Topic: Why bitcoin is the only cryptocurrency to be used as an investment asset - page 3. (Read 510 times)

Most people that actually consider buying different altcoins as portfolio diversification are mostly doing it because of FOMO because halving is coming, while some are doing it because of their beliefs in altcoin.

Buying gold, and investing in real estate can be another form of investment outside cryptocurrencies which is good, but investing in different altcoin to me is not a wise decision since all of them follow the trend of Bitcoin price to grow.

Apart from Bitcoin, no any other coin is guaranteed, Do Your Own Research and make a decision if you find any altcoin worth of investment.

As of today's price valuation, the market cap value of total crypto is 1.17 Trillion dollars but bitcoin only has 48% of the total share which is 560 billion so the remaining 50% is invested in the so-called altcoins. Debating whether we really need to have any cryptos beyond Bitcoin is pointless since we already have thousands of others which are alive at the moment so it's entirely the users' choice to decide where they want to put their money.

I only prefer Bitcoin because it's proven, and not likely to be changed by the creator but I don't feel the same with any other coin that is why I only prefer bitcoin for investment and even for most trading purposes I just go with stable coin pairs only for day trading purpose.

Bitcoin is decentralized has been what I like about it as the adoption rate is very significant too. What I also like about it is the fixed supply and scarcity.

This is clearly about bitcoin, not advertisment.

About return on investment, it might be a loss for a long time for people that invested at the wrong time. Example are people that invested at $50000. But bitcoin is still going above $50000 again. Even above $100000.

Bitcoin main purpose according to Satoshi himself, is as an alternative payment to fiat currency. But over the years bitcoin has grown in such a way that many have seen it’s potential of been a great investment asset. This could be deduced from some of the advantages of his below;
1. Decentralization
2. Stores of value
3. Great Return on Investment
4. Fixed Number or Supply
5. Adoption rate.

Due to all these advantages some  people have not only taken bitcoin as an investment asset but have generalized it to other cryptocurrencies as well. Some have thoughts that investing in these alternative coins are actually diversification of one’s portfolio. But is this really portfolio diversification?

Diversification of portfolio can be termed the process by which investors, invest in different assets to mitigate a loss been encountered in a particular asset.

Alternative cryptocurrencies cannot be regarded as diversification of portfolio because;
1. Most of all the altcoins follow the same price trend as bitcoin, with just few going higher than it due to hype, which has made many to call them pump and dump coins.

2. Bitcoin is the only true decentralized cryptocurrency and as such eliminates the fear of centralization which is in many altcoins which could be use to manipulate its market.

3. Bitcoin supply limit is what makes it a store of value and also an hedge against inflation, giving it an edge ahead of other cryptocurrencies.

With all these and more, and most importantly the fact that bitcoin price change is actually been followed by other cryptocurrency which are not secure, makes them more risky to be used as an investment asset.

It will be better to look into other assets like stock, gold and real estate for an ideal portfolio diversification

Aside bitcoin, treat alternative cryptocurrencies as pump and dump coins that they are.


Note: I am not advising anyone on investment