Bitcoin or Altcoins?

Bitcoin or Altcoins?

By johnwege | johnwege | 15 Sep 2021


The ageless question, bitcoin or Altcoins?  This is a question where you will receive different answers depending on which person you ask.  There are many variables that come into play to decide which option is best for you.  Things to consider are what are your goals, coin fundamentals, how long you will be in the market, risk-tolerance, what will be around in the future, are you trying to maximize profits, price-unit bias, are you a trader? And the list goes on and on.  But which one do I think is the best?  Let's look into this more.  

Also I want you to know that I consider anything outside of bitcoin and ethereum altcoins.  

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As bitcoin has become more and more expensive; this has led people to feeling that they have already missed their chance with it.  And so they begin looking else where. Recently there has been a strong price-unit bias against bitcoin.  The average person when investing into cryptocurrency isn't dropping thousands of dollars or more, but instead often investing just their spare cash.  For the sake of simplicity, let's say they are able to invest $100 at varying times.  If you were to put that $100 into bitcoin that would equal to be about 0.002 BTC.  But if you were to put that same amount into Dogecoin, you would be able to buy around 400 coins.  While for me this is a non-issue because I understand how valuable and scare bitcoin is.  But for the regular person; being able to buy 400 coins compared to 0.002 of a coin seems more appealing.  This sentiment has been growing as the price of bitcoin has gone over $50k during this bull run and we can only expect that it will grow even strong as the price soars to even higher unprecedented heights.

Another important factor to consider is the coin fundamentals.  Whether you are fan of bitcoin or not, there is no denying the importance that is has had and still has on this market. After-all, it is arguably the first cryptocurrency that started this whole movement.  The creation story of bitcoin is also important to consider.  It is nearly impossible for a coin being launched anytime after bitcoin to have the natural path to becoming an asset that has value, and also equal distribution.  We often see stories now of altcoins have pre-sales, pre-mines, sales to insiders, allotments for the development team and so on.  That wasn't the case with bitcoin.  Once the network and mining turned on, it was a free-for-all for everyone.  Think of all the ICO's that got funding for just having an idea, before the coin was developed or anything.  Bitcoin was launched with no value, and became valuable naturally.  At the time cryptocurrency wasn't a thing, and people weren't looking for the next up and coming coin to make big profits like they are today.  Instead, people thought it was a cool idea and could be a great way to potentially step outside of the government system in the future.  And so people began collecting it, and trading it.  It became value and the rest is history.  Another key thing to consider is the decentralized security of bitcoin.  At the moment, there is no other chain that even comes close.  It is the most trusted for a reason, and when it comes to finances; especially in cryptocurrency.  Trust is everything.

Let's move on to talking about profits.  Bitcoin has already moved up to a market cap of nearly $1 trillion and this means it requires much more cash inflow for the price to continue to move upwards.  On the other hand, altcoins market caps are much smaller and this makes them much more volatile.  Meaning that they will go up at a higher percentage than bitcoin, but also move down at a higher percentage rate as well.  This is where you need to ask yourself what is your goal in the market?  A key thing to consider is that both bitcoin and altcoins appreciate much more than traditional investments such as stocks or bonds.  While in the cryptocurrency market, many people consider bitcoin price movement slow and boring, it is important to remember that it is still appreciating at an insane level.  When looking at the short cryptocurrency market history and assuming that it repeats itself for the near future, it becomes apparent that investing into altcoins can be extremely risky.  During the last bull run, there were many altcoins where its price dropped 99%.  And many of those coins still haven't recovered to their previous all-time highs.  Some have though.  During that same time bitcoin also dropped, but it was around 80%, but the important thing to note is that it also recovered much more quickly.  Like it or not, but most of the industry is still tied to bitcoin.  When bitcoin goes up, so do the altcoins.  And when it drops, so do the altcoins.  But when bitcoin really gets moving, it also absorbs the altcoins like a blackhole.    So if you are wanting to maximize your profits by investing into altcoins, it really becomes a game of timing.  I believe that bitcoin is "The Asset" in cryptocurrency, and it should be what you're striving to own.  Your portfolio's savings.  I have said this many times, but I believe this will end up being a game of people who have bitcoin and those who do not.  Many people's strategy is to use altcoins to accumulate more bitcoin.  That is a fine strategy as long as you have the correct timing that I discussed above. 

Basically meaning that you need to know when to convert or sell your altcoins into bitcoin.  Always using your altcoins to accumulate more bitcoin.  You would never see me holding on to Shina Inu, or some other alt coin for the long haul.  In terms of value compared to bitcoin, it will trend to zero.

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In the past I used to invest heavily into altcoins and thankfully I did very well. I was able to put all of those profits into bitcoin, but something that I always remember is the stress that I used to have.  Investing into cryptocurrency is quite a risky venture.  We all hope this journey will take us to the moon and having financial freedom, but it also could take us to zero.  I used to be very stressed about finding the right altcoin, and finding the right time to sell it.  I don't have any of those same worries when I'm investing into bitcoin.  So you need to ask yourself what your risk-tolerance is.  If you do indeed have high-tolerance, you could do very well by investing into altcoins.  As for me, I usually have bad timing and also bad luck, and this would cause some sleepless nights.

I think the main reason why people invest into altcoins instead of bitcoin is that they are trying to get rich quickly.  Just like we saw with Solana this year, it is possible to hit the jackpot and find a coin that does a 100x upwards in price.  People are hoping to change their lives forever.  While many of those people consider what they are doing investing, it is actually gambling.  While Solana is a solid project, a large majority of altcoins are not.  People are only investing because they think the price will go up.  On the other hand, I believe strongly in the fundamentals of bitcoin and that is why I invest in it.  Also believing that because of those fundamentals the price will continue to rise.  I have full confidence that the price of bitcoin will go up to over $1 million per coin after the next having.  Those who invest heavily today can still become very rich from it.  It will just take a little longer than if you hit the altcoin lottery.  I'm striving to build a fantastic portfolio foundation that I can build upon for years and decades to come.  Something that will continue to appreciate in value, and something that I can depend upon.  For me, bitcoin is that and altcoins are not.

How about you?  Do you prefer bitcoin or altcoins and why?

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johnwege
johnwege

Hello I'm John Follow me on Twitter! https://twitter.com/johnwege


johnwege
johnwege

Living day by day, stacking sats and trying to retire early. Check out my substack blog https://johnwege.substack.com/ Follow me on Twitter twitter.com/johnwege

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