Today, many beginners who have joined the crypto space and want to make money on digital currencies have the same question: ‘What to buy: bitcoin or altcoins?’ Indeed, it is extremely important for a newbie to know the basic rules of diversification and risk management in order not to lose all their funds and not be disappointed in the cryptocurrency market.
What Is Bitcoin and What Are Its Benefits?
To decide what investment strategy to follow, it is worth understanding what bitcoin is. Why do you need bitcoin at all, how exactly can you make money by investing in BTC? At the same time, it is also important to know what altcoins are, why people invest in them, and whether they bring profit.
Bitcoin is a digital currency. The main advantages of bitcoin include decentralization, anonymity, transparency, and a limited number of coins.
Key Bitcoin (BTC) Positive Features
In simple words, Bitcoin does not have a single center of control and functioning. It is controlled by millions of PCs around the world that are connected to its network. Thanks to the blockchain that runs Bitcoin, it is anonymous. This means that no one will be able to find out who exactly made a transaction. Still, on the other hand, the Bitcoin blockchain is open and transparent. Each user will be able to log in and check absolutely any transaction within the network. However, they will not be able to find out that a certain bitcoin wallet belongs to you.
The main advantage of Bitcoin is its limited emission (coins’ issue). This suggests that, even if you really want to, the number of bitcoins will never physically overcome the limit of 21,000,000 coins. Therefore, when demand increases, supply cannot rise, and therefore the price will only increase.
All these properties make bitcoin an attractive investment asset. The price of digital gold will only grow over the years. This means that if you buy bitcoin today, you will most likely be able to make a profit in a few years.
Final Thoughts on Bitcoin (BTC)
As a result, we can say that bitcoin is the most popular, recognizable, and reliable cryptocurrency in terms of investment. And indeed, this is the first and best option for investing money for beginners. In the future, bitcoin can bring a good profit, but this may require some time.
But what if you want to earn money right now? In this matter, it is best to consider altcoins.
What Are Altcoins All About?
An altcoin is a common name for all other cryptocurrencies besides bitcoin. This term comes from the words ‘alternative’ and ‘coin.’ This name appeared among netizens. They decided to conditionally separate the very first cryptocurrency, bitcoin, from the rest, which started to appear later.
All altcoins have one interesting property for making money in the cryptocurrency market. They can rise in price very sharply and quickly and thus bring a high return on investment (ROI). But with the same probability, they can quickly and dramatically lose more than 50 or even 100 percent of their value. It depends on the quality of the project that launches this or that altcoin. Therefore, buying any cryptocurrency is always a risk.
Are Altcoins a Scam?
As a rule, altcoins are created for specific purposes and endowed with different functions. Not every one of them has value and benefit to society. Many altcoins are created only to enrich their creators. Such altcoins absolutely do not carry useful functions or pretend to be innovative. Thus, a lot of altcoins are scams, which make gullible users invest all their money in them and then appear in the red due to sharp price falls.
What Altcoins Are Considered Worthwhile?
Well, there are plenty of altcoins that are really worthwhile. Such altcoins are in high demand, meaning their price can rise significantly and bring a good profit in the short or medium term.
For example, Ethereum can be attributed to worthwhile altcoins. This altcoin is the second most popular coin after bitcoin. Ethereum blockchain is unique since it makes it possible to create other coins or projects on it. In essence, the Ethereum network gives life to projects that cannot or do not want to create their own blockchain for their coins.
Also, the Ethereum network is the progenitor of smart contracts that are extremely useful in the digital world. Due to high demand, people are ready to buy ETH and are interested in the Ethereum network. Therefore, investing in such a strong project can be justified.
Final Thoughts on Altcoins
What conclusion can be drawn on altcoins? Investing in altcoins is always risky. However, such risks can be justified by a high ROI in the short or medium term. There are many really useful altcoins that bring innovation to the industry. However, there are also many scam projects with no useful features or innovations behind them.
That is why the most important thing is to choose the right altcoin you are about to invest your money in.
What Is the Best Investment Strategy to Follow?
So, what to choose for investing in this case? Bitcoin or altcoins? What is the best investment strategy to follow?
First of all, you should adhere to the rule of asset diversification. Diversification is a strategy that mixes a wide variety of assets within a portfolio in an attempt to reduce portfolio risk. Thus, to protect yourself from unnecessary financial losses, you need to buy both bitcoin and altcoins in the correct percentage ratio. If you invest in only one asset, there is a high chance of losing all your funds. If your funds are split into different coins, and one of the assets becomes unprofitable, you will have other assets to recover from financial losses and increase your capital.
What Is the Best Place to Buy Cryptocurrency?
If you’re wondering where to buy your bitcoin or altcoin, you should definitely think about doing it at Switchere. On our platform, you have an opportunity to buy all leading cryptocurrencies in the fastest and most convenient ways using any available payment method.
Switchere is one of the most reliable online exchanges for buying cryptocurrencies. The company is a licensed provider of financial services, with guaranteed legal compliance and a secure infrastructure system for fast crypto exchange services at fair prices.
Switchere is characterized by the fastest order processing and instant delivery — in fact, you get your ordered amount of crypto within minutes after making a payment. Moreover, we offer some surprising bonuses! Users of our platform enjoy a 0% service fee for the first order.
The answer to the question of what to choose, bitcoin or altcoins, is not so difficult. You can choose anything, and the main thing is to follow 2 simple rules:
- adhere to the diversification rule so as not to lose all your money due to one failure;
- remember that investing in altcoins is a very risky strategy since there are many scam projects among them. Therefore, before investing in any cryptocurrency, you need to evaluate it thoroughly.
When it comes to any investment, it is important to remember about the risks. You should never take rash actions with a ‘hot head’ that can lead to financial losses. By following these simple rules, you can become a successful investor!
This information is provided for informational purposes only. Such information is not intended as and may not be relied upon as trading advice. Before deciding to trade cryptocurrencies, you should carefully consider your objectives, level of experience, and risk appetite. Please do your own research and due diligence on the services provided by online cryptocurrency trading platforms.