Altcoins, for the uninitiated, refers to any crypto token that is not Bitcoin. In this article, we'll break down why altcoins are a worthy investment.
Altcoins are a worthy investment for several reasons. First, they offer diversification. While Bitcoin is the most valuable crypto, it has seen periods of market decline. If you only invest in it, you could go months or even years without significant profit. But if you invest in a variety of altcoins, at least one should perform well at any given time. Diversification is especially important because of how volatile the crypto sector is known to be.
Second, altcoins can have impressive market performance. Looking at the crypto sector, it is easy to think that Bitcoin is the only token that performs well. And while it is the biggest token by market cap, there are assets reporting growth rates that blow it out of the water. Looking at the altcoin space, especially newly launched tokens, you’ll see crypto that has 100x growth upon launch.
Third, altcoins offer access to unique projects. Altcoins are also impressive because many are attached to interesting blockchain projects. In the last few years, we’ve seen blockchain projects of every niche emerge to great success. We’ve seen the rise of gaming, including play-to-earn projects with native tokens. We’ve seen NFT projects, environmental enterprises, and many more. If you were to invest only in Bitcoin, the only projects you would be able to directly access would be the Bitcoin network.
Finally, altcoins come with additional benefits. Cryptos are very dynamic, meaning the features one has might be absent in another. One reason you should be investing in altcoins is to have access to unique features. For example, Bitcoin is based on a proof-of-work consensus, meaning it cannot be staked and uses a lot of energy. By using an altcoin based on a proof-of-stake consensus, you can earn interest on your funds and do better for the environment.
Certain altcoins are known to have faster speeds and more security than Bitcoin, as well as other features. While Bitcoin has its benefits, you rob yourself of a world of unique crypto features if you exclude altcoins from your investment portfolio. One thing to do would be to research the possible features that crypto might have that you’d want access to and then seek out altcoins that come with these.
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