The creation of Bitcoin gave way for other cryptocurrencies to ever exist. These other cryptocurrencies are what we popularly know as Altcoins. They have the same fundamentals as Altcoins, with only a few Altcoins being popular. With thousands of Altcoins available, which means more options for investors and also more confusion on the right choice to make, which brings us to the question “Should I invest in BTC or Altcoins?”
Let’s get familiarized with a quick explanation of some important terms;
is a virtual/digital currency created by Satoshi Nakamoto. It was invented in 2008 and began to be used in 2009. It uses peer-to-peer technology to facilitate instant payments without going through a financial institution. It is independent of the central bank, and new units of currency are generated by the computational solutions of mathematical problems. When it comes to cryptocurrency, Bitcoin is the king, with a market dominance of 40% and it does not seem it will get overthrown soon.
ALTCOINS is formed from two words; Alternative (meaning other possibility/choice) and coin. It simply means all other cryptocurrencies except Bitcoin. The first Altcoin to be created is Litecoin in 2011. It is a project fork of Bitcoin. Thereby opening the way to the creation of more Altcoins with different uses. Altcoins with strong fundamentals will face difficulty catching up with Bitcoin.
TYPES OF ALTCOINS
They are classified based on what they offer, some of the types include;
- STABLECOINS: They are designed to have a relatively stable price, typically through being pegged to a commodity or currency or having its supply regulated by an algorithm. It has a total market cap of approx. $148billion according to coingecko.com. Examples are; USDT, BUSD, USDC, etc
- MINING-BASED coins: Mining is simply a way of creating new coins. Examples are; Ethereum, ZCash, Monero, Ethereum Classic, etc. A coin like BNB is not mined.
- GOVERNANCE TOKENS: They allow holders certain rights within a blockchain, such as voting for changes to protocols, and also give them a say in decisions of a Decentralized Autonomous Organization (DAO). They are considered to be utility tokens. It has a total market cap of $13.1billions according to coingecko.com at the time of writing this article. Examples are; UNISWAP, AAVE, MAKER, XEC, etc
- MEME Coins: They are joke-inspired. There was a meme coin season during April and May 2021, where a lot of pumps were witnessed during that period. It has a total market cap of $14.9billion. Examples are; Dogecoin, Shiba Inu, Baby Doge Coin, etc
Let’s check the Risk and Rewards involved in Bitcoin and Altcoins;
: Altcoin would give you a better Return on investment when compared to Bitcoin. You can realize a 1000% profit from an Altcoin. It has happened before and it will continue to happen. We have seen different Altcoins make an ROI as high as 4000% and even above like; BNB has rised from an ICO sale price of 15 cents per token to $270 at the time of writing this article and an all-time high price of 693 per dollar. ETH has risen from $0.311 at its launch price to a current price of $1285 at the time of writing this article. Thousands of other Altcoins have attained and surpassed this feat also. And more will still happen if you know your way around. The question is, can Bitcoin still do 100x from its current position? Yes, It’s possible in the long run but hard. But It’s pretty easy to see a lot of altcoins that can be 100x if you have a good eye. When it comes to a better reward ratio and Return on Investment, Altcoin is better.
: When it comes to the risk involved, Bitcoin is very much less risky than Altcoins, Bitcoin has survived all the storms and stood strong for more than thirteen years now. An altcoin is riskier than Bitcoin, A lot of Altcoins have come that were not able to survive the test of time, and they withered down. With an increased case of rug pull, We have seen a lot of cryptos down the drain, Cryptos like Terra, Onecoin, and plenty of other cryptos, and more surprising the instability of some stablecoins, like the UST which lost 95 percent of its value at $1 to $0.045 presently. All of this shows the risk involved in investing in Altcoins.
: You should invest and split your investment in both Bitcoin and Altcoins with stronger Fundamental and better use cases. You would need to spare enough time to make research before choosing the Altcoin you want to invest in. You can make use of coinmarketcap.com to check out various Altcoins and their supply. Also make sure you check their roadmap, Read the whitepaper, check out their community and the problem they intend to solve.
Remember, through Altcoins You can turn $5000 to $1,000,000, same way You can also turn $1,000,000 to $500 through the same Altcoins.
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