Introduction
Just search anything about Cryptocurrencies and bitcoin, you will get hundreds of articles explaining why investment in Cryptocurrency is one of the best investment options. And almost every article will contain something related to the following.
— Cryptocurrencies cater to high returns.
— Their potential is hidden, and once the full potential is known, it will be a high demand in the market.
— Digital currencies hold the key to disrupt the traditional financial system.
— Investing in Altcoins can be profitable.
Well, to some extent, these articles are true. But in the Altcoins matter, we hold a different perspective. When it comes down to the Altcoins, we believe that investing in Altcoins is riskier than investing in top Cryptocurrencies.
This article will talk about why Altcoins are not the right digital assets to invest in.
Why Shouldn't You Invest In Altcoins?
Altcoins are the digital currencies at the lower level of the food chain in the Crypto industry. That means only a few people trade and exchange in Altcoins. The other reason for the Altcoins being less popular is that most of the Altcoins are regulated in a restricted area. That makes it limited to one region.
The fun fact about Altcoin is that though they are Cryptocurrencies, they have a particular region where they are regulated.
If you are thinking of investing your capital in Altcoins, we will warn you not to. Here are the reasons why.
1. Restricted To A Particular Region
We hate Altcoin because they are restricted to one particular region due to a lack of popularity. Most of the Altcoins are not popular in the industry, which is why people are not aware of them. Hence, nobody spares a thought of using them as an asset on the exchange platforms.
For instance, Litecoin is an Altcoin, but very few are aware of its existence in the Crypto trading world. Hence, only a few people trade in Litecoin. The lack of awareness has caused its regulation to a limited area.
2. Low Market Cap
Altcoins are the best alternatives for the likes of Bitcoin and Ethereum. But the problem is that it has very little market capitalization compared to the other Cryptocurrency. This low market cap indicates how much people trust these Altcoins.
Hence, if the Crypto bubble ever happens, these Altcoin bubbles will be the first one to burst. So, it is advisable to invest in Cryptocurrency that has a bright future ahead.
3. Less Profit
There is nothing in Altcoin. The security level is low, the market cap is small, the trading volume is very less, and the profit you make with Altcoin is comparatively low. Altcoin works on the same principle as Bitcoin. Hence, the price fluctuation of the Altcoins also varies with the daily trades. However, with low market trades, there are hardly any opportunities for you to make a profit in the short term.
Unlike in the Bitcoin market, where every second is vital to profit, the Altcoin market hardly reaps any profit.
4. Highly Volatile
An altcoin is highly volatile. Though it might not be as high as some of the top Cryptocurrency, yes, they are volatile. Due to this nature of the market, it is very hard to find an optimal entry point.
Even if you enter at an optimal entry point, there are only a few instances where you will be sure of making a profit. As Altcoin's market is very small, even a small trade and transaction can greatly affect the market.
5. Lack Of Presence On Trading Platforms
The worst part of the Altcoin investment is that there are only a few platforms where you can trade in Altcoins. The Altcoins are barely famous in the trading industry; hence, people hardly trade in Altcoins. This has made trading platforms complacent about adding the Altcoin exchange pairs.
The Bottom Line
Altcoins are certainly one of the best digitals assets that you can invest in. However, we shouldn’t forget about its flaws while investing in Altcoins. We have put forward some issues that you might face with the Altcoins investment. If you have other problems to share, feel free to do so.
