Before delving into the choice of investing between Bitcoins and Altcoins, it is important to discern what it means to invest. Investing refers to the act of putting your money into something and hoping to earn from the operational profit rather than the value of the asset. Buying assets and holding them with the expectation that you will profit from an increase in value is speculation.
So between Bitcoins and Altcoins, which one is the best to invest in and which one is suited to speculating? Read on.
Speculation Reigns Supreme
In the current cryptocurrency landscape, what the majority of people are doing is speculating. New coins keep launching daily. With that, people put their money in them, hoping a bubble, like that of Bitcoins, will happen.
An interesting thing to note, however, is that many market players are stacking coins in a bid to diversify their portfolios. This act of stacking works well in a very volatile market like the one for cryptocurrencies. We consider this investing although it looks similar to the speculation we talked about earlier.
What is the Answer?
So you have understood what is speculating and what is investing. So which one do you go with and for which coin? Altcoins will allow you to maximize profits while Bitcoins are best suited for maximizing safety.
The shrewd investor, however, chooses to balance his or her portfolio. A good way of balancing the Bitcoin and Altcoin portfolio is doing a 50-50 balance. This way, you continue to profit from the Altcoins while the Bitcoins shield your portfolio from any adverse market shifts.
It is important to decide which of these alt coins to buy. Experts advise that you buy the altcoins according to industry. There are a galore of these industries; gaming, financial, services, health, and many more.
Narrowing into an industry that you are passionate about and whose workings you understand is the best decision. That way, you will be able to monitor your investments with an expert outlook since you understand the trends in that particular industry.
The cryptocurrency industry is ever evolving. It is therefore important to make the right picks for your portfolio. Ensure that you shield your portfolio from adverse risk but still make it profitable in the long run.
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