Cryptocurrencies to Watch in the Second Half of 2021: Ethereum, Litecoin, Cardano, Dogecoin and Bitcoin – How Do They All Compare?

Last Updated on June 29, 2021

MyFinancialTimes is a reader-centric site. We may receive compensation from the products and services we mention or recommend in this story, but the opinions are the author's own. Remuneration may impact where offers appear. We may not include all available products or offerings. To learn more you can visit our advertising policy and editorial policy.

Cryptocurrencies have suddenly become suspect in 2021. Bitcoin briefly crashed for the first time since January dropping sharply below $30,000, a number some analysts use to predict its future. The selling spilled over to other coins such as Ethereum, currently the second-biggest digital currency by market value, and Dogecoin, a meme-inspired, light-hearted joke crypto that at one time had investors saying “joke’s on you.”

With wild gains and heartbreaking losses, who can predict the cryptos to watch for the rest of 2021? “Bitcoin is now more than 50 percent lower than its all-time high set in April. When investing in cryptocurrency, it’s important to remember that volatility is the name of the game,” James Royal, an analyst at Bankrate.com and author of The Zen of Thrift Conversions, said.

The price of cryptocurrency is driven heavily by trader sentiment, which can swing from rabid optimism to doom and gloom on any given day. But all is not lost. There are still five cryptocurrencies worth watching in the second half of this year.

Bitcoin

Bitcoin was developed in 2009 because of a white paper idea on peer-to-peer network electronic payments. Bitcoin isn’t issued by banks or backed by government. They are transactions recorded on a ledger powered by enormous computing power known as the blockchain.

Bitcoin can be exchanged for traditional currencies. The exchange rate is typically what attracts its investors. The most popular platforms for buying and selling Bitcoin include Coinbase, Kraken, and Gemini. Once you sign up and link a payment method, you can buy and sell Bitcoin and store your digital assets in a cryptocurrency wallet. You can also buy Bitcoin via PayPal.

Proponents think Bitcoin is a robust asset like gold. Detractors say its rise and fall are on par with gold as well as any diversified portfolio of bonds. However, Bitcoin follows its own supply and demand drivers and may be a way for investors to mitigate risk. Governments could outlaw it or substantially curtail it as China has recently announced it would do.

shutterstock 795136543 e1624421416930
The bitcoin selloff is worrying investors and creating huge ups and downs. Should you buy, sell or wait it out? Photo credit: Shutterstock.com

Ethereum

As mentioned above, number two in digital market value, and created in 2015, Ethereum is a coin of a different face. More preferred than Bitcoin, miners with Ethereum blockchain work to earn ether called crypto tokens. The objective is the same — exchange shares, materials, assets, and valuable things through smart contracts, which are code throughout the blockchain network. Ethereum claims it can decentralize, trade, secure, or codify just about anything. It’s partnered with Microsoft on Microsoft Azure cloud to provide developers a single-click blockchain environment.

Litecoin

Litecoin, which was founded in 2011, has become a top currency in digital payments. As a money exchange, it’s an open-source global payment network that supports both online and offline peer-to-peer internet currency. It’s the third-largest cryptocurrency by market cap and has been referred to as the silver to Bitcoin’s gold. Litecoin can produce four times the blocks of Bitcoin and allows 4x the coin limit, making it an attractive alt to Bitcoin. However, because it uses Scrypt as its algorithm for proof of work, mining requires significantly more processing power.

Cardano

The first platform in the industry to be developed by academic researchers and scientists, Cardano uses an open source, peer-reviewed code. With its two-layer platform, one to conduct transactions and the other for smart contracts, Cardano is a proof of stake (POS) blockchain platform rather than a proof of work (POW) platform and is designed with efficiency in mind.

Its development is continually informed by scholarly academic research and its cryptocurrency is called “ada.” Cardano is considered an updated version of Ethereum and was founded by one of its co-founders in 2015. It’s poised to provide banking services to the world’s unbanked.

shutterstock 1915103179 e1623450961412
Too risky? Investors are trying to figure out whether they should invest in Dogecoin this summer – and, if so, how much. Photo credit: Shutterstock.com

Dogecoin

Created in 2013 as a joke about the mispronunciation of a Shiba Inu dog, Dogecoin’s (pronounced Dohj coin) sarcastic beginning quickly surpassed its mockery with gains of 15,000%, quadrupling the gains on the S&P 500 since 1998. Tweets from Elon Musk like, “Who let the Doge out?” skyrocketed the crypto to one of the top four cryptocurrencies and was dubbed the Elon effect.

What’s more, the Doge community remains loyal to the joke coin that’s traded on platforms like Wellbull Financial, Gemini, and the Robinhood app. Dogecoin can be produced in unlimited quantities. The supply could be infinite, casting doubt on its long-term value. For the love its community has shown the open-sourced peer-to-peer cryptocurrency, experts say scalability and security issues will need to be addressed to increase its intrinsic value.

No matter the cryptocurrency highs and lows to come, investors should know the risks of what they own, and that its history of precipitous drops followed by record highs is no guarantee of what cryptocurrency will do in 2021 or beyond.