By Mary Ann Callahan

The rise of digital currency has created an abundance of new investment opportunities. If you are considering investing in cryptocurrency, one of your first questions is likely concerning what coin to choose. Of course, you have the option of investing in multiple cryptocurrencies, but are you better off spending your Bitcoin to buy alternative currencies or just keeping it and waiting for the value to spike? There are a lot of pros and cons to consider.

2017 was a great year for cryptocurrencies, and this is true for Bitcoin as well as for altcoins. 2018 started out bumpy. While many cryptocurrencies were able to bounce back fairly quickly, others, such as Ethereum, continue to struggle. Yet, overall, the value of the top ten altcoins is expected to increase again in 2018. It all seems like a wild rollercoaster ride, which is out of anyone’s control, but in fact, this is how the cryptocurrency market works.

For beginners, navigating this volatile crypto space can be challenging as it seems like prices fall and rise randomly, often with little warning or explanation. So, which coin to invest in if you want to be on the safe side?

Bitcoin Is a Safe Bet

Bitcoin is the most established of all digital currencies. The community saw the BTC to USD value rise last year by more than 1,000%. Although Bitcoin has a reputation for being volatile, it has managed to overcome every slump that it has had, proving its resilience time and again.

Despite being the most significant cryptocurrency, Bitcoin remains small when compared to major fiat currencies like euro and dollar. At this point in time, it might still be hard to imagine a world where digital currency replaces fiat, but the global economy is shifting towards it. Wide adoption might not take as long as you might think. If Bitcoin becomes a widely used payment method, investments will really pay off. Of all the cryptocurrencies out there, Bitcoin is probably the one that has the most potential to have mass adoption. If you want to earn some extra cash and want to play it safe, Bitcoin is an attractive option.

Another thing to consider is the state of the market right now. The price of BTC has been relatively stable the past few weeks, even as many altcoins like Ethereum have been on downward spirals. One theory is that people have been turning to Bitcoin considering it as a safety net, which would explain why Bitcoin has avoided the struggles that other altcoins are facing right now. Basically, investors were worried that the crypto market was in trouble, so a lot of people transferred their altcoin investments into Bitcoin. They thought Bitcoin would be more stable, and it became a self-fulfilling prophecy.

There are also political concerns. Recently, instability in Turkey has led many people who reside in the area to invest in cryptocurrency to prevent the devaluation of their fiat money. Bitcoin benefited unevenly from this development. Since Bitcoin is the most well-known and reputable digital coin, it becomes the go-to when people need to make quick and unexpected decisions.

What about Altcoins?

The growth of Bitcoin was all the talk at the end of the 2017, but some altcoins, like XRP, had an even better year. Theoretically, you can earn a much bigger profit by investing in altcoins, but it’s riskier. There are over a thousand alternatives to Bitcoin, so choosing one requires a lot of thought and analysis. It is a good idea to avoid less established coins because they will be less predictable. You want to stick to the top ten, or even top twenty coins. If you invest in an altcoin you’ve never heard of, you also risk falling for a scam.

Diversification is important. Even though XRP had an amazing year, you wouldn’t want to invest all your money into it only. A good idea would be to assess the best-performing altcoins and try to predict which ones will continue to experience growth. Right now, enough of the top-rated altcoins are showing signs of success.

Another important thing to consider is fraud. Various altcoins provide their holders with protection against fraud. Things like hacking and identity theft are so commonplace right now that enabling increased security will help altcoins to continue appealing to new investors.

Conclusion

It is difficult to navigate the risks and potential rewards when it comes to investing in crypto because things change so rapidly. The important thing is to do your research. The more analytical price prediction tools you have at your disposal, the better.

There is no right answer for what to invest in. There is a potential for both profit and loss. While Bitcoin might be a smarter investment right now, it would be reasonable to invest in it along with some altcoins. The cryptocurrency market could look completely different in three months from now. You don’t want to base your decision just on what you can see in front of you. You have to think ahead. The major altcoins have already reshaped the cryptocurrency landscape in recent months and there are lots of changes to expect.

About the Author: Mary Ann Callahan

As an expert on Bitcoin-related topics, I’ve found myself as a Journalist at Cex.io – cryptocurrency exchange. I’m working on articles related to blockchain security, bitcoin purchase guides or bitcoin regulations in different countries.