Why bitcoin is the only cryptocurrency to be used as an investment asset

[EL MOHA]

Bitcoin main purpose according to Satoshi himself, is as an alternative payment to fiat currency. But over the years bitcoin has grown in such a way that many have seen it’s potential of been a great investment asset. This could be deduced from some of the advantages of his below;
1. Decentralization
2. Stores of value
3. Great Return on Investment
4. Fixed Number or Supply
5. Adoption rate.

Due to all these advantages some  people have not only taken bitcoin as an investment asset but have generalized it to other cryptocurrencies as well. Some have thoughts that investing in these alternative coins are actually diversification of one’s portfolio. But is this really portfolio diversification?

Diversification of portfolio can be termed the process by which investors, invest in different assets to mitigate a loss been encountered in a particular asset.

Alternative cryptocurrencies cannot be regarded as diversification of portfolio because;
1. Most of all the altcoins follow the same price trend as bitcoin, with just few going higher than it due to hype, which has made many to call them pump and dump coins.

2. Bitcoin is the only true decentralized cryptocurrency and as such eliminates the fear of centralization which is in many altcoins which could be use to manipulate its market.

3. Bitcoin supply limit is what makes it a store of value and also an hedge against inflation, giving it an edge ahead of other cryptocurrencies.

With all these and more, and most importantly the fact that bitcoin price change is actually been followed by other cryptocurrency which are not secure, makes them more risky to be used as an investment asset.

It will be better to look into other assets like stock, gold and real estate for an ideal portfolio diversification

Aside bitcoin, treat alternative cryptocurrencies as pump and dump coins that they are.


Note: I am not advising anyone on investment

[_act_]

Bitcoin is decentralized has been what I like about it as the adoption rate is very significant too. What I also like about it is the fixed supply and scarcity.

Note: I am not advising anyone on investment

This is clearly about bitcoin, not advertisment.

About return on investment, it might be a loss for a long time for people that invested at the wrong time. Example are people that invested at $50000. But bitcoin is still going above $50000 again. Even above $100000.

[Findingnemo]

As of today's price valuation, the market cap value of total crypto is 1.17 Trillion dollars but bitcoin only has 48% of the total share which is 560 billion so the remaining 50% is invested in the so-called altcoins. Debating whether we really need to have any cryptos beyond Bitcoin is pointless since we already have thousands of others which are alive at the moment so it's entirely the users' choice to decide where they want to put their money.

I only prefer Bitcoin because it's proven, and not likely to be changed by the creator but I don't feel the same with any other coin that is why I only prefer bitcoin for investment and even for most trading purposes I just go with stable coin pairs only for day trading purpose.

[Hyphen(-)]

Due to all these advantages some  people have not only taken bitcoin as an investment asset but have generalized it to other cryptocurrencies as well. Some have thoughts that investing in these alternative coins are actually diversification of one’s portfolio. But is this really portfolio diversification?

Most people that actually consider buying different altcoins as portfolio diversification are mostly doing it because of FOMO because halving is coming, while some are doing it because of their beliefs in altcoin.

It will be better to look into other assets like stock, gold and real estate for an ideal portfolio diversification

Aside bitcoin, treat alternative cryptocurrencies as pump and dump coins that they are.

Buying gold, and investing in real estate can be another form of investment outside cryptocurrencies which is good, but investing in different altcoin to me is not a wise decision since all of them follow the trend of Bitcoin price to grow.

Apart from Bitcoin, no any other coin is guaranteed, Do Your Own Research and make a decision if you find any altcoin worth of investment.

[Fiatless]

It will be better to look into other assets like stock, gold and real estate for an ideal portfolio diversification

Some crypto investors will argue that one can diversify their investors by buying some altcoins. Some will even give you a list of some altcoin that is worth investing in. Maybe they understand the sector more than me. But for me, investing in altcoin is very risky. I don't really have the proper risk management skill to handle the high rate of uncertainties that rules the altcoin sector. Apart from Bitcoin my best investment option will be real estate. So I will gladly diversify my investment by buying affordable lands and houses in my country than risk buying some altcoins.

As of today's price valuation, the market cap value of total crypto is 1.17 Trillion dollars but bitcoin only has 48% of the total share which is 560 billion so the remaining 50% is invested in the so-called altcoins. Debating whether we really need to have any cryptos beyond Bitcoin is pointless since we already have thousands of others which are alive at the moment so it's entirely the users' choice to decide where they want to put their motgat

The market cap of Bitcoin makes it very difficult for individuals or corporate bodies to manipulate. And bitcoin is gradually becoming a currency that recovers easily from attacks by certain unfriendly firms or individuals. In recent times FUD has had little or no effect on its price. I can not guarantee that some altcoin has enough market cap to withstand minimal attacks. Most of these altcoins collapse immediately after a key player dumps them.

[dzungmobile]

Alternative cryptocurrencies cannot be regarded as diversification of portfolio because;
1. Most of all the altcoins follow the same price trend as bitcoin, with just few going higher than it due to hype, which has made many to call them pump and dump coins.

Bitcoin goes up with hype too but a biggest difference between Bitcoin and altcoins is decentralization, from its network to developer and user communities. Altcoins are centralized so their core teams can abandon their projects which will become dead anytime.

2. Bitcoin is the only true decentralized cryptocurrency and as such eliminates the fear of centralization which is in many altcoins which could be use to manipulate its market.

Bitcoin and altcoins are all can be manipulated by whales. They are not different and generally the total marketcap of cryptocurrency market is very small and easy to manipulate.

3. Bitcoin supply limit is what makes it a store of value and also an hedge against inflation, giving it an edge ahead of other cryptocurrencies.

You're missing a point.

Only a limited total supply does not create any value. You need examples?

Please look at altcoins, more specifically Bitcoin forks.

• How many Bitcoin forks are there?
• You can create a new fork but I am sure, that new fork will have no value

[ImThour]

I think the only reason why Bitcoin is the most preferred Crypto to be used as an investment asset is the quantity of it being available in the market and the mathematics behind it.
Ethereum's Unique Selling Point is its functionality, smart contracts, etc. however Bitcoin is a solid investment because of its scarcity. There are only 21 Million of them to be ever created.
Also, the fact that it will take centuries to reach the 21 million digit is crazy. I can surely say that the 21,000,000th coin will never be mined.

[Lucius]

~snip~
It will be better to look into other assets like stock, gold and real estate for an ideal portfolio diversification

I agree that it would be better to go in that direction, but you also have to understand that it is much easier to invest in cryptocurrencies than in gold, real estate, or stocks. When I say "easier", I mean primarily those who invest money in altcoins, and it is mainly about the younger population who dreams of overnight success, many of whom are minors and may not even have a bank account.

What makes cryptocurrencies attractive is the fact that you only need a smartphone+internet and some app to invest, which is much easier than buying physical gold or shares for which you still need a broker who will do it for you. If something is simple, accessible to most people and with the possibility of a possible big profit, then you don't have to wonder why it attracts so many people.

As of today's price valuation, the market cap value of total crypto is 1.17 Trillion dollars but bitcoin only has 48% of the total share which is 560 billion so the remaining 50% is invested in the so-called altcoins.
~snip~

Market cap does not represent investments, but only the possible value of coins that are often manipulated to make them look more attractive. Most of the altcoins market is just one big mirage, but people often see exactly what they want to see, until they realize that there is actually nothing of value out there.

[Findingnemo]

As of today's price valuation, the market cap value of total crypto is 1.17 Trillion dollars but bitcoin only has 48% of the total share which is 560 billion so the remaining 50% is invested in the so-called altcoins.
~snip~

Market cap does not represent investments, but only the possible value of coins that are often manipulated to make them look more attractive. Most of the altcoins market is just one big mirage, but people often see exactly what they want to see, until they realize that there is actually nothing of value out there.

Marketcap valuation may not be entirely accurate but it does represent that people are ready to throw their money away apart from Bitcoin and its expected since we started to call crypto as investments over P2P payment mode. And you are right people are always looking for the next Bitcoin, next Ethereum, next Dogecoin so with less capital they can make millions which is somewhat similar to expect winning a lottery.

Some people will learn that it is stupid to expect such returns or they will keep doing it so my point is it's our choice to decide where we want to stand.

[cryptoaddictchie]

It will be better to look into other assets like stock, gold and real estate for an ideal portfolio diversification

Aside bitcoin, treat alternative cryptocurrencies as pump and dump coins that they are.

Thats a good advise but people have the right to choose if they want to invest on other products like altcoins. How can you say all alts are pump and dumps. Yes there are some but definitely not all and there are other alts that has progressing to the level of bitcoin and can be considered as blue chip as well.

[Yamane_Keto]

The term diversification of the investment portfolio is a term intended to invest in several categories of assets that move opposite to each other or independent of each other so that the losses are straight or not connected to each other. investments, but rather a division of risk.

If you invest in stocks, you will find an unclear correlation between some stocks, such as technology stocks, with stocks in the agricultural sectors, and opposite stocks, such as stocks of oil companies with renewable energies, but they all fall under the stock item, which means risk distribution, not diversification of portfolio.

A well-distributed portfolio contains assets such as gold, dollars, stocks, real estate, and cryptocurrencies.

In cryptocurrencies, you can invest in Bitcoin and try to reduce the risk by investing in altcoins, but historically, these altcoins have proven to be a bad investment in the long run.

[pakhitheboss]

About return on investment, it might be a loss for a long time for people that invested at the wrong time. Example are people that invested at $50000. But bitcoin is still going above $50000 again. Even above $100000.

Those who invested in Bitcoin when it reached its ATH of 21k got high returns in 2021 If they had not panicked and sold it for a loss before. At whatever price point you buy Bitcoin it will always give you a high return if you have diamond hands. If you cannot hold and tend to panic when the market goes down then you should not invest in Bitcoin. Weak hands in any kind of investment would always suffer losses. There are other shitcoins that can give you 2x, 5x, 10x, or even 100x on your investment but they do perish fast and you could lose money, whereas if you keep on believing Bitcoin it will surely give you better returns than gold or property in the long run.

[Woodie]

Why bitcoin is the only cryptocurrency to be used as an investment asset

Well it's actually not only bitcoin or other cryptocurrencies that has been used as an investment,  we have gold the oldest asset out there that a be treated as a store of value and an investment!

For some countries that have high inflation or hyper inflation, they have gone an extra mile to convert whatever local currency they have to get more stable currencies such as the United States dollar as a cushion to power performing economies that as negatively affected their fiat and to avoid this when to invest in the US dollar of which profits can be made while the local fiat weakens.

I think the only reason why Bitcoin is the most preferred Crypto to be used as an investment asset is the quantity of it being available in the market and the mathematics behind it.

Nice and simple explanation 👍,  the mathematics adds up and anybody looking for a reason to invest can be convinced by this..thanks to the limited supply 😀

[icalical]

You have a good point here, I do agree if you already invest in Bitcoin investing in most altcoins is not a diversification since most of them follow bitcoin price. But I think when most people talking about diversification in crypto is to diversify their altcoin choice if they choose to invest in altcoin, I mean like it's better not to put the fund 50% on Bitcoin and 50% on Ethereum, instead 50% Bitcoin, 10% ETH, 5% BNB, 5% ADA, 10% LTC, .etc. Because Bitcoin is the top of mind, a must buy if people want to invest in crypto

[348Judah]

Bitcoin main purpose according to Satoshi himself, is as an alternative payment to fiat currency. But over the years bitcoin has grown in such a way that many have seen it’s potential of been a great investment asset. This could be deduced from some of the advantages of his below;
1. Decentralization
2. Stores of value
3. Great Return on Investment
4. Fixed Number or Supply
5. Adoption rate.

With this among other points such as trust, transparency, freedom, security, privacy and profitability were other benefits that we got served with bitcoin adoption, we cannot mention them all here because bitcoin has brought in many opportunities that changes life entirely and the way people reason, approach and handles their financial economy all over the world, Satoshi has made this a finished work with bitcoin because it serves it's purpose and the people really wanted it that way.

[lovesmayfamilis]

For people just getting into crypto, the practice of investing will always be the best way to start with Bitcoin. In addition, investing in Bitcoin will save many from today's inflation; keeping your savings in it, as well as holding it properly for a long period, will undoubtedly bring more profit than altcoins that periodically turn into dust. It is better for beginners not to associate their investments with alternative coins at all unless they have some kind of extra capital; if they lose it, they will not have any drama.

[Poker Player]

For people just getting into crypto, the practice of investing will always be the best way to start with Bitcoin. In addition, investing in Bitcoin will save many from today's inflation; keeping your savings in it, as well as holding it properly for a long period, will undoubtedly bring more profit than altcoins that periodically turn into dust.

Well, that is, unless they hit the lottery. I'm sure next cycle there will be altcoins that will make X100, while Bitcoin won't even remotely give that return. The question is to get which one right, knowing also that there will be many more than 100 altcoins that will go to 0 or lose more than 99% of value.

Today I think it is more worthwhile to invest in Bitcoin for its intrinsic properties, which is something the OP points out, than for the security of a moderate return, not because it will give spectacular returns in the next cycles, no matter what some influencers want to sell us.

[Ndabagi01]

Alternative cryptocurrencies cannot be regarded as diversification of portfolio because;
1. Most of all the altcoins follow the same price trend as bitcoin, with just few going higher than it due to hype, which has made many to call them pump and dump coins.

Pump and dump coins have dominated the cryptocurrency market, causing many investors to lose their holdings owing to their reliance on them for long-term profit. But they had no idea that the majority of these coins would leave the market once their creators profited from people's investment in them.

2. Bitcoin is the only true decentralized cryptocurrency and as such eliminates the fear of centralization which is in many altcoins which could be use to manipulate its market.

Bitcoin is the only decentralised cryptocurrency and will remain so in the future. Other coins follow the same pattern, and their prices are controlled by a central course.  Such coins already reflect centralisation tendencies, therefore thus cannot be reliant on such activity.

3. Bitcoin supply limit is what makes it a store of value and also an hedge against inflation, giving it an edge ahead of other cryptocurrencies.

The limited total supply of bitcoin has distinguished it from other cryptocurrencies. We may not live to see when the last bitcoin is mined, but I can only imagine how other coins will react when there is no more bitcoin available for mining. Will the majority of them leave the market, or will they continue to exist and want to stand out, as bitcoin already does?

[Upgrade00]

Holding different types of altcoins does not count as diversification, that is simply gambling.

I think the only reason why Bitcoin is the most preferred Crypto to be used as an investment asset is the quantity of it being available in the market and the mathematics behind it.

That's definitely not the only reason. Scarcity supports value; so if an asset is valuable making it scarce can create more demand against supply. Scarcity alone can only bloat the price but cannot sustain it for a long period of time.

Also, the fact that it will take centuries to reach the 21 million digit is crazy. I can surely say that the 21,000,000th coin will never be mined.

It will take just over a hundred years for all bitcoins to be mined.
And the 21 millionth Bitcoin will be mined, it will only be a few days short.

[kawetsriyanto]

You have a good point here, I do agree if you already invest in Bitcoin investing in most altcoins is not a diversification since most of them follow bitcoin price.

Yep, most of them follow Bitcoin price but not every coin follows Bitcoin price. Meme coins and stable coins sometimes can increase their prices differently, we often saw they are increasing when Bitcoin price is decreasing.

But I think when most people talking about diversification in crypto is to diversify their altcoin choice if they choose to invest in altcoin,

What do you mean?
Sure, people have the option for diversification on altcoins. However, there are some people who invest in Bitcoin only because they don't want to take bigger risks in altcoins.

I mean like it's better not to put the fund 50% on Bitcoin and 50% on Ethereum, instead 50% Bitcoin, 10% ETH, 5% BNB, 5% ADA, 10% LTC, .etc. Because Bitcoin is the top of mind, a must buy if people want to invest in crypto

Mostly people prioritize to invest in Bitcoin, they probably put 50% of their money in Bitcoin at least. While for altcoins, it can be varied, it depends on how many altcoins they want to invest in. Every investor can be different about the percentage on dividing the money in to altcoins.