The dominant cryptocurrency up till this point is Bitcoin. It’s an understandable fact since Bitcoin was the first digital currency on the scene. Developers created other coins to try to compete with Bitcoin, and in the process, the term’ altcoin’ was coined.
Altcoins can be considered variations of Bitcoin. Altcoins were developed to improve the features and characteristics of Bitcoin. However, even though some altcoins have potential, others are straight out worthless. Before a potential investor pumps money into any altcoin, it’d be best to check out altcoins resources to learn about the features of altcoins bound to progress.
In 2021, altcoins gained as much as 100,000% increases in their opening prices. This factor has attracted numerous potential investors to the scene, with some placing money on any coins that they see.
This article will explore the difference between Bitcoin and Altcoin. We’ll also take an overview of the reality of altcoin.
Making a Choice Between Bitcoin and Altcoins as an Investment
Bitcoin vs. Altcoins
When it comes to investments, Bitcoin possesses better fundamentals than most altcoins. The premier cryptocurrency is the most traded and bought digital currency. Its total value of 21 million coins exceeds the $1 trillion mark. It is also highly liquid, as more than $31 billion of Bitcoin trades occur on different exchanges each day.
On the other hand, Altcoins have a higher probability of fizzling out. Several altcoins were created for the fun of it. Even though some have topped the crypto markets, many generally fall out of the top 100 indexes. Even altcoins with solid use cases find it hard to catch up with Bitcoin, let alone altcoins with zero vision.
Bitcoin is also viewed as ‘Digital Gold’. This has led to an influx of investments from the traditional finance world since it can serve as a store of wealth. Hence, Bitcoin has more potential for long-term growth and adoption.
The Reality of Altcoin Investments
When Bitcoin rises in price, altcoins also rise in price. When Bitcoin falls in price, altcoins also fall. All alternative coins follow Bitcoin’s leading index. Nevertheless, a small crash in Bitcoin often leads to an even larger crash in altcoins.
The idea is that when Bitcoin has a huge price upsurge, money flows from profit-takers looking to gain higher percentage growth in their portfolios.
Solana, an altcoin that cost $2 as of November 2020, increased by 100 times to trade at $200 by November 2021. Dogecoin increased 130 times in May 2021 from its initial value in January 2021.
While it is true that altcoins have the potential to bring more significant returns than Bitcoin, they’re more likely to crash and lose value entirely.
Many times people have considered the viability of investing in Altcoins over Bitcoin. Even though altcoins were created as improvements to Bitcoin, the majority of the crypto market still views Bitcoin as king.
Bitcoin has more trading volume than many top altcoins put together. Nevertheless, altcoins have made bigger percentage moves in recent times. Bitcoin is considered a relatively safe investment in the crypto world. Whether you’re risk-averse or a risk-taker, you can choose between bitcoins or altcoins.