Updated: Oct 1, 2021
Crypto is a confusing space for new investors because it can take weeks, months, and even years to fully understand how the different projects coexist with each other. I wanted to make this post as a guide for finding solid projects that have long-standing value in the cryptocurrency space. The 3 sectors below will all have very strong narratives throughout 2021.
Decentralized Finance (DeFi)
You NEED to know about DeFi if you are investing in cryptocurrency this year. This will probably be looked at as one of the biggest no-brainer investments that can be made.
What's wrong with traditional finance?
Banks unavailable on weekends
Stock market only open during limited hours
Low interest rates
Barriers to entry (credit)
On a decentralized exchange, can someone be stopped from buying GME, AMC, or any other stock r/WallstreetBets decides to invest in? No.
Can you earn double digit APY storing your money in a traditional bank? No.
There are plenty of other problems DeFi solves but these are most relevant to my life which is why I wanted to share them. As far as investing goes, decentralized exchange (DEX) tokens will be one of the safest DeFi choices with promising upside. Purchasing one of these DEX tokens is essentially like owning share of a censorship-resistant Robinhood or <insert your favorite exchange here>. A few DEXs likely to be major players are Uniswap, Sushiswap, and THORChain.
Privacy Assets are what I'm most bullish on in the long term thanks to reading too much Julian Assange. Privacy wasn't a concern when the internet was born and the implications of that have led to the widespread surveillance we see today. Blockchain analytics companies are already working with US federal agencies and the number is growing each year.
Privacy coins allow you to send and receive transactions without publicly releasing the transaction information. The advantage here is that privacy coins are much more similar to cash than Bitcoin in the way that their previous transaction details cannot be traced. In this analogy, Bitcoin is like a permanent credit card record viewable by the public.
As far as privacy coins go, Monero could be considered the "Bitcoin" of this sector. It recently passed Bitcoin as the most widely-used cryptocurrency on the dark web thanks to it's untraceable transactions. Another privacy project that is making waves in the space is Haven Protocol (XHV). Haven is the first DeFi project built using Monero's privacy features which puts it at the perfect intersection of two different narratives.
The artist deep down in my soul won't allow me to leave NFTs off this list. NFT stands for "Non-fungible token" but don't get hung up on the name if you don't understand what that means. NFTs are basically digital collectibles that can come in the form of art, music, virtual land & items, tickets, trading cards, domain names and plenty of other areas that haven't even been explored yet. I highly encourage checking out a few projects like Rarible or OpenSea to get an idea of what these are. I'm bullish on the thought that NFTs will be the gateway for the general public to use crypto in their everyday lives without even knowing it.