Bitcoin vs. Altcoins: Picking the Best Asset for Your Investment

Bitcoin vs. Altcoins: Picking the Best Asset for Your Investment

Since its launch in 2009, Bitcoin has been the leading cryptocurrency in the market. However, in the years that followed, other cryptocurrencies known as "altcoins" (the word specifically crafted to denote cryptos that were alternatives to BTC) have emerged. Although similar to Bitcoin in terms of being decentralized peer-to-peer digital currencies based on blockchain technology, various altcoins often offer unique features that differentiate them from the pioneer cryptocurrency.

Choosing between Bitcoin and altcoins for your cryptocurrency investments can be a tough task. One’s choice depends heavily on their personal strategies, investment goals, risk tolerance, and market conditions. Therefore, don't expect that this article will provide you with some win-win investment recipe that will be universal in any situation.

Instead, we will discuss the advantages and disadvantages of Bitcoin and altcoins as investment assets so that you can make the choice yourself.


Investment Advantages of Bitcoin


There is no doubt that crypto itself has numerous advantages over fiat or other assets from an investment viewpoint. Therefore, in this section, we will focus on the benefits that Bitcoin itself has compared to other cryptocurrencies, avoiding the obvious pros of cryptocurrency investments in general (such as decentralization, lack of government control, etc.).

That being said, here are few major investment advantages of Bitcoin:

  • 14-year track record

Bitcoin is the oldest mainstream cryptocurrency that one can purchase. As of this writing, it has been in the crypto market for over 14 years. During this time the price of BTC has undergone significant fluctuations, yet this cryptocurrency has never lost its relevance. Consequently, although past performance does not guarantee future returns, investors still have much more confidence in BTC than in other cryptos.

  • Limited supply

The very development design of Bitcoin does not allow more than 21 million BTCs to exist on the crypto market. As of now, over 19 million Bitcoins have already been mined. According to expert predictions, the upper limit of 21 million Bitcoins will be reached around 2140. The limited supply undoubtedly makes Bitcoin more attractive from an investing point of view, as when demand increases, scarcity is highly likely to drive the asset’s price up.

  • Increased adoption rate

As the very first cryptocurrency to hit the mainstream market, Bitcoin has long enjoyed the so-called "first mover advantage". As a result, today Bitcoin has the highest prevalence of all cryptos, being widely accepted as a means of payment and traded on all known crypto exchanges. It has a broader implementation field than many other cryptos.

  • Higher liquidity

Bitcoin has the highest trading rate of all cryptocurrencies. As a result, it also has the highest liquidity in the crypto market. Liquidity is one of the key factors for investors, since it identifies how easy it is to buy or sell certain assets. Besides, it affects the stability of the asset, which is also one of the key factors that investors should consider.


 Investment Advantages of Altcoins


The term “altcoin”, short for "alternative coin," refers to any cryptocurrency that is not Bitcoin. There are currently thousands of altcoins in circulation, each with their own unique features, use cases, and potential benefits. Without going into details about each specific altcoin, but considering them as a group, one can identify several most notable advantages they have:

  • A wide variety of choices

Although altcoins are often grouped together, it is difficult to find a more heterogeneous category of digital assets. This crypto class includes a wide variety of sub-categories: utility tokens, payment coins, security tokens, stablecoins, and many others. Therefore, when deciding to invest in altcoins, you can choose those specific assets that suit your strategy and goals best.

  • Improved technologies

Bitcoin’s first-mover advantage had a downside: it deprived the coin’s developers of the opportunity to take into account the mistakes of their predecessors. Instead, many altcoins that emerged in the following years were created with BTC's shortcomings in mind. As a result, these digital assets were usually based on newer blockchain technology, had a wider range of capabilities, and often enjoyed improved performance indicators, such as higher speed or greater security.

  • Lower entry threshold

Whilst often being referred to as the world’s top crypto, Bitcoin is also the most expensive one. As of this writing, BTC costs over $28K, and even that is less than half of its all-time high. As a result, not everyone can afford to buy even one Bitcoin, let alone several. In turn, altcoins offer investors a wide price range, from a fraction of a dollar (e.g., ALGO) to several thousand (e.g., ETH) per coin. With altcoins, crypto investing is much more accessible to a wide range of enthusiasts.

  • Greater potential for growth

Unlike Bitcoin, which revealed its potential a long time ago and is unlikely to make any mind-blowing rapid leaps soon, many altcoins have not yet fully unveiled their full capacities. Moreover, with new coins emerging regularly, it is quite possible to invest in young crypto before it multiplies in value. Chaos and unpredictability hide equal risks and opportunities, and many altcoins are currently much more chaotic than BTCs.


Reasons to Invest in Bitcoins and Altcoins

The above factors indicate that both Bitcoin and altcoins have their advantages in terms of investment attractiveness. It is impossible to say which of these types of crypto investments is the best. However, one can determine in which situations Bitcoin or altcoins are more suitable for them.

You may want to invest in Bitcoin in these cases:


 • If you are looking for a more well-established investment. Bitcoin is the largest and most well-known cryptocurrency, with a long history of development, adoption, and market acceptance. It has proven to be a relatively stable investment over the long term (although “relatively” is a key word here since no crypto can be described as truly stable), with less volatility compared to many altcoins.
• If you are concerned about liquidity. Bitcoin has a large and active market, with many exchanges and trading platforms offering high liquidity and low transaction fees. This makes it easy to sell and buy Bitcoin quickly at any reliable exchange, being sure that you’ll always find the amount that you need.
• If you are interested in the potential for long-term growth and adoption. While there are many altcoins with unique features and potential use cases, Bitcoin remains the dominant cryptocurrency with the highest market capitalization and the greatest potential for integration into mainstream finance and commerce.


You may want to invest in altcoins in these cases:


• If you're looking for more diverse options. While Bitcoin is the largest cryptocurrency, there are thousands of altcoins available, each with its own unique features and use cases. Investors who want to diversify their portfolios and take advantage of specific opportunities may find that altcoins offer a wider range of investment options.
• If you’re looking for less expensive digital assets. As the price of Bitcoin has risen, it has become increasingly costly to acquire even a small amount. In contrast, many altcoins have lower prices, making them more accessible to investors with limited funds. This can be particularly appealing to those who are just starting their crypto journeys.
• If you’re willing to spot a new promising crypto before it explodes. Many crypto enthusiasts seek to repeat the success of early Bitcoin investors who managed to buy the first BTCs for fractions of a dollar and are now multimillionaires. Such a scenario is possible only if you are ready to invest in a new, little-known altcoin, which can bring you great opportunities but also significant risks.


The Takeaway


There is no single answer to the question of whether it is better to pick Bitcoin or altcoins for your cryptocurrency investments. It all depends on what goals you pursue and what your investment strategy is. However, considering the specific advantages inherent exclusively to Bitcoins and altcoins, it is possible to formulate a list of circumstances under which either investment will be more logical.

Thus, Bitcoins are:

• More well-established
• Limited in supply
• Actively adopted in various fields
• More liquid

Naturally, it would make sense for you to buy Bitcoin if you are looking for a long-term, well-established asset for your crypto investments that is time-tested, popular among investors, highly liquid, and widely adopted.

In turn, altcoins are:

• Numerous and diverse 
• Often based on improved technologies
• More accessible
• More prone to rapid price changes

As a result, you may prefer altcoins over Bitcoin if you want to invest in much cheaper, often more technologically advanced coins, among which you can find those that you believe will have high growth potential. You can choose which altcoin is most suitable for you and buy this crypto on a reliable exchange.

Whatever choice you make, remember one thing: there is no one-size-fits-all recipe for crypto investing. It is up to you to determine which investment strategy and assets suit you best and navigate your way in that direction. No one knows what you need and how to achieve it better than you!


Disclaimer: Our content does not constitute financial advice. It is only intended for informational and educational purposes.