Introduction
Pick up any article on newspapers or threads on Reddit in the months of January or February 2020 and you would see one issue being discussed the most.
It was how Altcoins (Ethereum, Bitcoin Cash, Litecoin, XRP, etc.) were outperforming Bitcoins. Even though their total value rose to cross the fifty-billion-dollar mark in early 2020 as compared to Bitcoin’s nearly one hundred and eighty billion, a lot of commentators were going gaga over Altcoins.
Then the pandemic struck and economic depression resulted in all financial assets crashing. Bitcoin rose in prominence at a time when no one expected it. Backed by strong investor confidence and rising inflation levels, it left Altcoins well behind.
In this article, we look at a rather new development taking place in the past few months. We speak to crypto experts and financial analysts and try to understand why Bitcoin is outperforming Altcoins.
Top 4 Reasons why Experts feel Bitcoin is Outperforming Altcoins
1. Investors have more clarity on how Bitcoin works-
The original popularity of Bitcoin means that there is certainly a lot of information regarding its origins, technology, and processes. This has made it easier for investors to access information and educate themselves about Bitcoin more than any other Altcoin.
They also point that in the absence of any known inventor, the entire development seems to be very open-source and organic in nature. It also means that the process is more democratic and does not have to suffer from the personal fancies or interests of anyone else.
2. Regulators want to engage with just one Big Crypto-
Generically speaking, all cryptocurrencies follow a similar model. Yes, there are major differences, but do you think regulators would want to go into the same and create specific financial and monetary policies for the same?
For regulators, including governmental authorities, it is easier to deal with the biggest one, which in this case is Bitcoin. Legislations, when they are created, including taxation norms, can easily be applied to one crypto, rather than making it individually for the different ones. For more information, you can visit the official site
3. Altcoins might be the Future, but Bitcoin is the Present-
There is no doubt that Altcoins have a lot of potential in the future. They are promising and are being spun off the latest tech advancements. However, there is still a long way to go in terms of improving processes, navigating challenges, and negotiating with the authorities.
Even though Bitcoin is just a decade-old, it seems to be much more mature and stable than Altcoins. The network system of Blockchain is immutable and works seamlessly to guarantee both speed and security. This means that Bitcoin is definitely the ‘present’ of digital money.
4. Bitcoin Inspires Trust and Goodwill among Investors-
Bitcoin proponents state that barring the price fluctuations and drops, it is still very much the best performing financial asset in the last decade. For new institutional and retail investors, this is music to their ears. The trust factor of Bitcoin is great for the investing community.
Bitcoin and Blockchain have labored hard to build goodwill. Having been declared ‘dead’ for all but ‘hundred times’, they have bounced back and created millions in wealth for investors over the last decade. This makes them great for investors to depend on as a form of investment.
What does Bitcoin’s Rise mean for Altcoins?
Historically, every time Bitcoin has seen a price rise or a Bull Run, Altcoins have benefitted. The same has been true for years now. However, in the past few months, this trend has been reversed.
Experts point out that investors are looking to consolidate their crypto holdings and are moving their money away from Altcoins to Bitcoins. Having just one area to concentrate and focus on seems to be the strategy driving the investor community.
While many predict that Ethereum and others will start seeing a rally in the early months of 2021, others are of the opinion, that it will be Bitcoin that will be leading the crypto charge well into 2021.
HussaiN is a full-time professional blogger from India. He is passionate about content writing, tech enthusiasts, and computer technologies. Apart from content writing on the internet, he likes reading various tech magazines and several other blogs on the internet. Email ID: arrowtricks.pvt@gmail.com
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