Are you wondering whether to trade or invest in Bitcoin or altcoins? If so, here are reasons to choose Bitcoin over altcoins.
Bitcoin continues to dominate the crypto market. However, other digital assets or alternative coins are slowly gaining market share. Altcoins are Bitcoin alternatives to some investors and traders. Nevertheless, some traders and investors don’t know how Bitcoin differs from altcoins.
Some people think about altcoins as Bitcoin’s variations. That’s because developers created altcoins to enhance Bitcoin’s functionality or add its features. However, cryptocurrencies are not entirely the same. Although some altcoins have more benefits for investors, some advance on hype, and speculation is the basis of their survival.
Like Bitcoin rallying last year, many altcoins, like Ethereum, have experienced a meteoric rise. And this has enticed some investors to consider altcoins. However, some crypto experts recommend trading or investing in Bitcoin instead of altcoins. Here’s why.
Bitcoin is the most accessible cryptocurrency. Compared to Bitcoin, altcoins like Ethereum have fewer platforms like the bitcoin circuit where people and enterprises can purchase and sell them. On the other hand, more crypto exchanges allow users to buy and sell Bitcoin. Thus, this digital currency is more accessible to users.
Also, more merchants, hardware, and software support this cryptocurrency. Consequently, Bitcoin is more liquid with larger transaction volumes. The developer ecosystem for this virtual currency is the largest, with more implementation and software than other altcoins.
More entrepreneurs are also creating businesses around Bitcoin with more dedication, intellect, and creativity. Therefore, any altcoin that competes with Bitcoin faces a more extensive user base, more mining operations, and a vast developer’s team. Also, an ecosystem comprising open-source projects, entrepreneurs, and startups supports Bitcoin.
Many people opt to trade and invest in Bitcoin due to its large market capitalization of around $1.2 trillion. Bitcoin’s market cap is significant, over 60% of all altcoins. The daily trading volume for this cryptocurrency accounts for over $30 billion, meaning it’s a liquid asset.
Unfortunately, many Bitcoin alternatives are likely to fade away unless they have more practical cases to make. Some developers created some altcoins for experimentation—however, even altcoins whose fundamentals are intense struggle to catch up with Bitcoin. At the same time, Bitcoin’s demand and popularity keep growing.
Apart from merchants accepting Bitcoin, people and enterprises speculate and trade it on crypto exchanges. The currency has proven its use as a value storage. Bitcoin is instructive, and most altcoins try to carve out differentiation according to their minor use cases like buying things, prediction markets, and decentralized servers.
On the other hand, Bitcoin leads as value storage after existing for over a decade without failure. Over the years, no hacker has managed to infiltrate the Bitcoin network. Consequently, more people consider it secure and would gladly invest in it. On the other hand, some altcoins haven’t been around long enough to prove their usefulness as a value storage. Therefore, some people are uncomfortable trading, holding, or investing in altcoins.
Most people base their debate about Bitcoin investing on future utility. According to some investors, Bitcoin is gaining increasing acceptance or adoption as a payment method. More merchants are gradually taking Bitcoin payments at their local and online stores.
What’s more, Bitcoin’s growing demand among institutional and individual investors points to increasing chances of more future usage. Consequently, Bitcoin has generated more interest among investors that see it as a credible asset with the potential to realize more usage and adoption. The long dominance of this digital currency also shows that Bitcoin can withstand market crashes.
Many people argue that Bitcoin’s proven security and network effect are insurmountable reasons to trade or invest in Bitcoin instead of altcoins. Nevertheless, research is necessary before trading or investing in Bitcoin to secure your profits.