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Should You Invest in Bitcoin or an Altcoin?
Let’s explore the world of cryptocurrencies for the casual investor or people who are just starting to feel comfortable with the idea of digital currencies.
I remember my brother once told me, ‘It’s stupid. It’s doesn’t exist because there is no tangible backing.’ I tried to explain to him that it’s a different type of situation where the market is the currency and vis-a-vis.
He couldn’t wrap his head around it. He could get his head around something existing that you can’t hold in your hand.
So, I used our thoughts as an example. They are not tangible. Depending on how philosophical you want to get, you can’t even prove that they exist at all.
At least with BTC, you can print out the documentation that proves you own some.
So, in that vein, is bitcoin more real than our thoughts? Ironically enough, that got him thinking.
What got him thinking, even more, was the fact that shortly after this conversation and him declaring BTC a stupid thing with no value, the coin shot up to $20,000.00 per unit.
So, if you are finally getting past where my brother was at, should you invest in BTC or and ALT?
New to the Crypto-Trading Game
If you are just starting out, I recommend Bitcoin.
It has a lot more practical use than most of the altcoins as you can withdraw it from ATMs all over the planet, and us it to make online purchases0 at 10s of websites on the net.
On top of this, it’s easier to convert bitcoin to cash using sportsbooks. It’s a little trick you can use to shield it from a potentially down market without actually officially selling your coins.
But the main reason you want to stick with BTC, in the beginning, is that it is not going anywhere anytime soon.
There are hundreds of ALTs, so if you pick a newer small market altcoin, there is a much higher chance that it crashes and completely collapses and you could lose all of your investment.
With bitcoin, it’s not likely that you’ll lose everything, even when it plummets.
And unless you buy you coins during an all-time high, you are likely to gain all of your money back and perhaps even profit if you just wait it out.
Maybe you were planning on being a trader, but volatility rears its ugly head, and suddenly instead of a short, you’re in it for a long.
With a small altcoin, this might not be possible.
The Benefits of Up and Coming Alts
The main reason people are attracted to altcoins is the price. For example, if you have $50 you could buy roughly 640 Stellar Lumens at the time of writing this.
When I bought some stellar they were just 5 cents per coin. Now they are almost 8 cents. They maxed out at 94 cents at one point in time.
So, If I spend just a couple of hundred dollars at 5 cents, I have around 4000 Lumens. If they hit a dollar, suddenly my 200 dollar investment is worth $4k.
Not bad, right?
Ethereum Classic is one of the bigger low-price altcoins with a $788.6 million market cap, and it’s worth a little under $7 dollars at the moment.
Compare that to BTC which is worth more than $9k per coin, unless you have a whole lot of money to put in, day-trading BTC doesn’t make a lot of sense.
I have to invest nearly 10 large just to have one coin and could work watching the charts all day and still only trade for a hundred or two hundred dollars of profit.
But what about Ripple, if I have 9k in ripple at 18 cents, and then trade it at 21 cents. Well, I just earned $1500.
So, there is a real appeal to the altcoins, but you have to know BTC first because they follow bitcoin’s movent. So, learn BTC then jump into the alts.
If you’re nervous, start small while learning the ropes.