Whilst Bitcoin remains the most valuable coin in the global crypto market, it is not the only one you should be considering. In fact, there are hundreds of coins out in the market that have the potential for investment profit. It’s important not to sink all of your money into one coin, and instead, diversify your investments.
Why You Should Diversify Your Crypto Portfolio
Truthly, there are many reasons one would want to expand their portfolio. Whilst Bitcoin is the main coin to watch, its value is much higher than it was a few years ago. This means that the price could mean its not worth you investing, if it’s not shown any signs of going up recently. It has outpriced many users from buying, or at least made them look in different directions.
Not just that, but even if you can afford to invest in Bitcoin, if that’s the only coin you’ve invested in, then you risk losing it all. If the coin was to crash, then you risk losing everything. Think of it as a roulette table, where you can put all of your chips onto one number, but it’s unlikely to come up. Whereas if you were to spread your chips onto multiple numbers, then you increase your chance of success.
It’s not good enough to simply buy these coins without thinking ahead. You should ensure you have a strategy in place for buying. You can do this by looking at the market for a set period of time, in order to best assess market trends, and put yourself in the best position in able to predict what will rise. If in doubt, you can work with an investment advisor in order to get assistance in making the right trades.
There are a few different websites where you can buy coins. Mainly you do them through global marketplaces, either private ones where you trade freely, or peer-to-peer trading where you can see each other’s usernames. With these normal exchange site, you usually use an order book to trade but neither the buyer nor the seller has any idea who the other is.
There’s essentially a lot more privacy and anonymity with this method and is considered one of the more common ways to trade currency into Bitcoin, usually with a debit transfer or general bank transfer, sometimes even PayPal.
Peer-to-peer exchange on the other hand, is a much more personal affair. Often, they are likened to a local marketplace as sometimes, face to face meetings may also be required in some rarer cases. There could be a range of information that would have to be exchanged, such as locations, usernames, IP addresses or wallet details.
It should be noted, that many crypto enthusiasts are buying up Bitcoin and other cryptocurrencies as they believe they will one day become the global finance tool, used by governments, public and corporations alike. We are already seeing this a bit, with many online shops allowing Bitcoin to be used as payment. Some banks are even buying as much as they can themselves, to hold the asset for a long-term financial future.
Ethereum
This is considered the second biggest coin on the market right now, directly after Bitcoin. The difference with this coin, is that it works in a more specific area of blockchain technology.
Of course, it does focus on a decentralised distributed ledger, much as other cryptos, but it actually specialises in the creation of other cryptocurrencies, as well as other digital applications. As you can imagine, that makes it quite a valuable asset in the crypto world.
This is because if crypto does well, then you can be sure that Ethereum will rise with it, as it has the tools for success in its blueprint.
Monero
The origins of Monero can be found from the crypto coin known as Bytecoin. This was a coin that crashed a few years ago, leading to Monero coming out in its place. The difference with Monero, is that it’s more focused on privacy.
What this means, is that it is a coin that is focused more on its security and is always looking to innovate. It utilises a unique mining algorithm that can expand block sizes, meaning that if the coin was to reach a maximum amount, then it would be able to create more.
Litecoin
Litecoin was launched only a couple of years after Bitcoin, becoming one of Bitcoins main rivals in the crypto world. These days, it’s fallen a bit off, but is still worth investing into. It’s similar to Bitcoin in many ways, as it is another decentralised currency, but it utilises its miners differently.
Here, the minders work on the network in order to keep the solution secure. What this leads to, is Litecoin having way more active coins on the market, compared to Bitcoin’s maximum. So, there is more on the market for you to buy up, which is a cost-effective way of building up your portfolio.
You can read guides on why Litecoin is worth investing in over Bitcoin, by reading The Traders Of Crypto’s guide to cryptocurrencies other than Bitcoin. They specialise in analysing the trends of different coins, and can point you in the right direction of the market you should be trading on.
Dogecoin
You probably would have heard about Dogecoin at some point over the last few months. It refers to an old meme on the internet, known as Doge. The coin started to rise in popularity and price after Tesla CEO Elon Musk tweeted about, inciting his fans and followers.
Elon Musk is known for his eccentric behaviour on the internet, known for his meme nature, many people bought the coin based off of what he said as a joke, then people started to realise its potential.
It’s important to note that Dogecoin is similar to Bitcoin, in that it is processed through a decentralised network, but the way in which it is bought is different. Usually, you will actually need to trade Bitcoin, or other popular cryptocurrencies in order to get Dogecoin.
Tether
Famously, tether is known as the world most popular stable coin. This essentially means that it serves more purposes than traditional cryptocurrencies. It is used mainly to help provide liquidity and a hedge for market volatility.
A stable coin uses the blockchain like a Bitcoin would, but they are more registered against cash currencies such as the US dollar or the EU euro. They are transparent, meaning that anyone can view the transactional history.
This coin appeals to those that are involved in digital securities. Digital securities are considering one of the means of participating in blockchain technology, whilst obeying regulations. What you get out of it, is an investment opportunity that you can predict, all whilst backed against actual assets in the real world.
Bitcoin Cash
Bitcoin cash is, as you would probably imagine, very similar to Bitcoin. It actually is its own coin completely, contrary to popular belief. It even utilises its own blockchain, away from Bitcoins classic one.
The main purpose of this coin, is to be processed quicker, and improve overall liquidity. It began a few years ago, when miners who were into Bitcoin realised that the blocks of Bitcoin didn’t appear to be a long-term sustainable goal.
This Bitcoin Cash allowed for quicker transactions through similar methods, so it didn’t confuse traders.
