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Are you still buying Bitcoin (BTC)? What about the altcoins?

A friend and an ardent follower of the digital asset space asked me the above questions in the first week of August. Mark you; this was the time Bitcoin had taken a huge plunge from trading roughly at $7,500 only to find support slightly above $6,000. While my friend is in love with the blockchain technology, he is not into investing in the cryptocurrencies themselves. And me, on the other hand, I have grown to like the myriad opportunities the digital assets have brought into the world economy in less than a decade.

Many people refer to the cryptocurrency industry as a replica of the dot-com era. Some even go ahead to say that the virtual currencies will reach a bubble just like the internet bubble between 1995 and 2000. I am afraid there is not much I can say about this period in history simply because I was barely 10 years old when it happened. However, there is a lot I can tell you about the cryptocurrency era, ushered in by the introduction of the blockchain technology in 2008 and Bitcoin Core (BTC) in 2009.

On the other hand, I cannot fail to realize the fall that Bitcoin price has experienced since the historic rally in December 2017. Bitcoin is currently trading at $6,519, although it exchanged hands marginally below $20,000 at the end of last year. This is a drop of more than 70% in less than 10 months. To answer my friend’s question, yes I am Buying Bitcoin and here is why?

  1. Bitcoin Rally

The current price situation is not pleasant at all. In fact, the dip to the primary support at $5,800 spooked most of the long-term investors. However, many cryptocurrency expert analysts have maintained that Bitcoin will rally towards the end of 2018. While we are already deep into the third quarter of the year the predictions are beginning to feel more like speculations. However, Bitcoin dominance continues to rise in the market. It had dropped to levels slightly above 30% In January 2018 but it is currently at 53.2%. Last year there was a drop in Bitcoin dominance to 37.81% followed by a surge that culminated in the historic rally in December.

  1. Bitcoin ETF

Bitcoin exchange-traded-fund (ETF) has become a hot topic for discussion in the crypto industry. An ETF is a marketable security that is used to track an index, bond or commodity. It is traded like a normal stock on a stock exchange. ETFs rise and fall in price as they are traded on a daily basis. However, due to their higher liquidity as well as lower fees, they are usually less risky and therefore a preferable trading option by both individual and institutional investors.

Bitcoin ETFs have become desirable especially among traders and investors but none has been approved so far while many proposals for the same have been disapproved. The US Securities and Exchange Commission has rejected at least 11 Bitcoin ETFs proposals this year while one has been pushed to the end of September. Among the 11, SEC said that it will review 9 rejected ETFs. The deadline for a Bitcoin ETF is 2019, therefore there is still time for approvals to be made. However, many investors and institutional investors are looking forward to the time when an ETF application will go through. The market will start to see a fresh influx of funds from these investors and this could trigger a rally.

  1. Altcoins: Not a Better Alternative

There are over 1,800 cryptocurrencies listed on CoinMarketCap. The price of most of these altcoins is highly correlated with Bitcoin. While Bitcoin has lost over 70% of its value, some of these altcoins have recorded losses over 90%. Bitcoin has shown the potential for recovery but the majority of the altcoins are walloped by selling pressure unable to make significant progress.

In conclusion, the above reasons are meant to help you as an investor to make a decision between buying altcoins and sticking to the King of the cryptos, Bitcoin. However, it is essential that you carry out more research before buying any digital asset.

 


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1 comment

  1. Hi there! I am using coinbase to buy bitcoins but few days ago I found linkkoin.com, and I am surprised how much easier I can buy bitcoins there. Someone else tried to buy there?

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