Cryptocurrency is one of the most revolutionary inventions. It not only disrupted the way people used to invest but ended the monopoly of traditional banks. Though Bitcoin(BTC) paved the foundation of cryptocurrency, buying BTC wouldn’t be possible for many investors. That’s why altcoins are the first choice for many crypto investors.
Altcoins or alternative coins are cryptocurrencies other than Bitcoin. While Bitcoin and Ethereum make up most of the crypto market cap, altcoins occupy roughly 40% of the crypto market. That means you don’t have to break your bank to buy BTC and wait for good returns. If you know which are the best altcoins to buy, you can invest in them without any fear, to get a substantial return with low risk. Apart from that investing in altcoins makes a lot of sense on various fronts. If you plan to invest in Crypto, here are five reasons why you should choose altcoins.
1. Thousands of options to invest in
One of the best benefits of altcoins investment is you get to choose from thousands of options. Though there are so many options, you have to find the ones with a competitive edge over other coins with high acceptance in the market and can give you good returns. You can evaluate the history of returns, comparative advantages and acceptability of different options to find the best altcoins to buy. That way, you can get good short term and long term returns without incurring much risk.
2. They are an advanced form of cryptocurrency
Cryptocurrency is an evolving technology. With each coming day, various technological improvements are made to the underlying network of Blockchain that makes Crypto safer and stable. Bitcoin was created in 2009. Since then, many other reliable coins emerged that were more stable than Bitcoin and offered many other real-world functionalities that make them more promising. It won’t be exaggerating to say that altcoins are more advanced than Bitcoin.
Despite setting the benchmark for crypto design and development, Bitcoin’s implementation has a few shortcomings. Proof of Work(PoW), the fundamental mechanism supporting BTC, is time-consuming. Along with that, smart contracts have a few limitations as well. But despite these factors, BTC does hold a strong ground in the crypto market.
However, many altcoins have emerged that are reliable and less energy-consuming. These currencies are perfect for people who are on a budget. Therefore, knowing your options while investing and considering altcoins makes more sense.
3. They offer stability.
Market volatility is an inseparable part of investing. Though no investment offers 100% stability, you don’t want to invest in something that has a history of being volatile. But if you evaluate the risk-reward ratio of each option, you can come up with a high reward and low-risk investment portfolio.
Bitcoin is known for its volatility. Throughout its history, the changes in economic policies, government changes, and global incidents had significant impacts on the value of BTC. Therefore if you wish to avoid extreme fluctuations, you should invest in altcoins. Altcoins such as Ether (ETH)
XRP (XRP), Solana (SOL), Terra (LUNA), and Cardano (ADA) are very stable and do not fluctuate highly.
4. Blockchain use cases are evolving.
Blockchain, the underlying technology of Crypto, is rapidly evolving. That’s why many altcoins today are not just used for financial transactions but for many real-world use cases. You can find numerous use cases for altcoins, such as automation, peer-to-peer financial transactions, improved credit access, and more security and transparency in financial markets.
With more and more acceptance of Crypto and the introduction of newer technologies in Blockchain, altcoins are on the rise and have a promising future. Altcoins solve numerous real-world problems and have introduced revolutionary solutions like Non Fungible Tokens(NFT), decentralized finance(DeFi), and distributed storage solutions. These solutions have solved many long-awaited problems. That’s why it makes more sense to invest in altcoins that have promising use cases and show great promise.
5. Increased Institutional investments and interest
It’s widely known that institutional investors choose their investments with higher returns and more stability. They have more money and an appetite to take on bigger risks. Hence the interest of institutional investors in altcoins is an excellent sign for more masses that want to invest in altcoins. Due to the rising popularity and acceptance of Crypto, bigger and bigger investors and firms are taking a keen interest in altcoins and their benefits. It would be okay to say that the next decade will be a game-changer for altcoins, and more and more investors are getting on board and actively investing and promoting altcoins.
Never put all your eggs in one basket- one of the oldest investing pieces of advice that stays true today. You need to diversify your investment to reduce the risk of losing all your money and make up for the low-performing assets losses. The altcoins offer great diversification to investors as you can choose the coins with a promising future, good returns and low risks.