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Should I Sell My Altcoins for Bitcoin?

swap altcoins for bitcoin

January 18, 2021 | 

2203 Views | 

JOHN K MWANIKI | 

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There are many coins in the cryptocurrency market, and it is easy to be torn between which one to invest in. The cryptocurrency boom is not about to stop, and if anything, more coins will be rolled out in the coming years.

This might change the crypto market. Knowing whether to sell altcoins for bitcoin will allow you to make an informed investment decision. 

This read will arm you with adequate altcoins and bitcoin knowledge to help you make the right move.

This article will highlight altcoins and bitcoin as investments. It will also cover the advantages and disadvantages of both currencies.

Altcoins for Bitcoin: which cryptocurrency is the best investment?

To get answers to the dilemma of whether you should sell your altcoins for bitcoin, you need to know what the two are.

The altcoin is a general term for all the other cryptocurrencies available apart from bitcoin. The name was coined from 'alternative.' Currently, there are over 5000 altcoins produced in the world. You must be startled by the number of altcoins available in the world. The reason behind the high numbers is for one; anyone is allowed to create it. Some of the altcoins are also produced to do the things that bitcoin cannot do. 

Bitcoin is a decentralized currency that can be exchanged from user to user. Bitcoin was created in 2009 to provide investors with the benefit of a decentralized currency with lower transaction fees. Bitcoin is the largest cryptocurrency with immense user masses. 

Understanding altcoins and bitcoin

Should you sell your altcoins for bitcoin? A detailed look into the advantages and disadvantages of cryptocurrencies will tell. 

Bitcoin 

This is the first cryptocurrency to be mined and currently the most prominent, boasting over 63 million wallets.

Advantages

1. It is decentralized

Bitcoin is the most decentralized cryptocurrency. While the users' identity is obscured, you can see the flows of the cryptocurrency. This also provides the freedom that the fiat currency does not since it is centralized. 

Decentralization eliminates the need to have an intermediary for transactions, which also reduces the fees. Bitcoin is free from corporate and government interference.

2. Good return on investment

This is something that would probably make you sell altcoins for bitcoin. The return on investment is promising due to the recognition of the cryptocurrency. It has a unique store of value and has a finite supply, thanks to a large pool of miners. The price of bitcoin continues to rise, resulting in an unprecedented return on investment. 

The low transaction fees for bitcoin are also behind the cryptocurrency's good returns.

3. Widespread use

Bitcoin is the most used cryptocurrency. Selling altcoins for bitcoins will be a good move because bitcoin is the most known and accepted. Banks and investors are backing bitcoin, which means there are ready sellers and buyers. 
Bitcoin users are committed to the development of the cryptocurrency and will be there even years from now. 

Disadvantages

1. The spike of bitcoin price

One of the reasons that might make you reconsider selling altcoins for bitcoin is its big spike since 2017. Such a big spike is a sign of an imminent drop, which is risky for investors. 

2. A risk of high transaction fees

As aforementioned, bitcoin was created with the aim of providing lower transaction fees for the users. This was the cryptocurrency's selling point against traditional currencies. However, the risk is that the miners are allowed to select the transaction process; they will definitely go for the one with a higher transaction fee.

3. High consumption of energy

Environmentally conscious investors may want to look at more eco-friendly cryptocurrency. Bitcoin mining consumes high energy, which means imminent damage to the environment. 

Altcoins

There are over 5000 altcoins available, and more in the development process. Some like Ethereum are in high demand, while others are ending gradually. Here are some advantages and disadvantages of alternative digital currency. 

Advantages

1. They have unique features

Apart from the fact that they can be a fall back plan for cryptocurrency investment, altcoins have special features. The unique features can offer superior usability. For instance, licensing management.

2. Scalability

Most of the altcoins have more chances of evolving in the future and being used in a wide range of industries. Investors would love to utilize the different processes and systems that come with an altcoin. 

Disadvantages

1. Lack of exposure

One reason why investors go for bitcoin is its acceptance and widespread use. Well, this is not something that altcoins enjoy. They are yet to receive the level of acceptance that bitcoin has, and it might take some time before they catch up with bitcoin.

2. Limited use

Unlike bitcoin, altcoins are still limited when it comes to the way they can be used. This goes back to its level of exposure and acceptance. Since it is not widely accepted with a large community of users and miners, limited development on its use is done. This factor makes investors choose bitcoin since it can be adopted in several ways. 

Is it a good idea to sell altcoins for bitcoin?

Now that you are in touch with the advantages and disadvantages of cryptocurrencies, it is easier to choose an investment. It is evident that bitcoin is more popular, developed, and used. This does not mean that altcoins are not valuable. They still are, and they also have a promising future. 

Whether to sell altcoins for bitcoins will be determined by what you are looking for in the investment. If you are looking for high returns, then you can sell it. Also, you have the option of hedging your investment by diversifying with altcoins. They can be a great fall back plan if bitcoin turns out to be risky. More so, altcoins like Ethereum are also widely accepted and can be a great alternative. 

Evaluate both cryptocurrencies' pros and cons to make an informed choice, which will work best for you.

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