Table of Contents
Introduction
Bitcoin is the world’s largest cryptocurrency by market cap and easily the most popular digital asset within and outside the crypto sector. However, several altcoins are as vital to the crypto industry as Bitcoin and offer more use cases. Although they are not as old as Bitcoin, many altcoins have built communities, returned significant profits to investors, and have generally reduced Bitcoin’s dominance in the cryptocurrency market. Considering their successes and individual metrics, altcoins are trusted options for trading and investment in 2024.
Reasons to Invest in Altcoins
- Varied Use Cases and Applications: Altcoins generally satisfy many more use cases than Bitcoin. Despite its popularity, the Bitcoin network is less dynamic than many altcoin blockchains. For instance, Ethereum, the world’s second-largest crypto network, is the basic framework supporting most of the decentralized finance (DeFi) sector. In addition to Ether, altcoins like Avalanche (AVAX), Chainlink (LINK), and Uniswap (UNI) also significantly contribute to the DeFi sector.
In addition to DeFi, many metaverse services, entertainment networks, and governance platforms use altcoins. Online casinos, for instance, no longer limit their support to Bitcoin and are now expanding offerings. While gamblers can find a trusted Bitcoin casino in any online toplist for 2024, Michael Graw explains how players will quickly find that these establishments also support multiple altcoins, including Ether (ETH), USDT, XRP, Dogecoin (DOGE), and many more. As their use cases increase, altcoins will likely see more adoption and significant price increases.
- Correlation with Bitcoin: Many altcoins tend to follow Bitcoin’s price movement, rising and falling with the king coin. While this is not a perfect correlation, the likelihood is high enough to anticipate that some altcoins will blossom along with Bitcoin. Currently, there are several reasons analysts believe will favor Bitcoin and pump its price. Firstly, the United States Securities and Exchange Commission (SEC) approved spot Bitcoin exchange-traded funds (ETFs) in January. The active ETFs have now attracted more than $7 billion in net inflows since they began trading on January 11. Another reason for an expected Bitcoin rally is the halving event in April. A deflationary feature that controls the introduction of Bitcoin in circulation, the halving usually causes a scarcity, eventually pumping Bitcoin’s price. Since the chance of a Bitcoin rally is high in 2024, investors may consider the same possibility for one or more trusted altcoins.
- Diversification: A general rule of thumb for investments is diversification. Experts and analysts agree that spreading funds across multiple channels and assets is the best way to mitigate investment risk. Instead of keeping funds in Bitcoin alone, investors can distribute their holdings across altcoins, carefully selecting promising options that are likely to yield returns based on specific metrics.
- Potential For Larger Profits: In many cases, the inherent volatility of decentralized cryptocurrencies works in favor of long-term investors. This is evident in the Bitcoin market, which returned 160% in year-to-date (YTD) gains last year. However, several altcoins outperformed Bitcoin, returning more profits to hodlers and investors. For instance, a report stated that as of December 19, 2023, AVAX and Solana (SOL) were up 270% and 630%, respectively. Both assets eventually ended the year up 262% and 950%, according to data from CoinMarketCap. The price movements show that while Bitcoin is trusted for its popularity, age, and deep liquidity, investors may enjoy more returns from a select list of altcoins.
- Access to New Crypto Markets: Altcoins are an excellent way for investors to easily enter emerging markets. These assets function as the lifeblood of innovation in the cryptocurrency sector and can easily be used across networks, especially on interoperable blockchains. Holders have direct access to join new projects pushing the boundaries of innovation through DeFi and non-fungible tokens (NFTs). In the last few years, many investors have made significant returns by simply purchasing and reselling NFTs. In 2021, an NFT from the Bored Ape Yacht Club collection, minted at $189, rose to $109,816. The issuer, Yuga Labs, also minted other collections, including one called Mutant Apes. In the same year, the minimum price for any Yuga Labs ape hit $140,000. Unfortunately, these opportunities are not available on the Bitcoin network.
- Early Adopter Advantage: Altcoins allow investors to become the first members of a new community. New altcoins launching an initial coin offering (ICO) or presale this year may help strengthen an investor’s portfolio if they can get in early and hold their assets until a bull market. However, investors should be careful to only invest in new altcoins with solid development teams, provable use cases, and proper tokenomics.
Conclusion
Investors in the crypto market do not have to abandon positions in Bitcoin. However, there are several reasons to expand investment portfolios to allow one or more altcoins. These assets are proof of the industry’s changing landscape, as is their growing acceptance at crypto gambling sites and online stores, which indicates the chance for significant rewards and unique opportunities as adoption improves. With adequate research and enough due diligence, holders may enjoy returns from strong altcoins in 2024. However, investors should note that researching new altcoins is essential to reduce the chance of falling victim to a fake ICO, pyramid scheme, or exit scam.
