Bitcoin is back making headlines all across the web, ranging from financial news outlets to mainstream media. But this time around, the coin is trading at prices of $50,000 and more making the cost of each coin out of reach for many investors. Between the extremely high cost per BTC and the fear that some other cryptocurrency similar to Bitcoin comes along and unseats the current market leader, investors instead are seeking alternatives to Bitcoin or investments like Bitcoin that can provide a similar return on investment.
This guide is designed to shed some light on what coins are the best Bitcoin alternative, if you should buy cryptocurrency other than BItcoin, or if it is worth it to invest in Bitcoin instead of all of the rest.
Bitcoin was first launched by Satoshi Nakamoto as the first ever cryptocurrency and introduced blockchain distributed ledger technology to the world. Cryptocurrency technology offers a host of benefits that have the potential to disrupt many industries, but none so more than the face of finance.
The underlying technology has dozens of additional use cases beyond the Bitcoin blockchain and sending BTC to and from addresses, and thus a world of altcoins were created following its release.
The crypto market now consists of thousands of altcoins, most of which have little to no value at all. Even though they are like Bitcoin or even bear the Bitcoin name (hard forks such as Bitcoin Cash) they are considered alternative cryptocurrency assets called “altcoins.”
Some of the first coins to follow Bitcoin and gain mass adoption are among the best alternatives to Bitcoin on the market today.
Ethereum is the top ranked altcoin and has the second largest market cap overall, therefore it is currently the best Bitcoin alternative overall for crypto investors and traders. However, Ethereum isn’t at all like Bitcoin and targets a completely different market and usage application.
Ethereum is both a good alternative to Bitcoin and a complement to investing in Bitcoin. Bitcoin targets a completely different investment narrative. Bitcoin’s appeal is digital scarcity and its use as a store of value. Ethereum, however, cryptographically binds coded agreements called smart contracts into ETH transactions. Ether is the token that powers the Ethereum blockchain.
Ethereum is one of the better investments in the crypto market both due to the ROI it has provided investors, but also due to how central it is to the rest of the market. Most altcoins are built on the Ethereum ERC 20 token standard, and all of DeFi, also called decentralized finance, relies on Ethereum as its foundation.
Ethereum could potentially outperform Bitcoin simply due to how large the Bitcoin market cap is comparatively, however, due to the large Ethereum supply, the cost per coin will not reach the same heights as Bitcoin will some day. Still, Ethereum could some day reach the prices Bitcoin trades at currently, ranging in the tens of thousands of dollars.
Ethereum makes a bad alternative to Bitcoin as a store of value. Bitcoin’s 21 million BTC supply is something that is transparent for all to see. That total max supply of Ethereum isn’t even known, making it less reliable. Ethereum also has several “Ethereum killers” out to get it, and gunning for it. And while technically everything is also competing with Bitcoin, few coins are so heavily targeted at beating it as Ethereum has.
Ethereum has also started to show some signs of aging, and scaling problems that hopefully ETH 2.0 addresses. Ethereum 2.0 is a coming update that will increase the speed and throughput of the Ethereum blockchain. Until the upgrade is complete, DeFi could keep ETH transaction fees high making the platform much less usable by the day.
Ethereum makes a great spot investment for a long-term hold, but because of the notorious crypto market volatility, Ether trading can be highly profitable and can be used to offset losses during bear markets, and even increase ETH and BTC holdings.
Ethereum is one of a handful of other altcoins trading alongside Bitcoin on PrimeXBT. Ethereum trading on PrimeXBT is available on the ETHUSD and ETHBTC trading pairs. Learn how to trade Ethereum
Ripple is a name given to the XRP token which powers the Ripple blockchain protocol. Ripple is the parent company that founded the XRP token. Ripple executives have recently come under scrutiny from United States regulators, citing that the token is a security.
Ripple makes a good alternative to Bitcoin for those that prefer a more centralized approach to cryptocurrencies, or expect big banks to win in the end. Bitcoin lets users become their own banks, while Ripple works directly with banks to onboard them onto the Ripple protocol. Ripple is also a great alternative to diversify a portfolio with Bitcoin for these same reasons.
Unfortunately, Ripple’s value as an alternative has been harmed by potential SEC regulatory force. A legal battle has brewed between the US regulator and Ripple executives. The SEC says the XRP token is a security because it isn’t as decentralized as Bitcoin. This makes it a bad alternative to Bitcoin.
Because XRP is on shaky ground with the SEC, investing in Ripple isn’t recommended currently. However, the XRPUSD and XRPBTC trading pairs on PrimeXBT are still currently available, allowing traders to still access this market and profit from the current wild volatility. Learn how to trade XRP
Certain aspects make Bitcoin similar to Litecoin much more so than other altcoins. They even share the same source code. Litecoin has remained in the top ten crypto assets by market cap for several years.
Litecoin has only 84 million LTC just like Bitcoin’s 21 million BTC. They’re both built on the same code, and have a similar block reward halving mechanism that’s been proven to increase prices in Bitcoin. Litecoin is often referred to as digital silver next to Bitcoin as digital gold.
Litecoin has earned itself a bad reputation over recent years as an alternative to Bitcoin. The asset just isn’t performing on par with the rest of the crypto market, and long-standing negative sentiment could be keeping prices at bay.
Litecoin makes a great spot investment like Ethereum, as well as an asset to trade due to the volatility it provides. Litecoin had a tough couple of years due to the project’s founder selling his assets, but ultimately is beginning to turn around. Learn how to trade Litecoin
Just like new technologies have come along after Bitcoin, new waves of altcoins have emerged that are now even aimed at beating other altcoins, creating an entire new set of alternatives to Bitcoin for crypto investors to consider. From payment coins like Bitcoin and Litecoin, have also emerged utility coins, exchange tokens, stablecoins, and so many other technologies.
Here are some of the most promising projects in the crypto space that investors often consider as alternatives to Bitcoin.
EOS has been dubbed an “Ethereum Killer” more so than a Bitcoin similar asset. EOS is the token that powers the EOS network. Both the asset and protocol were created by Block.One.
EOS isn’t anything like Bitcoin, but it makes a solid compliment to a portfolio.
EOS isn’t a bad alternative to Bitcoin, but because it is so different it doesn’t actually compete for the same market share.
Investing in EOS has merit, as the asset could someday beat Ethereum and give Bitcoin a run for its coins. EOS is also one of many altcoins trading on PrimeXBT, both via the EOSUSD and EOSBTC trading pairs.
Monero builds on Bitcoin’s initial goals of privacy, and makes transactions unable to be traced back to the sender or receiver. Its privacy focused features are both a benefit for the coin and its worst selling point. It has unmatched value for cyber criminals and those seeking to hide their privacy, but regulators distrust the coin and seek to crack its code.
Monero makes for a good alternative to Bitcoin for those that care more about privacy than investment returns, or want to use the cryptocurrency on the dark web.
As an actual investment, Monero makes a poor alternative to Bitcoin. The ROI is nowhere near as high, and privacy coins don’t have the liquidity as other coins and few exchanges offer them.
Monero is the villain of the crypto market, and therefore not a good investment by comparison. Bitcoin encourages a more inclusive financial world. Monero is primarily used by hackers and dark web marketplaces as the coin of choice.
Stellar, which is short for Stellar lumens, is the name of the XLM token. XLM is very similar to Ripple’s XRP, and both were founded by early crypto pioneer Jed McCaleb. Today, McCaleb leads The Stellar Foundation which helps market the open source project aimed at providing banking solutions for the unbanked.
Stellar, like Ripple, targets a completely different market than Bitcoin, specifically, cross-border payments.
Stellar has such a large supply that it will never reach the price per coin that Bitcoin has. It is mathematically impossible. Stellar had to even burn a portion of the supply to make the coin more competitive.
Stellar also has fallen out of the top ten cryptocurrencies by market cap, and has next to zero buzz during the current bull market. Stellar might be one of those crypto alternatives that has already begun to lose to Bitcoin and is tapping out.
Dogecoin has enjoyed recent success thanks to celebrities and the likes of Elon Musk promoting the cryptocurrency token online. Dogecoin features the popular Shiba Inu dog meme “Doge.”
Dogecoin has been bringing investors incredible gains as of late, making many ask if it’s a good alternative to Bitcoin. In very short bursts, Dogecoin can outperform Bitcoin, but any rallies are short-lived and profits flow back into Bitcoin.
Dogecoin was literally created as a joke, and even the coin’s creator doesn’t understand why the coin is pumping recently. Even though Elon Musk likes it and so do other celebs, the unlimited supply and other negative features make it a poor investment.
Dogecoin is only good for getting lucky and riding the success of a pump and dump. Getting on the wrong side of the trade here can be devastating to capital. Don’t invest in Dogecoin.
With so many altcoins out there, and Bitcoin a new and sometimes complicated technology, it is bound to leave investors scratching their head regarding some of the most important topics. Here is a list of the most commonly asked questions to try to clear up any remaining confusion.
So far, no coin has been able to replace Bitcoin, and no coin might ever do so. Bitcoin alternatives can still act as a complement to investing in Bitcoin and hedge against the chance that Bitcoin does indeed get replaced some day.
Better, like beauty, is subjective. What is appealing to one investor might not be ideal for another. Learning which each altcoin offers will set up the investor or trader for the most success when considering Bitcoin-like assets.
The biggest reason investors search for Bitcoin alternatives is because the cost of owning one full coin is so high, but why? There are dozens of reasons, but most importantly the underlying network and the 21 million hard capped supply.
Investing in Bitcoin is never a bad idea, An investment in Bitcoin at this point in time has only been profitable, as the cryptocurrency is setting new highs each day. Even if you don’t believe in Bitcoin, it is worth diversifying into the asset and getting some exposure. No exposure is more risky at this point.
This is also subjective, but currently, based on market cap and potential alone, the best alternative to Bitcoin currently is Ethereum.
Bitcoin is the most likely answer, but it is impossible to say. Bitcoin is the best performing asset ever, but altcoins are often known to outperform Bitcoin at times. When you get in and out matters most, but a portfolio primary in Bitcoin is advised.
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