The Most Volatile Cryptocurrencies in 2021

Every year is filled with unique challenges, and 2020 was not different, mainly due to the outbreak of the COVID-19 pandemic. The past economic factors will likely adversely affect cryptocurrency in 2021.

We know that many people need to know the digital currencies that are most at risk, but they lack the time and resources to execute extensive research. That is why we have done the hard work and discovered the most volatile cryptocurrencies this year. Read on for the top ones:

ETHEREUM (ETH)

From January 2020 to the end of the year, Ethereum trounced Bitcoin with approximately 750% return.

Ethereum holds several technical advantages over many established digital currencies. It acts as a contract rather than a coin, making it more like Alphabet's Google Wallets or Apple's Apple Pay. Moreover, it solves the thorny issues of speed and has an unlimited supply.

However, Ethereum tends to rise and fall, depending on the prevailing times. Currently, the correlation between ETH and the S&P 500 is 64%. In other words, stocks determine close to two-thirds of Ethereum's monthly returns. When the stock market tumbled 30% on March 20, ETH provided no cushion. A few days later, the digital asset lost more than half of its value. So, despite the present gains, Ethereum remains unpredictable and volatile.

STELLAR (XLM)

At the time of writing this article, Stellar is among the top 10 cryptocurrencies by market capitalization. You can use it to create, send, and trade various types of digital money.  

Nonetheless, only a few people invest in stellar since it is a non-profit organization. The lack of resources can negatively impact its price. There are a few exceptions. The recent decision to take up a project to offer financial services in remote islands of the South Pacific may put the cryptocurrency in the spotlight and increase its price in 2021.

People's perception that Stellar is a hard fork of Ripple exposes it to cutthroat competition from the other altcoins, increasing its volatility.

The platform's plans to become a leading digital payments solution could work in its favor. Modest predictions suggest that the coin could be stable at approximately $.06 in 2021. However, given the impact of its social mission, the competing coins, and its possible adoption as the go-to-platform, Stellar could be one of the most volatile options in 2021.

BITCOIN (BTC)

New digital assets come and go, but Bitcoin has never gone out of fashion. The cryptocurrency surprised everyone by the end of November 2020, when it hit $ 19,857 for the first time. The price increased significantly and then slid back below $35,000 in the early part of January 2021.

Will the performance continue to improve? Well, from past performance, we can predict that it will remain volatile. However, the coin's performance in 2020, when the COVID-19 pandemic ravaged global economies, indicates that its price is set to continue increasing.

While Bitcoin seems to be one of the most volatile investment options, individuals and institutions should look for ways to protect their capital. To do that, they should assess the following Bitcoin price drivers:

• Growing institutional demand
• Increasing enactment of monetary policies
• Rising inflation

LITECOIN (LTC)

Litecoins has always been among the top 10 cryptocurrencies, and that will likely continue in2021. When the platform launched the first decentralized fantasy game, LiteBringer, the entire blockchain benefitted. The transactions exceeded 130 000 right after the launch, and that could lead t0 a price increase.

Litecoin's maximum supply is 84 million, and this scarcity makes it a safe harbor for inflation and depreciation.

RIPPLE (XRP)

Ripple was designed to facilitate and transform payments across international boundaries. From its early days in 2013 to date, it has been getting attention from critical financial institutions.

In 2021, Ripple's price could increase if its plans to be an alternative to SWIFT succeed. The change could equip the cryptocurrency to solve the following issues:

• Speed
• Cost
• Risk management
• Security
• Traceability

With the increasing European Commission's support for developing a new legal framework and the transition to digital finance, Ripple prospects seem higher in 2021 than ever.

BITCOIN GOLD (BTG)

Bitcoin Gold is easier to mine than Bitcoin, but it is one of the most volatile market options. Its price was peaking more than $500 when it appeared but dropped to about $140 barely two days later. It has been decreasing and increasing without notice over the years.

In 2021, we believe that Bitcoin Gold will follow the same common tendencies, given that the cryptocurrency market remains bullish. The COVID-19 pandemic has weakened fiat currencies, and Bitcoin Gold is likely to grow in such a climate, as well. The number of people who trust the traditional banking system has decreased.

DASH

DASH focuses on digital cash payments. It was built using the same codebase as Bitcoin. It processes transactions in as little as 1.5 seconds and is fully anonymous. In 2021, its price could go past the $120 mark. However, the price will likely keep surging and dropping throughout the year as per the past performance.

BITCOIN CASH (BCH)

Bitcoin Cash emerged on the cryptomarket in 2017, and the developers touted it as a faster and more scalable blockchain. As an altcoin, its performance depends on Bitcoin. When the COVID-19 pandemic broke out, we witnessed Bitcoin made losses of as much as 40% daily. However, the situation quickly changed, and Bitcoin began to make profits. Bitcoin Cash followed the same pattern.

So, in 2021, Bitcoin Cash's volatility will depend on the growing institutional demand of Bitcoin, the increasing enactment of better monetary policies, and the rising inflation.

Wrap Up

As the mass adoption of the most volatile cryptocurrencies is a matter of priority for most people, 2021 will be an incredible year for investors and traders who understand the factors influencing their price. You can take advantage of volatility to make profitable trade within a short period, though remember that trading carries risks.

There’s good news though. We have all of the above cryptocurrencies on Swapzone.io, a platform that allows you to easily exchange assets at fixed rates. Check out how it works here.