Can we still expect investment returns from Bitcoin today? The price of the crypto asset is growing, and not everyone can afford such investments. What can a crypto trader do in today’s situation?
Why it will always be possible to make a profit from BTC
We’ve all heard stories about early investors who became multi-millionaires after investing in bitcoin in Its early days. The lucky ones were able to get it for $ 0.10, and resell it for 10, 100, 1000, 10000 or up to 200,000 times more expensive. With an investment of $ 5 in the first hours of BTC and a resale in December 2017, it was possible to become a millionaire. It makes you dream, doesn’t it?
Obviously, this is purely theoretical. There were long periods of uncertainty, and I don’t think it’s a mistake to say that no one could buy at the lowest price and sell at the highest.
How not to sell after X5? Greg has become a famous meme in the world of crypto trading. He bought 1,700 BTC in 2011 for 6 cents per unit and sold all his savings when the price reached 30 cents. The rest is history. No one could predict what was going to happen. Years later, Internet users came across Greg’s tweets, and a meme was born: “Be smart – don’t be like Greg.»
In the beginning, there were many people who didn’t trust Bitcoin. Many saw the price of BTC rise before their eyes and said to themselves: “It’s too late to invest, we can no longer make a profit with BTC.”
With each new growth of the coin, many people thought it was too late to invest. This happened when prices reached $ 10, $ 50, $ 200, $ 1000, etc.
However, it was always possible to make a profit using the cue Ball. Despite the fact that the percentage profit will become lower and lower, it was always possible to achieve this. Although the prospects for Bitcoin are not the most impressive, you can still invest in altcoins.
Law of supply and demand
Before explaining why it is always possible to make profit with BTC, it should be noted that the return on the asset will decrease over time. Indeed, it is very unlikely that the price of a crypto asset will increase 10 times each year.
It is difficult, if not impossible, to estimate the share that cryptocurrencies will take in the global economy. Some talk about a few percentage points, while more optimistic talk about almost complete replacement. But most agree that this percentage will increase over time.
Bitcoin is the most iconic cryptocurrency, and its number can never exceed 21 million. It can be compared to virtual gold. It is a safe haven for crypto assets.
In addition, over time, BTC disappear for several reasons:
- Loss of private keys by users.
- Sending to the wrong address.
- The death of the holders.
In Economics, supply and demand determine the price of a good or service. We have a coin with a limited quantity and a demand that we hope will grow over time. This means that the value of this asset will constantly grow. At the same time, its value may now be greatly overestimated. No one can know for sure.
You may not know about this, but you can short bitcoin, that is, bet on the fall in Its value! If its price drops, you will earn money. So if you had bet on a loss at the end of 2017, you could have made a significant profit.
Investing in altcoins for more profit
It would not be enough to assimilate all cryptocurrencies only with BTC. There are thousands of cryptocurrencies, and new ones appear every week (or even every day). As mentioned at the beginning of the article, the cost of BTC increased by 200,000 from the moment it appeared on the market until December 2017.
But what about the altcoins? Can they see how their value will multiply, as was the case with King Bitcoin? Let’s take a look at the performance of some altcoins from their ICO in 2018.
As we can see, ROI is important, even if it is significantly less than that of BTC. It should be noted that all these cryptocurrencies started with a low initial cost in order to achieve sometimes impressive results.
Therefore, it is obvious that there should always be an opportunity to make a significant profit in the future. To do this, you will need to carefully choose an altcoin for investment. Of the various projects that will appear, only a few will be able to get such a return on investment. Most of them will not bring you much or lose your investment. Therefore, you need to be vigilant and carefully research them before investing. Feel free to search the Internet to avoid pitfalls and get advice on which cryptocurrencies to invest in. It’s your money at stake!
Invest in big cryptocurrencies or the smallest ones?
We have seen that several major cryptocurrencies (by which we mean the highest-cap crypto) have now gained huge value since their introduction. While this may make you think that it will not be possible to make a large profit in the future by investing in it, there is one very important point to keep in mind. These crypto assets have not reached such market capitalization for no reason.
If cryptocurrencies have reached such a high value, it is because they are recognized by users or because the underlying technologies are useful in the industry. Therefore, they are trusted by users, which makes people buy them first. We can draw a parallel with the stock market by saying that these cryptocurrencies are a bit like the companies featured in CAC40. These are stocks that are considered safe, but with low potential returns.
What about cryptos with a smaller capitalization or that are in the process of being created? These assets have not yet increased in value for several reasons:
- The crypto project is still in development.
- The marketing campaign has not been launched yet.
- The development team is not known, the design is complex, the risks are huge, and so on.
Many crypto projects will never be implemented. But if you had the flair or luck to invest in the right token, you could potentially make a ton of money and get an amazing return on your investment. On the other hand, there is a high risk of losing all or part of your investment.
This may make us think of business angels who invest in startups when they are still in their infancy. Some projects will never be successful, and business angels will lose their investments. Others are the nuggets of tomorrow and will bring huge profits to those who believed in them.
Diversify your investments
To limit risks, you need to diversify some of your investments in traditional assets, such as:
Savings accounts (can be staking POS coins);
- The company;
- In well-designed projects;
- In newly launched ICOs (with a reasonable precaution).
It should be noted that the more risks you take, the greater the potential profit, but the greater the risk of losing everything. It is not recommended to put all the eggs in one basket. We strongly recommend that you diversify your investments. This applies to cryptocurrencies and your traditional assets.
Here are examples of portfolio composition in cryptocurrencies:
- Good investment: 60% BTC, 40% altcoins;
- Reliability: 60% in the top 5 cryptocurrencies, 25% in advanced development projects, and 15% in new crypto projects;
- Balanced: 1/3 for each project type
- Aggressive: 100% on developed crypto projects and ICOS by distributing their assets among at least ten of them.
It is important to diversify to reduce risks. This way you increase your chances of making a profit.
The ranking of the most well-known altcoins investment
Are you interested in which alternative cryptocurrencies to Bitcoin are the most successful and suitable for investment and portfolio diversification? Then you are in the right place and reading the right article. But it is worth remembering that you should invest exactly as much as you can afford to lose, and always consider this nuance. This is not an investment advice. This is a life experience.
- Ethereum (ETH)
Ethereum is one of the most popular cryptocurrencies after bitcoin. It has been talked about a lot in recent years, because it has become indispensable for many other projects, especially in DeFi.
- Ripple (XRP)
Ripple-digital currency of banks. This is a whole technology that acts as a cryptocurrency and as a digital payment network for financial transactions. Ripple is better known for its digital payment Protocol than for its XRP token. It allows you to exchange money in any form, be it rubles, euros, dollars, or PTS.
- Litecoin (LTC)
Litecoin, launched in 2011 by Charlie Lee, is an alternative cryptocurrency based on the Bitcoin model. Litecoin is based on an open source global decentralized payment network. Bitcoin is often compared to digital gold, and it is often compared to silver.
- Bitcoin Cash
Bitcoin Cash is a cryptocurrency created in August 2017 after the bitcoin fork. The main improvement is the increased block size, which allows you to process more transactions per second and therefore offer faster transactions with lower costs. However, they had a hard fork, and the community is still solving its problems.
EOS is a new horizon for decentralized applications. It is designed to create, host, and support decentralized Autonomous applications (dApps). They can be commercial or personal and work similarly to web applications.
Binance Coin is a token of the Binance exchange of the same name. It was the cryptocurrency that suffered the least during the bursting of the cryptocurrency bubble in January 2018. Since January 2019, the coin has been growing sharply, which is mainly due to the success of the Binance platform, which is a world leader.
Cardano is a 3rd generation token. Bitcoin and Ethereum are first-and second-generation tokens, respectively. In this configuration, Cardano is presented as a token that will solve growth problems thanks to the smart contract platform.
Tron is an entertainment blockchain and decentralized platform that aims to create an entertainment system with global free digital content. Everything is based on distributed storage technology, which makes it easy and attractive to share digital content.
- Neo (NEO)
NEO-Chinese Ethereum, was launched in 2014 under the name AntShares. This is the first Chinese public open source blockchain that has collected 8,820 BTC through 2 ICOS. The goal of NEO is to link the real economy and the blockchain by joining certain processes, such as digital identification, which allows users to verify the identity of users and follow the same rules as in real life.
You have just made sure that in the future it will still be possible to make a profit using BTC. However, the potential return should decrease over time. No one can know what awaits us, but it seems that the opportunity to get rich quickly and easily with the help of a cue Ball has already passed.
You will have to learn how to invest in other digital assets with higher potential returns-altcoins. However, be careful, the risks will be significant. Never invest more than you can afford to lose. Study the opportunities well before you invest. This article is in no way an investment advice, and you should be fully aware of the risks before investing. Also keep in mind that it is very important to diversify your investments.