Should you invest in Bitcoin alternatives?
2017 has been a great year for cryptocurrencies, especially Bitcoin. A person who bought one Bitcoin at the beginning of this year at $1000 is now sitting on more than $10,000 of Bitcoin. That’s an exemplary performance by any standards. However, at this point, Bitcoin might feel a little out of reach for many. That’s why many small-time investors are considering investing in alt-coins since they are relatively cheaper. You may probably be wondering, is an investment in bitcoin alternatives worthwhile? Do they have the potential to give a similar return to Bitcoin?
To help you out on this, lets us look at the top 4 reasons why you should invest in bitcoin alternatives.
- They are technologically superior
Most newbies to cryptocurrencies may not know this, most altcoins are technologically superior to bitcoin. For instance, a cryptocurrency such as Litecoin has better transactions speeds and lower costs than Bitcoin. As more people get to learn of this bitcoin weakness, the value of bitcoin alternatives will surge. This makes it worthwhile to invest in these alternatives and watch your investments grow in 2018. Evidence to this is the declining bitcoin market share relative to the alt-coins, as its value stalls, and the altcoins surge.
- There are software that can help you trade them
One of the reasons why some people fear investing in bitcoin alternatives is that they find it hard to make out their price trends. However, developers are now creating software that can help you make out trends and successfully trade bitcoin alternatives. For instance, with the Ethereum code trading software, you can successfully trade Ethereum without having to do anything. The system is fully automated, which makes it viable to invest in Ethereum as an alternative to bitcoin. As such systems continue to develop, bitcoin alternatives will gain momentum.
- You benefit from scale
While bitcoin has had a great year, the truth is that it has only benefited who have several coins in their portfolio. Holding a fraction of a bitcoin is not in any way lucrative no matter how much bitcoin rises. That’s where altcoins come in. Most altcoins are quite cheap, which means you have the chance to buy several of them, and benefit from scale when their prices rise. For instance, if you have 1000 ripple coins, which are currently valued at less than a dollar, you would benefit more if it moves by 10% than bitcoin moving by 10%, when you just own a fraction of it.
- You will have a diversified portfolio
Cryptocurrencies like every other investment are inherently risky. That’s why it’s best to diversify your portfolio by investing in bitcoin alternatives. This way, even a drop in bitcoin prices would not adversely affect your portfolio. For instance, in the last few days, the price of bitcoin has dropped by up to 30%. This drop would have significantly hurt your portfolio had you invested all your money in bitcoin. With a diversified portfolio, such a price drop would not affect you, since you would be cautioned by the altcoins in your portfolio.
