Bitcoin came back strong following the dip in markets due to the COVID collapse. Now it’s time to set your sights on altcoins.
Traders worldwide watched in anticipatory panic as bitcoin prices plummeted in March of this year. As COVID-19 related shutdowns rocked global economies, the bitcoin market was among many negatively affected by the pandemic. But the coin performed well, coming back strong following the total market shake out. Rebounding fairly quickly as compared to many other markets. Leading to renewed vigor and interest across the board amongst cryptocurrency traders.
Bitvavo, a site that focuses effort on encouraging new crypto traders, offers multiple digital currencies to invest in. However, newbies seem to only have eyes for bitcoin, which could prove to be to their detriment. Like any other portfolio, diversity of investment is important- even when looking toward cryptocurrencies. As Bitvavo and many other trading platforms offer multiple altcoins for ease of trading, it only makes sense that investors should look to expand their holdings. These are the altcoins they should be watching come next semester.
Why Is Bitcoin So Popular?
What makes bitcoin so much more popular than any other altcoin in history is two-fold: On one hand, the coin is the first of all mainstream cryptocurrencies. Emerging in 2009, the coin took about five years to really gain hold of any reliable market value, but in 2017 the world took notice of the digital currency. As it’s generally used as a store of value and an exciting part of a day trading portfolio, bitcoin began to function less as a currency and more as an asset. Meaning that instead of using it primarily as a type of monetary exchange, it’s more often used as a speculative money maker for stock market traders and investors.
With a wildly volatile pricing structure, the virtual coin offers even new traders a chance to get in on tokens and still make money off of initial buy-in. Bitcoin also behaves in such a way that it can help novice traders quickly familiarize themselves with the cryptocurrency market and underlying technologies, and often acts as a gateway to gain confidence in researching and investing in other altcoins.
What Altcoins Should You Be Watching?
Ethereum has been a long time favorite among altcoin investors and for good reason. The token was created by a bitcoin founding developer, looking to address many of the perceived issues bitcoin may have in the future regarding scalability and function. What was created was an altcoin that not only has investment potential for traders, but also an incredible approach to the benefits that cryptocurrencies and blockchain technologies can bring us.
Following the coronavirus fueled economic collapse, Ether, Ethereum’s token, was hit hard. Taking quite some time to bounce back. However, the drastic drop in value created a much-needed space for hopeful investors and has come back with fervor.
Bitcoin Cash (BTH)
Bitcoin cash has done what few other altcoins have been able to accomplish: creating a bridge between bitcoin and altcoins. Bitcoin cash was one of the first-ever successful hard forks of bitcoin. In cryptocurrency, when developers believe that the structure and/or function of a crypto’s underlying code needs to be changed, they create a proposal. That proposal is then “voted” on by the community at large. Should the community decide to adopt the change in development, then a soft fork is implemented. Changing the code in such a way that it integrates seamlessly with the existing structure of the digital currency.
Should the community not agree on the implementation of change, sometimes the community splits- with diehard fans of the original code on one side and unwavering proponents of the new on the other. This creates a hard fork, where the new code and the community supporting it branches off into an entirely new cryptocurrency. BTH has proven to be an incredibly successful fork since it’s advent.
Litecoin was another early adaption in cryptocurrency technology, debuting in 2011. Incredibly similar in structure and function to bitcoin, litecoin is often referred to as “silver to bitcoins gold”, suggesting that its second-best when it comes to the preferential investment in cryptocurrency at large. The commonality, ease of access, and fast block generation have made litecoin into an incredibly popular choice amongst investors.
A choice that continues to be perpetuated throughout the crypto community, offering favorable use case scenarios and a decent payday for speculative traders. Its value tends to be a bit more stable than it’s bitcoin big brother, so merchants are starting to further adoption of its use as a general currency.
Ripple is arguably one of the most centralized types of cryptocurrencies, working very closely with the private banking sector. What makes Ripple such an exciting investment opportunity isn’t necessarily its day trade value, but instead the value of the technology that the token represents. Ripple was designed as a real-time global settlement network, offering a better choice when it comes to providing instant, reliable, and low-cost international and cross-border payments. The token works hand in hand with many prominent figures in the financial sector, boasting partnerships with big names like MoneyGram, TransferGo, Bittrex, interbank, and a number of others.
The token also came out of its ICO with “pre-mined” coins, meaning that there is no further XRP creation. Instead weighting its value on shareholder’s interaction with its internal market. The lack of mining makes the digital currency much more eco friendly and keeps costs down. All but ensuring continued use and interest.