In the crypto universe, every investment decision can be a masterstroke or a monumental misstep. Since its emergence in 2015, the crypto landscape has evolved rapidly. K33 Research explored whether it's better to invest in Bitcoin or try luck with promising altcoins.
Two Investment Strategies
In 2023, K33 Research conducted an experiment to settle this debate. They implemented two strategies from January 2015 to June 2023. The first strategy was to invest $1 in every cryptocurrency entering the top 100 by market capitalization. This meant buying the top 100 in January 2015 and adding each newcomer. The second strategy was more conservative. Each time the first strategy invested $1 in an altcoin, this one invested $1 in Bitcoin. In the end, each strategy had invested $1,009.
Research Results
The results were clear. The altcoin portfolio was worth $6,651, multiplying the initial capital by 6.5. The Bitcoin portfolio, however, stood at $49,934, achieving a spectacular x50. The study revealed intricacies of the crypto market. While Bitcoin showed robustness over the long term, altcoins had notable outperforming phases. In 2017, the altcoin strategy took the lead, driven by Ethereum and XRP (Ripple).
Which Strategy to Adopt?
The crypto world is unpredictable, especially for altcoins. Their high gains can be followed by steep declines. Choosing the right altcoins is tough. Out of over 1,000 cryptocurrencies analyzed, fewer than 100 offered positive returns, about 200 posted losses, and nearly 700 are now inactive or worthless. So, which strategy to adopt? Bitcoin stands out as a reliable asset, providing consistent returns over time. Altcoins, meanwhile, suit those willing to analyze and take risks. Maybe the best approach is to combine the stability of Bitcoin with the selection of promising altcoins.
K33 Research showed that Bitcoin is a more beneficial choice for long-term investments compared to altcoins. However, altcoins can offer significant gains with thorough analysis and risk-taking. The optimal approach might be a combination of both strategies.
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