency is an emerging asset, the market is still volatile. Combined with many of the above factors, the price of digital currency can rise and fall rapidly, making it quite a risky investment. However, its pros make it suitable for making payments as well as for investing.

Most Valuable Crypto: Top 5 Coins to Know

Today we will tell you about the most valuable crypto in 2021, based on expert opinion, rating, and return on investment.

Here are the five cryptocurrencies that really deserve attention as investment, trading, or digital assets. I would also like to note that today stablecoins are of great importance since they are comfortable tools for managing funds in a decentralized space without risks associated with volatility.

Chainlink (LINK)

The most famous and demanded decentralized network of oracles is attracting more and more attention from large companies and projects. More than three hundred partners have already implemented it. As a consequence, this also increases the value of the LINK coin. The more the ecosystem develops, the more valuable the asset will be. That’s why today many investors consider LINK as a long-term or medium-term investment.

Cardano (ADA)

The project positions itself as a manufacturer of tools capable of transferring control over world systems from corporations to individuals. Cardano is a very ambitious idea. Although this cryptocurrency has existed for some time, in recent months it has significantly increased its influence and attracted the attention of investors who share the same values.

Polkadot (DOT)

The protocol allows transferring various kinds of information between blockchains, ensuring chain compatibility using a sharding mechanism. Thus, on the basis of Polkadot, it’s possible to create more functional services and apps. The DOT token is used for decentralized project management and the creation of unified chains.

Bitcoin (BTC)

The very first cryptocurrency is the most expensive, capitalized, and well-known coin in the world. Despite a number of cons, Bitcoin continues to be a promising investment. This is evidenced by the interest of institutional investors and support from large companies and media personalities.

Ethereum (ETH)

Of course, our list cannot do without Ethereum. Vitalik Buterin’s crypto has been recording new all-time highs since December 2020. And there is a logical explanation for this. The development team has finally begun work on the transition to Ethereum 2.0. This attracts large investments and increases user interest in ETH. As a result, the price rises. And, apparently, it will continue to grow.

What is the most valuable crypto? Feel free to share your thoughts in the comments!

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