Which Cryptocurrency To Buy: Top Three Bitcoin Alternatives

The first thing to say about cryptocurrency investment is that it does not provide a guaranteed windfall in the short term. There was a time when cryptocurrencies could seem to do no wrong but the stories of hugely impressive financial gains seem to be consigned to the past.

However, for those who believe in the ethos of cryptocurrencies and blockchain technology, investment can still be a worthwhile enterprise and can deliver rewards for those who are willing to be patient. After all, as Eric Rosenberg says while writing for The Balance,

“The cryptocurrency markets have calmed down a bit since that record high, but many Bitcoin evangelists still claim Bitcoin to be the currency of the future.”

This being the case, investors need to ask themselves the question which cryptocurrency to buy? Is Bitcoin still the best choice?

Look around online and you’ll find all kinds of advice about picking altcoins to invest in. But, to choose the coin that is worth your investment, you need to ask some questions about what it is you want from a cryptocurrency.

Are you seeking a stable project that could produce decent gains on your investment with the lowest chance of failure? Or, are you hoping to put a little money into a high risk, high reward coin and hope for it to shoot the moon? If it’s the latter, you are obviously going to want to study small market cap coins.

We are not in the business of giving advice on whether it’s better to buy Bitcoin or any particular altcoin, and with so many different obscure projects out there, there simply is not enough time to outline all the pros and cons of each option. Instead, we would rather provide potential investors with advice about what to look for in a small market cap coin, along with some suggestions about the best cryptocurrencies to invest in.

Which cryptocurrency to buy – diversification

There is no one best option when it comes to which cryptocurrency to buy. Any investment in cryptocurrency carries some risk with it. The best way to succeed in the cryptocurrency market is to diversify.

This is due to the fact that different cryptocurrencies have different use cases and promise disruption across various industries. For instance, XRP is a cryptocurrency that is used as part of the Ripple Payment Network. The point is that choosing to invest in a number of different cryptocurrencies is the optimum way to hedge your risk. Given that this is the case, let’s examine how to go about choosing the coins to include in your cryptocurrency portfolio.

Look at the Problem the Coin Purports to Solve

The first and most important thing to consider when picking a small cap coin is whether people will actually need or want to use it. To answer this, look at the project’s whitepaper. Find out the specific problem that the coin seeks to address. Is it simply a means of payment? Is it to be used with a specific application? If it is, what does the application do and is a decentralized, tokenized, blockchain-based solution the best way to achieve the ends set out in the project’s documentation?

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Jeremy Biberdorf is the founder of Modest Money. After working many years in the website marketing industry, he decided to take on blogging full time ...

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