Should I allocate part of my capital to this project? I already have Bitcoin, what can I diversify into?
Do these questions sound familiar? That’s perfect, because today we’re going to talk about altcoin, what it is and where to get it!
Disclaimer: Our content is intended to be used and must be used for informational purposes only. It is very important to do your own research and analysis before making any investment based on your personal circumstances.
What are altcoins?
The answer to this question is the simplest possible, the altcoins gather all the corners/tokens which are simply not BTC. So, on the cryptos market, there is the Bitcoin King and the altcoins.
Should I invest in altcoins?
Spoiler alert, yes it’s interesting, and here’s why:
First of all, as the old saying goes “Don’t put your eggs in the same basket”. The main reason to invest in altcoins when you’re in the cryptos market is that it offers a possibility of diversification compared to Bitcoin. Nevertheless, when BTC falls, the rest of the market tends to fall with it.
The second is that the market cycle of Bitcoin and altcoins is slightly different. Indeed, during a very pronounced bull-run like the one we have seen in recent months, BTC tends to lead the “dance” and is therefore the first to reach a peak. We then see a shift in the flow of capital from the BTC to the altcoins and especially the majors which reach their peak shortly afterwards, such as ETH for example.
Finally, in a market where the BTC occupies 50% of the total market capitalization, the upward potential of an altcoin is sometimes much higher than that of King BTC in a context of generalized market increase.
Explaining this further...
What could be better than a few examples to back up what I’m saying?
Over the period from October 21st, when the 12000’s broke for BTC, up till today, it has achieved a performance of 191%.
This is huge, but if we look at some of the biggest altcoins such as ETH or DOT, they do even better with a performance of 349% and 374% respectively. LINK, takes 140% over the same period, a lesser performance which is explained by the fact that LINK had already reached its ATH before BTC.
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What’s a good way to get started?
In conclusion, it is obviously interesting to invest in altcoins for those looking for a handsome return. You simply need to keep in mind what your strengths and weaknesses are and move towards investment or trading as best suits you.
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