TOP 5 Crypto Picks For 2021

There is no doubt that we appear to be in the next crypto bull run. Bitcoin is already at it’s new all-time highs and the market appears poised to break some really exciting levels. This is not only good for Bitcoin it is a godsend for the altcoin market. For those that have followed the crypto markets for some time they'll know there's usually a pivot to altcoins once Bitcoin has rallied. However given how more sophisticated the markets have become, it's unlikely that this rising tide will lift all boats. Only some altcoins are likely to capture those gains you're striving for. This then begs a very important question. Which ones? Well that's exactly what I'm going to cover in this chapter. I'll be taking you through five of my top altcoin picks for 2021. Picks that are not only well diversified across tech, market cap and use cases, but altcoins that really could explode this year. This is not a financial advice so please only read this as educational, and I must implore you to do your own research.

It's worthwhile to give you a quick overview of how I've chosen these picks. It's an important insight into my thinking of broader portfolio diversification and allocation. The way I like to approach coin picks is the same way I approach my portfolio. It's all about diversification. Diversification to underlying use cases, market cap and sector. This is important because oftentimes despite how good a project is on paper. The sector within which it operates may not be as hot however if you've chosen projects in different sectors you are diversifying your sector risk. Something else that I try to diversify is the market cap of the coins in the list. As you'll see with some of these picks some have a relatively high market cap within the top 50 whereas others are more of your moon shots with market caps below the top 200. This is important as you'll know that the chances of making a 50 X return on a token are much more likely on a low cap gem than they are on a promising yet high market cap coin. Why? Well, maths. But of course low cap coins are inherently more risky and volatile. The risk of the token falling through the floor is higher on smaller projects than it is on higher cap and more established ones. That's a bit of context for these picks. I should also point out that these are presented below in no particular order so don't read too much into that. But whatever you do please do try and pay attention to why I've chosen each of these coins.

First pick is Monero. Apart from having the most cutting-edge cryptography protocols on the market, it also stands for something much more fundamental; financial freedom. Truly anonymous peer-to-peer digital cash; Satoshi's vision. It's a pretty well established crypto that's been around for about six years now however it's been in the news quite a lot recently and that's because of who has it in their sights. That's right the powers that be are not too happy about pure financial freedom after all. I'm talking prosecutors, regulators and other large enforcement agencies with three letter acronyms such as the IRS, NCA or even EC3. Therefore it’s pretty clear that Monero has some powerful enemies so you may be wondering how on earth I can put it on my list. Well one man's meat is another man's poison. I take the view that this intense focus by these agencies shows that they view Monero privacy enhancing technology as a threat. A threat that they struggle to control. This can only mean that it's working as intended and despite having so much thrown at it by all of these players, they've still not been able to crack the encryption and de-anonymize users. Ciphertrace has developed a patent that helps to track transactions, but this is purely a probabilistic approach. It uses well-known techniques in transaction clustering to hone in on likely address flows but it's far from cracking the algorithm. But apart from this there are a number of other reasons as to why I'm so bullish on Monero. Firstly as mentioned the privacy tech is supreme. Secondly, this tech is constantly evolving as the developers work to harden the protocol and secure its privacy. Speaking of those devs, they are some of the most hardcore cypherpunks in the crypto space. A broader collective of idealistic individuals all driven by their goal of preserving financial freedom.I should also point out that all funding for RND on the Monero network is coming from the community, no outside interests. Another reason why I'm more bullish on Monero than other privacy coins is because it has the highest liquidity among them. This is despite the fact that exchanges have been put under pressure on privacy by default coins like Monero. The fact of the matter is that Monero is still a very popular cryptocurrency. There will always be a market for it and an exchange willing to service it and even if the centralized exchanges make it difficult to use exchange XMR, decentralized alternatives will eventually fill the breach. That's because one of the most promising community-funded RND programs that have been worked on right now; is XMR-BTC atomic swaps. This will allow users to easily exchange their Monero for Bitcoin and vice versa cross chain. A seamless bridge from where the all-seeing eye reigns to where it is blind. I should also note that Monero is actually one of the more decentralized proof-of-work cryptocurrencies. This is because of a number of changes that were made to its mining algorithm. As you'll no doubt know, centralization is one of the biggest risks to a distributed system. For example there are a number of fears around the centralization of Bitcoin's mining hash rate in China. Finally, I'm bullish on Monero because of the state of the world. If there's one theme that's emerged last year, is that privacy is under assault from anti-encryption bills to mandatory exchange reporting requirements, from the elimination of cash to the launch of central bank digital currencies. As more people realize that these freedoms are being rug pulled from under them, they will gravitate to solutions that preserve said freedoms.

The next pick would be Algorand. We all know that there's a lot of hype around smart contract blockchains. You need to look no further than the excitement around Ethereum 2.0. It's one of the reasons that it makes up such a big chunk of my portfolio. However one size does not fit all and it won't be a matter of winner takes all. That's why it could be wise to diversify in your allocation to other developer friendly blockchains. There are a lot of promising networks out there but Algorand is one of the more intriguing which has been on my radar for quite some time. Let's start with a bit of an overview. Algorand is a blockchain that has actively set out to solve the pretty well-known blockchain trilemma. More specifically they want to develop a blockchain that is scalable, secure and decentralized. How they plan to achieve this is down to their highly performant consensus mechanism. It's called pure proof of stake. The main benefit of this is that Algorenn's technology finalizes blocks in seconds and provides immediate transaction finality while preventing forks. Why am I bullish on Algorand? Well let's start from the top. The team behind this project are like a who's who of cryptography. It's comprised of some of the smartest brains in the field from universities like MIT. The founder is a professor called Silvio Mccarley who is famous for first conceiving zero knowledge proofs. That fundamental technology you hear about from so many cryptocurrency projects. He also won a Turing award for his work on this. But it's not just brain power backing the project. It also has a lot of capital. Algorand actually has a separate VC arm that has raised a lot of funding specifically for the incubation and adoption of projects building on Algorand. You can think of it as analogous to consensus for Ethereum or Emurgo on Kardano. This Algorand entity has already incubated a number of projects and as we know adoption is key to utility demand for a blockchain. Speaking of adoption it was recently announced that the USDC stable coin has been integrated into the Algorand blockchain. This means that USDC users will be able to send the stable coin on the Algorand network cheaper and faster than would be done on Ethereum for example. It's also no secret that USDC is becoming the de-facto stable coin globally. For example you had the recent monumental news that Visa would be offering USDC settlement to all its 60 million merchants. All of this transaction demand will need a super-fast and efficient blockchain to be settled on. All of this transaction demand on Algorand will of course naturally lead to a demand to pay for the transactions which are paid in Algo. While we're on the subject of utility demand for the blockchain I should also point out that Algorand is actively trying to court the DIFI sector with their unique smart contract language called Teal. (Transaction Execution Approval Langauge) It's a non-turing complete language which although it limits functionality is often considered safer to write and execute. Perhaps it could be an attractive alternative for enterprise developers worried about solidity smart contracts. Algorand is impressive but why has the price been lagging? Well it mostly comes down to an initial oversupply out of the listing in 2020. They seemed to have sold quite a bit in the early auctions and when these hit the market the price slumped. However they have engaged in a number of buybacks and have redesigned their tokenomics. I should also point out that it is a staking blockchain which means the more staked, the less circulating supply. All price accretive. So Algorand could be an attractive smart contract play in 2021.

Next token on my list is called Theta. Theta is a project that is looking to completely transform the way we think about streaming and online content delivery. More specifically, they want to decentralize and democratize it. The Theta blockchain is the only end-to-end infrastructure for decentralized video streaming and delivery currently on the market. This type of scale is all possible thanks to some pretty mind-blowing streaming and blockchain technology. Firstly, streaming itself is really hot. You need to look no further than YouTube and Twitch with billions of users. These are all on centralized platforms and use centralized content delivery networks so you can see why Theta is appealing here. Secondly this is not just smoke, Theta is actually streaming content. They started with e-sports but have since moved on to Poker, Cryptocurrency events and have also partnered with MGM to briefly stream Hollywood classics. You can also add the Space-X launch and K-Pop events to that list. I also want to note that Theta has a strong team and even stronger advisors. These include the likes of Stephen Chen a YouTube founder and Justin Kan the founder of Twitch. Theta has also received investments from Samsung. I should also point out that in September 2020, Theta labs got a US patent for their decentralized blockchain streaming technology formally titled “Methods and systems for a decentralized data streaming and delivery network.” Patents help secure business modes. When it comes to the tokenomics of Theta, there are two tokens herel; Theta and Theta fuel. Theta has a cap supply and all tokens are now in circulation. This means that you're not at risk of any dumps from investors or team members. Also note that 55% of all the Theta tokens are being staked which means less token supply on the market. When staking these Theta tokens you'll earn Theta fuel or T-fuel. T-fuel is used as gas for smart contracts and once used will be permanently destroyed. So not only can you own rare and limited Theta tokens as well as stake them, but you will also earn T-fuel tokens which should become more valuable over time as they're burned, assuming protocol inflation doesn't outweigh it. Something else that you should note from a utility demand perspective is that Theta smart contracts will be compatible with Ethereum. This means that Theta could also bring in a bit of that hot DEFY flavor that Ethereum has been the recipient of 2020. This utility demand could drive price. There's one more thing waiting in the wings that could boost that Theta price. That is a potential Coinbase listing. In July of 2020, the exchange placed Theta on their list of tokens that they are considering listing and we all know the impact of the infamous Coinbase pump. So I think Theta could be an attractive and diverse play for your 2021 portfolio.

Now I want to move on to my next pick and this is a medium cap gem. The Injective Protocol is a decentralized derivatives exchange that's built on Cosmos. It was one of the most exciting DEX launches 2020 and has already picked up quite a bit of steam. They are trying to create a paradigm shift in the DEX space. Quite simply, it will allow users to trade spot swaps and futures in a completely permissionless way. They'll also be able to structure their own derivatives on the platform and create a market for it. Anything that has a price, users could eventually be able to issue their own decentralized derivative contracts for. Technically, it's implemented as a Cosmos SDK module, and is built with Ethermint. This basically means it has one major advantage over most of the Ethereum based DEX-s on the market; throughput. this is because it's a layer 2 cosmos zone and hence does not have to put up with the congestion that other Ethereum based DEX-s do. Moreover, because it's built on Cosmos you can exchange more than just ERC 20 assets. This basically comes down to the nature of how Cosmos stones operate. Instead of one singular blockchain, there are a number of independent and interoperable blockchains. Clearly, I am bullish on the tech behind the Injective Protocol but there are a number of other reasons why it's one to watch in 2021. Firstly Injective Labs is backed by some pretty well-known VC-s in the space. These include Pantera Capital and Binance. Secondly, the team is also quite accomplished and they've actually been working on the protocol for quite some time; since 2018 in fact. More recently, they have released their Solstice Testnet and it's looking just as hot as the Summer Solstice. The amount of community enthusiasm around this Testnet launch was quite intense. It also attracted some media coverage with stories on the like of Techcrunch and Cointelegraph. Turns out that this was only the first salvo though and the injective team recently released a version two of their Testnet only eight days after version one was released. If it all goes to plan on the test net then we're looking to a much hyped mainnet launch in 2021. When it comes to the INJ token itself, it actually has some pretty favourable tokenomics. There was only a limited percentage; only 9% of the total supply. There was such high demand for it in the IEO that the price immediately rallied once trading commenced. I also would not worry too much about any of those private sale or founder tokens flooding the market anytime soon. That's because the token unlock schedule appears to be quite reasonable. No cliffs over here, and once the main net does launch, these tokens will be used in order to pay transaction fees. These fees are then burned which of course leads to a reduction in circulating supply. At that tokens taken off the market to stake on the network and you have two factors which are long-term price positive. That's not even including the potential demand that there could be to hold the token to take part in decentralized governance. As we've seen from the DEFI space, the opportunity to take part in decentralized governance of the protocol is an important valuation metric in the token. Apart from all that, INJ has a lot more upside potential than the first three picks and that's because of its market cap. Higher return multiples are likely for smaller cap coins and speaking of market cap it's time to reveal my micro cap moonshot pick of 2021.

BarnBridge is a DEFI project is a mind-blowing protocol. Basically it's a project that's looking to tokenize risk. So what do I mean by that? Well, they're trying to isolate and tokenize different yield risks in the DEFI space. Essentially it works by pooling funds on the platform and then allocating these funds to different DEFI protocols. These include AVE, Compound, dydx, Synthetics etc. Then once the funds have been pulled, they will tranche the yield such that it can be tokenized individually. This therefore means that DEFI investors are able to invest in different risk tranches based on their yield and risk tolerance. This is called their smart yield product and it was the first one that they launched. However they're also working on a similar product called smart alpha. This will be more complex and won't be based on tranching DEFI yield or interest but by separating out token returns into different risk tranches. Essentially risk exposure will come from price instead of yield. All you need to know though is that it's a completely unique project in the DEFI space. Not only is it matching users up with their desired risk tranches but it will also allow users to invest in fixed interest rate defy instruments; certainty around that yield. So why am I bullish on BarnBridge? Well, firstly it's well positioned to take advantage of the massive shifts we're seeing in DEFI. The total value locked into DEFI protocols has gone parabolic in 2020 and I don't think it's likely to slow down in the next few years. Given the unique nature of BarnBridge's protocol, it's likely to be that much more attractive than all the plain vanilla lending platforms and DEX protocols. Secondly the project has also been backed by the founders of both Arve and Synthetics who no doubt know a thing or two about growing a DEFI protocol. They only raised a minimal amount of initial seed funding and ran a pretty fair launch of the protocol. There was no ICO and 68% of the bond token will be distributed to the community through a number of yield farming and liquidity incentives. These governance tokens will then be used in order to vote on important governance proposals on the platform. There are plans in the pipeline to eventually release smart contracts governed by the DAO where users can define what they would like the core contracts to do. This will mean that the members of the BarnBridge community may have a say in how risk is tranched and which protocols to invest in. So much like the case of wi-fi where token holders make economic decisions which progresses the entire yearn finance platform forward, bond token holders will be able to do the same. So this adds fundamental value to the token. Apart from that we can also just look at the broader tokenomics. There will only ever be 10 million Bond tokens distributed. Once they've been fully distributed in about two to three years, you won't be able to mine any more of it. Hence you have an asset with a naturally limited supply. Think about yearn finance for example, once those 30,000 wi-fi tokens were distributed, they became pretty valuable. Moreover, the BarnBridge community seems to be quite engaged in the project and two days after yield farming went live, there were already 200 million dollars locked into the protocol. The Devs are also hard at work building out those lending products which are likely to go live within the next few months. If these products do truly live up to its expectations, BarnBridge may be a DEFI darling of 2021. When it comes to those Bond tokens, they are currently only available on Uniswap for trading. Although if you have some free stablecoin capital then you could also join their liquidity pools and farm some Bond. Given the currently low market cap of Bond, the upside potential from here is quite substantial. I will of course caveat this all and say that it is still a new protocol and as such there are risks. These are my top five picks for 2021. These were carefully curated to give a well-diversified altcoin play for 2021. So I would therefore discourage you from yellowing all in one of these particular projects. You open yourself up to idiosyncratic risk which cannot easily be hedged away. I also will say that this list is not the only coins or tokens I have my eyes on for 2021. There are many other interesting projects which I'm also bullish on but in this chapter I only wanted to cover my top 5 picks.