Best Cryptocurrencies for a Trader's Portfolio

Back in 2010, not many had heard much about cryptocurrencies. The only cryptocurrency on the market was Bitcoin, and most investors did not take it seriously.

However, crypto enthusiasts who purchased the very first Bitcoins for a few cents have become multimillionaires today.

In the last couple of years, Bitcoin is approaching its new maximum, but it has not stopped attracting investors. It is believed that the price of Bitcoin will rise to at least 250,000 USD per coin.

While Bitcoin is undoubtedly enticing, it is not the only cryptocurrency that deserves a spot in your trading portfolio.

Let’s take a look at which cryptocurrencies are worth paying close attention to, and decide whether or not you should invest your money in them.

Before diving into the analysis and committing your funds to cryptocurrencies, you need a functional and user-friendly trading platform to support your trades.

One of the most feature-rich and professional trading platforms today is MetaTrader 5. On the MT5 terminal, you will find all the necessary tools for the successful buying and selling of cryptocurrencies, including indicators and technical analysis tools.

Download metatrader 5 for pc is simple and straightforward. MT5 is also available on Android and iOS. It is absolutely free and will only take a couple of minutes to install and start operating it.

Why Cryptocurrencies?

From mid-2021, the global economy started to recover from the shock of the COVID-19 pandemic in 2020. Many mainstream stocks have shown significant growth, but they are nothing in comparison to the growth rate of cryptocurrencies.

In April 2021 alone, Dogecoin experienced a more than 1000% increase. As for Bitcoin, it has also reached a new all-time high, but El Salvador’s recognition of Bitcoin as legal tender was probably a much greater achievement.

The Central American country’s move has got the world debating and exploring the many opportunities of cryptocurrencies.

Of course, BTC is an excellent investment that perfectly complements any trader's portfolio. Some experts recommend that cryptocurrency investors keep at least 20% of their portfolio in BTC.

While BTC is full of potential, the digital currency has one major disadvantage: its high price. Not every investor can afford to invest in this cryptocurrency.

We understand the challenges of investing without a substantial amount of capital, so we are recommending you three other relatively more affordable digital assets. Read on to find out why Ether, Theta and Cardano are great alternatives to Bitcoin.

1. Ether

Ether, the native cryptocurrency of Ethereum, is the world’s second most popular digital currency. It may not be as useful as Bitcoin as a means of payment, but it also has a number of important advantages.

Many experts predict that Ether will demonstrate steady growth in the short term. It also does not take much effort and time to transfer Ether to other users.

Apart from being an investment asset, Ether can be used for other purposes, particularly for earning through stacking. By pledging their ETH at specialized venues, an investor can make good money. In addition, the Ethereum network is used to create decentralized applications.

Another attractive aspect of using Ethereum is its smart contracts. They are a type of Ethereum account that runs as programmed. Smart contracts can execute transactions automatically when certain criteria are met without the involvement of third parties. Thus, payments become faster and cheaper.

2. Cardano

Investors who choose ETH rarely bypass Cardano. In fact, the two cryptocurrencies are very similar; they even share the same developers. For example, Charles Hoskinson is the co-founder of Ethereum and founder of Cardano.

Similar to Ethereum, Cardano allows the creation of smart contracts and decentralized applications. Rumors suggest that in the near future, the Cardano system will be able to process about one million transactions per second.

If the rumors are true, Cardano may have the ability to eventually overtake Ethereum. Based on Cardano predictions, speaking from an investor's point of view, the price of this cryptocurrency (ADA) will hardly come close to that of ETH.

Cardano’s affordability is a huge advantage because it makes it accessible for investors with different budgets.

3. THETA

To predict the dynamics of the value of a cryptocurrency, it is necessary to look at what the digital currency can offer the world, and the prospects of its development.

THETA is different from any other cryptocurrency. Its blockchain network Theta makes it possible to organize uninterrupted and fast streaming of peer-to-peer videos. The Theta development team targets and takes advantage of the fact that many companies have to put up with expensive, low-quality video hosting.

Theta claims that it can take video streaming to a whole new level by making it much more affordable than before. The idea is that its global network of users can share their spare bandwidth with other devices. For such initiatives, users will be rewarded with THETA tokens.

By April 2021, the value of THETA rose to 14 USD per token. This might not be a significant figure, but back in 2020, the value of one THETA token was less than 1 USD.

This shows that THETA has good prospects for growth, especially if you consider the fact that video streaming is at the peak of its popularity. The idea behind the Theta network is very promising and in demand.

The Best Crypto Trading Strategies

Arbitrage

The simplicity and efficiency of arbitrage trading are liked by many crypto traders. The essence of this strategy is quite simple: a trader buys a cryptocurrency when its price is low and sells it when its price increases.

Let's look at an example of arbitrage trading in the cryptocurrency market. Let’s say you purchased Bitcoin for 50,000 USD on one of the exchanges. You noticed that on another exchange, you could sell Bitcoin for 53,000 USD. You went ahead and sold your Bitcoin, earning 3,000 USD.

Swing Trading

Swing trading is a strategy by which traders seek to profit from price movements in the short to medium term. The idea is to catch any "swings" in the market that may occur over days, weeks or months.

There are two fluctuations that traders pay attention to:

• Swing highs - when the market peaks before a pullback, which provides an opportunity for a short trade.

• Swing minima - when the market falls and bounces back, providing an opportunity for a long trade.

Successful swing traders typically use technical analysis to observe short and mid-term charts to track daily and weekly trends. Using fundamental analysis is also important because economic events can often occur over several days or weeks.

Day Trading

Day trading aims to take advantage of market volatility over shorter time frames of hours rather than days or weeks.

Day traders identify market trends and trade with the prevailing sentiment until support or resistance levels are reached or until a predetermined price point is reached.

Day trading can be time-consuming and requires great flexibility and the ability to react to rapidly changing market events.

Scalping

Scalping is making small trades with a minimal time duration for a small profit.

The time duration of scalping usually lasts no more than an hour. In this trading strategy, the number of trades is more important than the profit from a single trade. Scalpers do not seek large profits and cannot afford to wait for the market to turn around to reduce losses.

Scalping should never be practiced during uncertain times. The best type of market for scalping is a quiet one with limited volatility.

Reverse Trading

Reverse trading is considered one of the best trading strategies for cryptocurrencies. It targets changes in the general trend on the market.

The strategy is to find the exact moment when the trend is about to change. If the coin has been bullish for a while, a back trading proponent will look for the time when the trend reverses and open a trade accordingly.

Another interesting version of reverse trading is to speculate on the highs and lows of the day. The risk of using this strategy lies in misprediction. Whatever cryptocurrencies you choose to trade and whatever strategies you employ, you must always manage your emotions and capital effectively. Otherwise, any strategy will turn out to be unprofitable.