Pie chart view of my portfolio on Coin Stats app
To understand why 99% of my crypto portfolio is in BTC, let's take a look at altcoins and how they have performed historically.
At the time of this post, Bitcoin's 24-hour volume is $3.4 billion (https://openmarketcap.com/). How much volume does an altcoin needs to be considered 'alive'? 1% of BTC volume? Too much? Let's do 0.1% of BTC volume for the sake of giving altcoins a chance. That amounts to $3.4 million in the past 24-hours.
There are 36 altcoins (stablecoins are not included for obvious reason) that fall into the volume requirement and could be considered 'alive', with some being alive and kicking, and some barely alive. Let's look at them arranged in chronological order.
Why compare in terms of BTC value and not USD value? That's because at the same time, BTC was mostly gaining on USD as well. In order for a coin/token to outperform BTC, it has to gain in BTC value at a rate higher than BTC gaining USD value in the same time window.
Now based on the table above, one might say "Hey, that's not bad! That's like 15 wins out of 36."
Well, you are not wrong... EXCEPT, there are 2265 altcoins at the time this is published. So it's 15 wins out of 2265. That's a 0.66% win rate for ya. Now before you start thinking that most coins aren't worth your time and "I only analyze the best altcoins", know that it's the same perspective for the guy who saw the best in a random obscure coin. He is thinking that his altcoin is just as good as any, if not better.
Let's look at the winning coins/tokens a little deeper.
Oldest coin among the winners, and was listed in Feb 2014. Dash has done a crazy 37x in BTC value up till today. At that time, Dash was ranked #33 out of a mere 107 altcoins. That's a 0.93% win rate.
Possibly the only 'unicoin' startup here, as BNB outperformed BTC with jaw-dropping 65x ROI. And that's just in 2 years. Binance came from rank #143 to #7 in that period. How many altcoins were there when BNB was listed? 984. The win rate was 0.1%.
DASH and BNB were the only two biggest winners, with some honorable mentions here:
CHAINLINK - 46 month old coin with 6.2x gain vs BTC. Ranked #71 among 1079 altcoins. Win rate = 0.092%
TRON - almost as old as LINK, 5x gain. It was ranked #946 at time of listing among 1065 altcoins. Win rate = 0.093%
NEO - started as ANTSHARES in Sep 2016, NEO has gained 4.4x vs BTC so far. Rank #544 out of 649 altcoins. Win rate = 0.15%
ETHEREUM - literally the mother of tokens, ETH did 2.3x which is ok considering it's almost 4 years old. It started really strong, at #4 rank out of 595 altcoins. That's a 0.168% win rate.
VECHAIN and STELLAR both did 1.5x against BITCOIN, with a win rate of 0.059% and 0.26% respectively.
As you can see, the chance where I picked a strong winner is less than 1%, and most of the times less than 0.2%.
BUT WAIT! How about the fact that DASH did 300x vs BTC at its peak? Wouldn't that count for something, that altcoins have the best gains?
Yes, that does count for something. It means you have to be lucky enough to have picked THE winning altcoin. Sounds familiar? Yeah, it's called gambling. Would you have known that a random coin designed to facilitate trading for an unknown and new exchange turned out to be one of the most-traded coin today? Would you have known that a coin out of many coins that cater to the privacy/anonymity market became a profitable investment? How about that obscure coin that is going to change the pharmaceutical industry, replace Facebook, become the new ride-hailing system or change the world, lying among 2265 altcoins now? Or the fastest, fairest, most-scalable coin that's going to be released in the future? HOW WOULD YOU HAVE KNOWN?
You couldn't. Nobody can. Not me, not you and definitely not some Twitter 'influencers'.
What if I bought Bitcoin at the time when DASH was listed? That's about $650 per Bitcoin. At the time of writing, Bitcoin is sitting at $11,600. That's a nice 17x gain.
Meh... 17x gain? That's not enough for me to buy a Lambo. I need Lambo now, gimme gimme Lambo gimme gimme Lambo.
You forget, that's 17x gain WITHOUT GAMBLING WITH 99.8% LOSE RATE + SAVING ME FROM ALL THE HEADACHE.
Even if Bitcoin reaches only the market cap of Gold, that's a 40x from now.
If you invest $10,000 and given 2 scenarios now,
Scenario A: You are most likely going to make a profit, possibly up to $400,000, with a 99.8% chance of that happening.
Scenario B: You are most likely going to make a loss, possibly losing all of $10,000, but has a 0.2% chance of making $3,000,000.
How many times can you afford to lose your investment?
I do not know about you, but I invest with my hard-earned money, I'm definitely going for the highest possibility to win. Even if it just made my life 2x as better, I consider it money well-invested! Do you know most stable, mainstream investments give you less than 10% a year? If I wanted to gamble, I can do so with some pocket change, but not in hundreds or thousands of dollar$$$!
I can gamble with 1% of my portfolio, flipping altcoins for fun, and maybe possibly catch a 10x (MATIC I'm looking at you), if I lose it all, no problem. But no way in hell I'm going to pick and hodl altcoins because the statistics are clearly against me. Heck, I have better odds gambling at a casino.
BUT BUT BUT, BITCOIN IS TOO SLOW TO BE USED AS CURRENCY! IT'S OLD TECH!
Well, I invest in Gold not because I want to use it or because it's the best metal. I invest because it's a speculative store of value. Oh, I mean Bitcoin.
1. My portfolio is 99% BTC. I hodl Bitcoin, trade/gamble altcoin with 1% of my portfolio.
2. Out of all altcoins, only 1 surviving 5-year-old altcoin is profitable. Back then the chance of picking the winning altcoin is less than 1%.
3. 99.8% altcoins never survived past the first few years. Those survived, were not more profitable than Bitcoin.
4. The winning rate gets smaller over time as more coins are introduced.
5. BUY BITCOIN.
Like seriously, if altcoiners lambo-mooners would just focus on Bitcoin, we can all make Bitcoin moon higher, quicker. A trillion or even tens of trillions of market cap is possible.