By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Sign In
Web3,Blockchain & Metaverse Education Media PlatformWeb3,Blockchain & Metaverse Education Media Platform
  • Home
  • News
    • Cryptopedia
      • Blockchain News
      • Bitcoin News
      • Ethereum News
      • Altcoin News
    • Latest Metaverse & NFT News
      • Metaverse & NFT Games
      • Virtual Land
    • Exchanges News
    • Policy & Regulation
    • Web Stories
  • Press Release
    • Sponsored Article
    • Submit Press Release
  • Interviews
    • Opinion
  • Expert Alliance
    • About Expert Alliance
    • Expert Alliance Benefits
    • Experts List
    • Apply for Expert Alliance
  • Guide
    • NFT Review
    • Game Review
    • Submit NFT Project
  • Videos
  • Events
Search
  • Advertise with us
  • Media Kit
  • 365 Media Plan
  • Submit Press Release
  • Submit NFT Project
© 2022 NFTStudio24.com News Network. All Rights Reserved.
Reading: Bitcoin vs. Altcoins: Which Is the Better Investment?
Share
Web3,Blockchain & Metaverse Education Media PlatformWeb3,Blockchain & Metaverse Education Media Platform
Search
  • Home
  • News
    • Cryptopedia
    • Latest Metaverse & NFT News
    • Exchanges News
    • Policy & Regulation
    • Web Stories
  • Press Release
    • Sponsored Article
    • Submit Press Release
  • Interviews
    • Opinion
  • Expert Alliance
    • About Expert Alliance
    • Expert Alliance Benefits
    • Experts List
    • Apply for Expert Alliance
  • Guide
    • NFT Review
    • Game Review
    • Submit NFT Project
  • Videos
  • Events
Have an existing account? Sign In
Follow US
  • About us
  • Advertise with us
  • Media Kit
  • 365 Media Plan
  • Submit NFT Project
  • Careers
  • Contact us
  • Privacy Policy
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
  • Global
  • Japan
  • South Asia
  • Partners
  • Community
HOME > News > CRYPTOPEDIA > ALTCOINS NEWS > Bitcoin vs. Altcoins: Which Is the Better Investment?
ALTCOINS NEWSNews

Bitcoin vs. Altcoins: Which Is the Better Investment?

NFT Studio 24
Posted NFT Studio 24 November 19, 2021 342 Views 8 Min Read
Updated 2022/02/08 at 5:02 PM
Ethereum,Polkadot, XRP, add up to 5%
SHARE

The cryptocurrency market is still dominated by Bitcoin (BTC), but there are many other competing digital assets, called alternative coins, or altcoins. With so many alternatives out there, investors need a clear idea of how each altcoin differs from Bitcoin and what it can offer in a portfolio.

Contents
What Are Altcoins?Differences Between Bitcoin and Alternative CoinsInvesting in Altcoins

Altcoins can be thought of as variations of Bitcoin. In other words, developers create altcoins to improve the functionality or add features that are not present in Bitcoin. But not all cryptocurrencies are created equal. While there are alternative coins that may have merit for investors, there are others that advance purely on hype and thrive on speculation.

Just as Bitcoin has been rallying this year, up more than 110% as of Nov. 15, many altcoins have had meteoric rises. Ethereum (ETH), Bitcoin’s top competitor, is up nearly 500% year to date, while the upstart Shiba Inu Coin (SHIB) has gained an astounding 380,000% in a year.

Such numbers may entice investors looking to strike it rich. But altcoins carry several unique risks investors need to understand. Here’s what you require to know when comparing digital assets in the crypto market:

  • What are altcoins?
  • Differences between Bitcoin and altcoins.
  • Investing in altcoins.

What Are Altcoins?

Altcoins are alternative cryptocurrencies to Bitcoin. But altcoins use Bitcoin as a benchmark since it was the first cryptocurrency and has dominated the market, accounting for a majority of all cryptocurrencies’ market capitalization.

“As the first-ever cryptocurrency, Bitcoin has set a model of how cryptocurrency projects should operate,” says Colin Pape, founder of Presearch, a search engine that, like cryptocurrencies, is powered by blockchain technology.

While both altcoins and Bitcoin use blockchain technology, these digital assets can vary in their purpose, features and operation. There are thousands of altcoins, but some of the most popular are:

  • Ethereum.
  • Ripple (XRP).
  • Litecoin (LTC).
  • Cardano (ADA).
  • Solana (SOL).
  • Dogecoin (DOGE).
  • Shiba Inu Coin.

Creators and developers of alternative coins wanted to create different versions of Bitcoin, according to what they thought was missing from Bitcoin’s platform.

For example, Ethereum is a technology that allows users to send cryptocurrency to one another, but another purpose of Ethereum is to be used as a tool in application development where new tokens can be built on the network.

Similar to Ethereum, the purpose of Cardano is to offer peer-to-peer transactions, and it allows developers to build applications on the network. But Cardano’s platform takes a research-intensive approach to building out its blockchain network.

Litecoin also has different features. First and foremost, Litecoin has a larger supply than Bitcoin, and transactions on the Litecoin network tend to be faster. The purpose of Litecoin is to be an alternative to silver, just as some see Bitcoin as an alternative to gold.

There may be an endless list of altcoins, but they don’t necessarily compete with Bitcoin. Rather, Pape says “The purpose of altcoins is to be projects that build on top of open-source blockchain technology, providing alternative use cases to the traditional financial system and big tech companies – think DeFi (decentralized finance) or NFTs (nonfungible tokens).”

Differences Between Bitcoin and Alternative Coins

It is fair to say that Bitcoin has better investing fundamentals than the vast majority of altcoins. Bitcoin is the most purchased, held and traded cryptocurrency on the market. It has a market capitalization of about $1.2 trillion, or more than 60% of the total market cap of cryptocurrencies. Bitcoin’s daily trading volume accounts for more than $30 billion, which means it’s a highly liquid asset.

For each Bitcoin alternative, there is a high probability that the coins will eventually fade away unless it has a strong practical case to make. Many altcoins were created for experimentation, but even the altcoins with stronger fundamentals will have difficulty catching up with Bitcoin. All the while, Bitcoin’s popularity and demand continue to grow.

There is debate as to how to view Bitcoin as an investment, but it is built for future utility. Some investors see Bitcoin as a way to store wealth and point to its increasing acceptance as a payment currency.

Furthermore, there’s growing demand for Bitcoin among both individual and institutional investors. As a result, greater investment interest creates more credibility and adoption of Bitcoin in the long term.

Another factor contributing to Bitcoin’s dominance over altcoins is that Bitcoin has enough of a track record to show an ability to withstand market crashes.

Investing in Altcoins

When Bitcoin goes up, altcoins also tend to go up, and when Bitcoin falls, altcoins tend to also fall. But the rises and falls of altcoins tend to be much more volatile than those of Bitcoin.

Still, some investors see upside in altcoins in a market where Bitcoin is trading near record highs.

“As the price of Bitcoin rises to a certain point, money will flow from Bitcoin to altcoins. As the price of altcoins rises, it flows back to Bitcoin,” says Philippe Bekhazi, CEO of cryptofinance firm XBTO.

Crypto investors who want to diversify into altcoins should consider the risks associated with these digital assets. There are more than 10,000 cryptocurrencies, which means the probability of choosing one of the few that will have staying power is low.

Given the versatility in altcoin options, Bekhazi says crypto investors can tailor their risk.

“Altcoins, especially the smaller ones, have the potential to provide exponential returns on the initial investment if you choose the right ones. One year ago, a Solana token now worth over $200 cost just $2. However, most altcoins will never take off, and often lose what little value they have if the project isn’t maintained,” he says.

Since altcoins carry high risk, it’s best to seek out alternatives that are high in quality and have strong fundamentals, experts told U.S. News. Risk-averse investors should seek out altcoins that have the promise of future widespread utility and consider the size of their market cap and the magnitude of price swings.

“Volatility is always going to be an issue with a nascent, speculative asset class like crypto, so investing in fundamentals will ultimately lead to a more successful long-term strategy,” says Nick Saponaro, CEO of the Divi Project, a blockchain startup in San Diego.

Meme coins like Dogecoin and Shiba Inu may ride community-driven waves to exponential highs, but Saponaro says, “These peaks are often short-lived because there is little to no fundamental basis for the price of the asset.”

Read More:https://money.usnews.com/

Sign Up For Daily NFT Drops

Don't miss the next NFT drops!!!
I have read and agree to the terms & conditions
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Share
What do you think?
Love0
Sad0
Happy0
Sleepy0
Angry0
Dead0
Wink0
Previous Article NFTs NFTs Are Huge. But What Exactly Is A Non-Fungible Token? 10-Point Guide
Next Article Cryptocurrency Cryptocurrency prices today on November 19 : Market in red as Bitcoin, Ethereum fall

Don’t miss the NFT Drops! Sign up Now

I have read and agree to the terms & conditions

Latest News

DeFi protocol DefiLlama has resolved its internal conflicts 1
DeFi protocol DefiLlama has resolved its internal conflicts
CRYPTOPEDIA News WEB3 March 21, 2023
Crypto Fear and Greed Index has reached its highest level
Crypto Fear and Greed Index has reached its highest level
BITCOIN NEWS News March 21, 2023
Project AI Powered Trading Platform Accused of Draining 1M from Users
Project ‘AI-Powered’ Trading Platform Accused of Draining $1M from Users
AI BLOCKCHAIN NEWS News March 20, 2023
Join us
Ad imageAd image

You Might also Like

DeFi protocol DefiLlama has resolved its internal conflicts 1
CRYPTOPEDIANewsWEB3

DeFi protocol DefiLlama has resolved its internal conflicts

March 21, 2023
Crypto Fear and Greed Index has reached its highest level
BITCOIN NEWSNews

Crypto Fear and Greed Index has reached its highest level

March 21, 2023
Project AI Powered Trading Platform Accused of Draining 1M from Users
AIBLOCKCHAIN NEWSNews

Project ‘AI-Powered’ Trading Platform Accused of Draining $1M from Users

March 20, 2023
New York allows Binance Voyager deal to proceed without holdings
EXCHANGESNews

New York Judge allows Binance-Voyager deal to proceed without holdings

March 17, 2023
//

NFTStudio24 delivers the latest NFT news to its global audience. We are committed to reporting mainstream and emerging talent via exclusive press releases, podcast interviews, NFT rankings, and much more.

GET IN TOUCH

  • About us
  • Advertise with us
  • Media Kit
  • 365 Media Plan
  • Submit NFT Project
  • Careers
  • Contact us
  • Privacy Policy

Experts Alliance

  • Experts Alliance
  • About Alliance
  • Alliance Benefits
  • Membership requirements
  • Apply Alliance
//

Subscribe to our newsletter to get our newest articles instantly!

I have read and agree to the terms & conditions
Web3,Blockchain & Metaverse Education Media PlatformWeb3,Blockchain & Metaverse Education Media Platform
Follow US

© 2022 NFTStudio24.com News Network. All Rights Reserved.

Removed from reading list

Undo
Join us metaverse Join us metaverse
Welcome Back!

Sign in to your account

Register Lost your password?