With Almost 15,000 Altcoins Why Experts Advice to Pass on Most of Them
Bitcoin won first place in the crypto space long before the appearance of many other digital coins, the so-called “altcoins.”
During this time, thousands of new alternative coins have entered the crypto ecosystem. To make it clear, let’s explain: “altcoins” are any other cryptocurrency except Bitcoin. Ether is one of the most popular among them.
CoinMarketCap’s website shows that as of December 2021, there are over 15,000 cryptocurrencies in the world. Bitcoin accounts for about 40% of the total value of the digital currency market; Ethereum — about 20%; altcoins take over the rest of the market, which is roughly 40%.
So what exactly are altcoins, and why do many experts say it is better to choose Bitcoin and Ethereum, not their alternatives?
The essence of altcoins
As mentioned above, “altcoin” is nothing but a shortening from “alternative coins,” which simply means all other cryptocurrencies except Bitcoin. Regarding popularity, it’s worth noting the following 9: Ethereum, XRP, Tether, Cardano, Polkadot, Stellar, USD Coin, Dogecoin, Chainlink, and Uniswap.
Altcoins as an investment tool
You’ve probably heard that Bitcoin is a very risky asset due to its volatility. So, altcoins are even more dangerous in this sense. The most popular altcoin, Ethereum, had risen in price significantly since 2015 when it was first introduced. All thanks to the emergence of smart contracts and non-fungible tokens (NFT). Now the market capitalization of Ether exceeded $500 billion.
But don’t let this success cloud your vision. Even crypto evangelists always interpret the rise in the value of cryptocurrencies with caution.
Experts urge not to consider digital coins as a way to hit the jackpot quickly. Use them as a way to learn a new asset class without spending your last dollar. Before investing in altcoins like XRP, make clear how it works.
Many experts predict that cryptocurrencies will continue to conquer the world. Especially now when the US administration has signaled its willingness to regulate the asset, and blockchain technology continues to spread across many industries.
While many are trying to foresee the right moment to enter the crypto market, experts recommend buying Ethereum and Bitcoin and keeping no more than 5% of the total assets in the portfolio in digital coins.
Don’t fall for a stunning rally right away. Assess if you’re ready to take risks, what time frame you take into account and what are your financial goals. Other ways are available today for those who don’t want to buy crypto assets directly but really want to invest in an asset.
How long will altcoins live
Nobody can say how long and which altcoins will survive and stay with us. The most recent example of a fleeting rally in coin value is the Omicron rally. After the news on the spread of a new virus strain, the price rose by 1000% and then lost almost all gains.
To summarize, if you’re a passive investor, altcoins are not for you. But if you’re considering this asset as a potential investment in the future, you can start by learning about altcoins and how they are used now.
