The Altcoin Rises
Bitcoin might be the King. But for how long?
On May 11, 2020, the crypto world experienced the phenomena knows as Bitcoin halving. For those who are still a little looney-toons regarding this phenomenon, here’s the lowdown. Moral of the story is that, as the Bitcoin supply decreased and its 21 million market cap slowly approached, it was widely accepted that the low supply and high demand will increase the price of the cryptocurrency back to its previous highs. Basic business right? Wrong!
BTC prices fell and after briefly holding steady, are only just rising above the 10000 USD range. Surprise eh? Well, we are not done yet. Because while the most valuable crypto coin wasn’t showing its expected gains, some other cryptocurrencies shot to outer space.
There was no SpaceX rocket nor a Tesla Roadster involved. These “altcoins” bumped up in their market value thanks to the entire underlying system of cryptocurrency: investor speculation.
But what exactly are these “Altcoins?”
Altcoins, in theory, is a combination of two words, ‘Alternative’ and ‘ Coins.’ What they essentially are in the crypto world is any other coins, apart from the big daddy BTC. Bitcoin (BTC) was the first proper crypto coin available to the masses. To this day, despite its many highs and lows, it remains the most valuable crypto asset. More people, even those who have little to no vested interest in investments in digital currencies, can name this rockstar.
Altcoins are like the forgotten sibling. They may come from similar parentage (underlying blockchain technology) and perform very well in school (i.e. the crypto market), but because BTC came first and is more popular, the Alt’s are shunned away.
Well, not anymore. While Bitcoin’s value has seen a very impressive increase of 40% since the start of 2020, it’s alternative counterparts like Ethereum(ETH), Bitcoin Cash(BCH), and Bitcoin SV (BSV) have seen rises of 100 to 200%.
They have more than doubled their value. In 6 months.
There are very little to any other asset classes which have seen huge gains in such short periods. In short, if you had ‘invested’ right you would have become Richie-Rich.
But why are Altcoins staging a comeback?
Here’s a disclaimer: putting your money into crypto coins, whether it be BTC or it’s other brothers and sisters, isn’t really ‘investing’. The coins have no inherent value to them. All of it is pure and simple ‘speculation’.
You speculate/hope that whatever you are buying now will cost more later. You speculate that one day the price will drop within your budget. It’s similar to thinking and hoping Donald Trump would make more Presidential decisions as an…um…President. The only difference is that in Trump, there is well…
Over the years and after multiple speculations, Bitcoin has become very valuable. Many beginner crypto investors don’t have that kind of disposable income to buy one full BTC. Buying altcoins represents a suitable strategy for those who are testing the waters. With the COVID-19 pandemic keeping people in lockdowns and with the general public’s interest in the crypto rising year on year, more people began testing the waters. Due to the impressive increases in crypto infrastructure and increased security, stability, and usability, buying crypto has never been easier.
Demand increases, speculation increases, the price goes up.
Furthermore, especially during the initial stages of the pandemic, almost all cryptocurrencies lost value due to massive sell-off from people and ‘investors’ looking for capital. As the pandemic progressed and things became more stable in other countries, altcoins were on the market for bargain prices. A buying frenzy started and now they are in a bull run.
(A bull run is not the gory spectacle taking place in Spain, but a term used by investors to signify an upward trend in value for a certain period. Usually without actual bulls and the occasional Spaniard involved)
There’s is also the long term romanticism of altcoins. Simply put, many of the ‘Alternative-coins’ are at the pricing and crossroads Bitcoin was at during its infancy. One BTC went from costing a few dollars to nearly twenty thousand. Its stellar rise was so unexpected and the people who jumped in on the bandwagon early are now millionaires and billionaires. Even somewhat similar results will give huge returns. And this time no one wants to miss out.
(I am not endorsing you to invest your life savings into crypto. You can gain money but you can just as easily lose it all. Getting educated and playing it slow helps)
Altcoins will rise and fall. They might see an overall uptrend or they might come crashing down after its ‘druggie high’ wears off. At the end of the day, however, will we ever see Altcoins go full Zeus on daddy Kronos BTC? It will take some time for such a coup de grace, but like Justin Bieber once said: “Never Say Never.”
After all, it’s speculation anyway.
