Which are Better to Trade for New Traders – Bitcoins or Altcoins?

Which are Better to Trade for New Traders - Bitcoins or Altcoins?
Which are Better to Trade for New Traders - Bitcoins or Altcoins?

Even today, it shows no signs of slowing down. Despite serious warnings from analysts and experts, bitcoin continues to draw investors from all over the world who are investing in millions of dollars in the bitcoin platform.

The explosive price rise of bitcoin has spawned an army of copycat cryptocurrencies in the market. Developers are taking the original bitcoin code, making modifications to it, and releasing it as a completely new cryptocurrency. There are now more than 1,500+ cryptocurrencies out there.

BitCoin price
BitCoin price

A large number of them are pretty much same as one another, or are just slightly different versions of bitcoins. The idea is that developers create new cryptocurrencies that come with some pretty cool features. The features attract the crypto investors, who start pouring money into the system.

Their purchases drive the prices of the cryptocurrency up, and soon, the developers cash in on this by selling a majority of this cryptocurrency’s coins that they had held with them right from the start. Then, they move on to creating another cryptocurrency, leaving the previous one to wither. That’s how there are 1,500+ of them now, when most of us can’t recall 10 of them from the top of our head.

So, does that mean that you should ignore all the altcoins (also known as bitcoin copycats) and focus only on bitcoin? If only things were that simple! Actually, things can be that simple if you want to make only decent profits. But, if you want to get into crypto trading and earn maximum profits, then there are a lot of things you need to consider. So, here are some golden rules.

Trading and Investing?

This is where most of the beginners in the cryptocurrency world commit mistakes. Investing and trading are two very different things. If you want to invest in a cryptocurrency, you purchase it when the coin is not doing well, and then wait for the price to rise.

You sell your holdings of cryptocurrency when you think that it has reached a price point after which it can only go down. This is a long term strategy. You usually have to wait anywhere from a few months to even a few years. It requires patience and time.

Trading is a short term strategy. You observe the price fluctuations of a cryptocurrency closely and predict the direction in which it is going. If you feel that the prices are going up, then you purchase more coins and if you feel that the prices are going down, then you sell your coins.

Why Does it Matter Whether I’m Trading or Investing in a Particular Coin?

Here’s the thing. For short term trading, where the traders make the trades on a daily basis, you need not stick to any one cryptocurrency. Keep your eye on the performance of the top 10, 15, or 20 cryptocurrencies and put your money into whichever coin that is giving the highest percentage returns.

There are plenty of crypto trading platforms that allow the users to trade between the cryptocurrencies. This way, you can trade in bitcoin one day, in ethereum the next day, in litecoin the day after, and so on. Even the copycat cryptocurrencies which do not have a great future will not do great at one moment and fall the next.

So, day traders are pretty much safe from the inherent issues of a cryptocurrency. The only thing that should matter to you is the direction in which the price is going, and the percentage returns.

For long term investments, you should pick a coin that has a bright and reliable future. The same is true for medium-term trading, where the trader usually makes a trade once in a month or so. If you put your money into a cryptocurrency that is going down or nobody is using, then you may end up losing all your money, and you won’t realize it until it is too late.

So, focus on cryptocurrencies that have a stable future, at least in the medium term. Beginners should get themselves acquainted with the top performing cryptocurrencies in the market – price fluctuations and market capitalization. They should make it a point to understand what makes a cryptocurrency unique and why it will survive the future.

Which Cryptocurrencies are Stable for Investments?

The internet is replete with thousands of cryptocurrencies. Even before you check out the names of all of them, there will be another new cryptocurrency in the launch position. So, don’t waste your energy checking each of them.
The cryptocurrency whose future is almost pretty much secure is the bitcoin. It will be here irrespective of how many other cryptocurrencies will fade away into oblivion in the future.

A lot of businesses and people have worked towards creating a worldwide bitcoin infrastructure that is not limited to speculative trading. There are businesses that actually transact in bitcoins. So, even though bitcoin bubble will soon burst and its price will eventually collapse, it will survive through this. However, considering the impending bubble burst, it is best if you do not invest in it.

The safest bets for investing your money are Ethereum and Ripple. The reason? Both of the cryptocurrencies are vastly different from the others. They are no like bitcoins. These two coins are built to provide a blockchain platform for banks, financial institutions, and developers to create applications on them. These applications will make the financial transactions safer, faster, and more user-friendly.

Monero, Ethereum, Litecoin

These crypto platforms have already won the hearts of international banks and big tech companies. So, they have their backing. In other words, these coins will be here no matter what. Even if the public stops using these coins, the institutions have a lot to gain from using them. Rest assured, they are safe for long term investment.

Another safe investment option is the litecoin. This cryptocurrency costs only a fraction of what bitcoin costs at the moment. But, there are many people who think that it will soon reach the price levels of bitcoin. So, it is a good bet for long term investment as well.

Finally, there are the privacy coins – Dash and Monero. These two cryptocurrencies offer complete anonymity of transactions on their platform. Even bitcoin does not offer that. So, you can imagine their popularity in the deep web.

Everyone who has something to hide from the law uses Dash and Monero in the deep web to make anonymous transactions. More and more deep web websites and services are accepting payments in Dash and Monero to shield themselves from the eyes of the law enforcement agencies.

So, their popularity is not going to wane with any bubbles or bursts. They will survive the future, which makes them an excellent investment option.

Which Cryptocurrencies are Best for Trading?

The short answer – bitcoins.

The long answer is that there are many cryptocurrencies that can bring huge profits to traders, if they are ready to put in the required time and energy into them. Trading with bitcoin is simple, at least in the medium term. Bitcoin has been on a phenomenal rise at the moment, which is expected to continue for the next few months. So, if you want a single cryptocurrency to get into trading, then bitcoin is the perfect choice.

However, a smart trader trades in multiple high growth cryptocurrencies. Focus on a few top performing cryptocurrencies and trade between them depending on which of them is giving the highest returns.
Start with bitcoin. Keep trading bitcoin as per the price fluctuations.

Then start focusing on the altcoins. Keep an eye out for Bitcoin Cash. It is following in the tracks of bitcoin and has been even outperforming it, in terms of sheer percentage price increases. So, if you see Bitcoin Cash going in the upward direction and the Bitcoin moving in the opposite direction, you know what to do.

Similarly, some of the best performing top cryptocurrencies include Dash, Zcash, and Monero. All of these offer complete anonymity of transactions on their platform. So, demand for them is ever-increasing.

Final Thoughts

The choice between bitcoins and altcoins makes sense only for long term investors. For traders, the immediate returns matter the most. So, whichever cryptocurrency is offering the best price appreciation, the trader should focus on that cryptocurrency. Since, most trading platforms make it super easy to trade one cryptocurrency for another, this should not be hard.

Leave a reply:

Your email address will not be published.

Site Footer