Which cryptocurrency is the best investment during 2021?

2021 is around the corner, and with Bitcoin surging and more eyes on cryptocurrencies again, it’s bound to be a hell of a year.

2020 has probably been the year of DeFi and Bitcoin. The biggest winner of them all for me was probably TrustSwap (SWAP), which I entered at $0.05 and saw an ATH of $1.65 shortly thereafter.

Not all of my picks were winners, but overall I’m happy with the returns 2020 gave me so far. The past few months, many altcoins tanked against BTC. I recently answered the question ‘Now that BTC passed $20,000, what will happen next?’. In which I spoke about BTC dominance versus altcoins.

I strongly believe altcoins will provide significant returns in 2021. But, it’s incredibly important to do proper research, apply proper risk management and set goals in advance. Without further ado, this is my game plan for 2021.

Game plan & Portfolio Categories

Reflecting on the past few months, I’ve made more returns on my short-term trades than my long-term holdings. This is mainly due to BTC surging and sucking up liquidity from the altcoins I hold. However, that is totally okay because I'm not in a rush, the fundamentals of the projects I invested in are strong and I’m confident about my picks. I have however decided to divide my portfolio in three categories: short-term trading, low-cap / riskier positions and a long-term ‘safer’ portfolio.

Short-term Trading

For short-term trading, I use the 4-hour and 1-hour timeframe to spot altcoins that are ready to bounce of key support levels, or are at key resistance levels. To either long or short the altcoin.

Because these trades only last hours, I will not share them here. However, you’re welcome to follow me on Twitter as I don’t mind sharing these trades every now and then.

Because short-term trading is higher risk, I allocated 20% of my portfolio for this.

Low-cap & Riskier Holdings

Low-cap altcoins are certainly riskier, but, are they really? For low-cap altcoins it ultimately comes down to two things: fundamental analysis and long-term outlook. I research these projects and look at project potential (product market fit), the team, communication and budget.

I’m patient when it comes to my holdings, and don’t mind waiting months or sometimes 1-2 years for an altcoin to provide me with solid returns.

I allocated 30% of my portfolio for this, currently I'm holding the following altcoins which I consider Low-cap / Higher risk:

1. EUNO : EUNO currently has a market cap of $4,600,442. I initially shared EUNO at a market cap of $3,000,000 (+53%). EUNO is therefore still considered low-cap and fits the profile of this portfolio. I recommend you to read my research report if you’re interested, to learn more about the project and upcoming items. I strongly believe EUNO has the potential to provide huge returns in Q1 2021.
2. EFX: Effect AI has been in my portfolio for a long time now. EFX currently has a market cap of $4,924,678 and is therefore considered low-cap. EFX saw a massive surge to $0.125 earlier this year, before falling down back to $0.02 again. Unfortunately, the team saw interest but did not manage to capture momentum. Chris and the team have the vision and skills to achieve their goals and therefore I decided to continue to hold my EFX. Effect AI had an End-Of-Year stream yesterday in which a lot of upcoming items were shared.
3. Mantra DAO (OM): I initially invested in the Mantra DAO private sale. OM currently has a market cap of $13,780,896 and is considered a low/mid-cap altcoin. Mantra DAO built a DeFi platform built for the Polkadot Ecosystem with (in my opinion) huge potential. The price however has dumped back towards the sale price, due to increasing supply through staking and private sale investors receiving unlocked tokens.

   Private investors will soon receive their final batch, after which I could well see more positive price momentum for OM start.

4. LYXe: LUKSO will introduce standards and tools that will enable a new economy based on Cultural Currencies, Digital Certificates and Universal Public Profiles. LYXe currently has a market cap of $12,923,745 based on current circulating supply, with their reversible ICO ending on February 18, 2021.

   I shared LYXe in the Quora Inner Circle community earlier this year at $0.3, where we took profits at $2. I bought LYXe back around $0.6 and will continue to buy on a weekly basis up to a price of $2. I’m interested in writing a research report on Lukso, as I find this a solid mid/long-term holding with higher risk but also higher possible returns.

Long-term portfolio

My long-term portfolio hasn’t changed much over the course of the past year. 50% of my portfolio is allocated in this category and includes the following projects:

1. Presearch (PRE): PRE currently has a market cap of $6,092,453. As a team member, I put my money where my mouth is. PRE is by far my biggest holding and I strongly believe in the potential PRESEARCH has to offer to the masses. I will however not speculate on the token value, but am happy to have published an overview of the project and ecosystem on Quora (see earlier hyperlink). 2021 will bring the launch of the new decentralised node-powered search engine, search nodes, high quality search results, improved experience for advertisers, mass marketing, and much more.
2. Bitcoin & Ethereum: BTC and ETH are a must-have in any long-term portfolio and these positions pretty much speak for themselves.
3. LTO Network (LTO): LTO currently has a market cap of $29,040,046. I’ve been a huge fan of LTO Network ever since their launch. I’ve held LTO since 2018, and have swing-traded the token during the past year. Currently, I’m holding a significant amount which I purchased around 500 sats on BINANCE earlier this week. I recommend anyone to read through my research report (see earlier hyperlink) and form an opinion about the potential that’s here. LTO Network continues to see huge adoption, and recently announced a huge collaboration with the United Nations as well as a merger with VIDT Datalink.
4. VIDT Datalink (VIDT): VIDT currently has a market cap of $26,575,174. VIDT was added to my portfolio recently. I bought much more earlier today, in a dump caused by fud and complaints after the recent merger announcement. There are some uncertainties regarding token utility and value. However, as I’ve followed both LTO and VIDT for the past two years, I strongly believe this decision was made for the best of both projects and token holders were taken into account. Therefore, I consider this dump a significant buy opportunity rather than something bad. I recommend anyone to read the announcement to learn what’s to be expected in the new year.
5. Ampleforth (AMPL): AMPL currently has a market cap of $265,905,960. AMPL is a must-hold during the next bull run in my opinion. I remain a fan of their protocol and strongly believe AMPL will end up a top-20 project in 2021 with a market cap of >$1,000,000,000. AMPL is however not your typical buy and hold and has an elastic supply, I’d therefore recommend you to read my research report.

Watchlist

I’ve written about all kinds of promising projects the past year. Because I’m not holding all of them, doesn’t mean they can’t provide solid returns. I partially time the markets and have a watch list of altcoins I’d like to buy when the price is right, these include:

• Uniswap (UNI): Research report.
• Energy Web Token (EWT): Research report.
• Ziliqa (ZIL)
• GET Protocol (GET): Research report.
• Aave (AAVE): Research report.
• Quant Network (QNT): Research report.

This is my portfolio, this is my watchlist, and this is my game plan for 2021. I’ll lock in profits on the ride up during 2021, but I would be comfortable holding any of these altcoins for more than a year if need be.

Have a great rest of 2020, may 2021 be your year!

This post is for informative purposes only, I’m not a financial advisor and I currently do have a position in BTC and Altcoins. I have not been paid for this post, this post is out of personal interest.