The sudden increase of new currencies entering the market is a demonstration of the rising fame of cryptocurrencies. There are over a thousand new currencies (coins and tokens) aside from Bitcoin and Ethereum. Predicting which coin to invest into and whether that should be held for long term or short term is very difficult.
The primary question now is;
Is it worth trading Bitcoin for Altcoins? Or would it be better to just simply keep your Bitcoins?
In order to dig into that question, we made a comparative analysis of the returns which you can get if you invest completely in Bitcoin or in altcoins.
Let's create a hypothetical situation to show a better picture of the potential profit here on after. Let's say, a year ago from today. you to invested $1,000 to each of the top 10 altcoins for a total of $10,000. On the other hand, suppose you had put all of that $10,000 into Bitcoin. Here’s how the 2 scenarios would’ve played out.
Scenario 1: Investing 10k in Bitcoin
Price Oct 25 2017: $5757
Price Oct 25 2018: $6461
ROI= 12.22%
Approximate GAIN = $1,222 on your $10k
Peak Return Potential
12/16/17 $19,380= 446% ROI
Low Return Potential
Price never went below $4341
Scenario 2: Investing $1,000 Each in the Top 10 Alt Coins
As follows are the top 10 altcoins based on market capitalization (size) in October 2016. Prices are approximated to the nearest dollar, while the total value includes your initial capital.
1. Ethereum (ETH)
Price Oct 1 2017: $291
Price Oct 1 2018: $230
ROI= -20.9%
Approximate LOSS = $209 on your $1k
Peak Return Potential
01/13/18 $1385= 476% ROI
Low Return Potential
09/11/2018 $177= -39.17% ROI
2. Ripple (XRP)
Price Oct 25 2017: $0.2
Price Oct 22 2018: $0.46
ROI= 130%
Approximate GAIN = $1,300 on your $1k
Peak Return Potential
01/04/18 $3.35= 1,575% ROI
Low Return Potential
11/01/2017 $.19= -5% ROI
3. Litecoin (LTC)
Price Oct 25 2017: $55.4
Price Oct 22 2018: $52.31
ROI= -5.57%
Approximate LOSS = $55.7 on your $1k
Peak Return Potential
12/19/2017 $358 = 546% ROI
Low Return Potential
10/11/2018 $51.3= -7.4% ROI
4. Ethereum Classic (ETC)
Price Oct 25 2017: $10.54
Price Oct 22 2018: $9.66
ROI= -8.35%
Approximate LOSS = $83.5 on your $1k
Peak Return Potential
12/20/2017 $43.64 = 314% ROI
Low Return Potential
10/11/2018 $9.54= -9.48% ROI
5. Monero (XMR)
Price Oct 25 2017: $86.10
Price Oct 25 2018: $105.28
ROI= 22.27%
Approximate GAIN = $ 222.70 on your $1k
Peak Return Potential
01/07/2018 $479.36 456.74% ROI
Low Return Potential
08/14/2018 $81.72 -5.08% ROI
6. Dash (DASH)
Price Oct 25 2017: $289.36
Price Oct 22 2018: $155.58
ROI= -46.2%
Approximate LOSS = $462 on your $1k
Peak Return Potential
12/20/2017 $1,534 = 430% ROI
Low Return Potential
08/22/2018 $138 = -17.74% ROI
7. Augur (REP)
Price Oct 25 2017: $17.84
Price Oct 22 2018: $13.7
ROI= -23.2%
Approximate LOSS = $232 on your $1k
Peak Return Potential
01/12/2017 $107.55 = 502% ROI
Low Return Potential
10/11/2018 $11.29= -36.7% ROI
8. Waves (WAVES)
Price Oct 25 2017: $1.33
Price Oct 22 2018: $1.95
ROI= 46.6%
Approximate GAIN = $466 on your $1k
Peak Return Potential
12/19/2017 $17 = 1,278% ROI
Low Return Potential
01/30/2017 $.143 = -9.48% ROI
9. Maidsafe (MAID)
Price Oct 25 2017: $0.14
Price Oct 22 2018: $0.20
ROI= 42.88%
Approximate GAIN = $428.8 on your $1k
Peak Return Potential
01/02/2018 $1.17 = 835.7% ROI
Low Return Potential
05/21/2017 $0.11= -9.48% ROI
10. NEM (XEM)
Price Oct 22 2018: $0.095
ROI= -52.5%
Approximate LOSS = $525 on your $1k
Peak Return Potential
01/07/2017 $1.77 = 785% ROI
Low Return Potential
10/11/2018 $0.089= -55.5% ROI
Total Value of Your Top 10 Altcoins Today: $194,730*
*Prices derived from Coin Market Cap from October 25th, 2017 -2018
Analysis
While 2017 may have been an exception, it shows the true nature of this extremely volatile asset class and sheds light on the Bitcoin vs Altcoins debate. During the 2017-2018 boom altcoins showed a much larger variance than Bitcoin (though they were both extremely volatile by normal asset standards). However, from looking at the data a point can be made for the higher risk/reward potential of altcoins.
One Important fact to no overlook is that Bitcoin never went below its beginning value in October while most ever other altcoin did.
At the end of the day every individual should have their own trading strategy to fit their needs. I also am a strong believer in diversification, so spreading out your investment among promising cryptocurrencies is likely the best bet in the long run. Bitcoin’s dominance has already showed that it's not completely stable, and with limited scaling and high fees, its reasonable to assume competition will win market share for various use cases.
Wrap up
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