Following the recent – and current – Bitcoin price surge, altcoins continue to lose ground. While some projects are noting gains in BTC value, the vast majority have gone in the red over the past week. Another sign of why investing in altcoins to increase BTC holdings is not the best idea.
Altcoins Won’t Increase BTC Holdings
It is very difficult to increase one’s Bitcoin holdings when trading cryptocurrencies. More specifically, the only real option is to trade against fiat currencies and hope for the best. Unfortunately for traders, fiat currency-denominated markets for Bticoin are among the most volatile pairs. Noting a profit is somewhat challenging, even for day traders.
Another option to explore is to trade Bitcoin against stablecoins like USDT or USDC. A valid approach, as these currencies represent fiat currencies in a digital format. Moreover, stablecoins are commonly traded against Bitcoin on most exchanges. It is possible to ride the price waves and attempt to increase BTC holdings that way.
The one approach to avoid altogether is investing in altcoins to increase BTC holdings. When Bitcoin’s price goes up, the altcoin-to-BTC ratio shifts bearish more often than not. This is evident in the past week. Some currencies lost more than 17% in BTC value in the past week. It is a logical outcome, as Bitcoin is the top crypto asset on the market.
Judging by some altcoins on the chart above, alternative assets clearly aren’t good to increase BTC holdings. If one owns XEM or Nano, dealing with losses of 23.55% and more in a week is anything but fun. Holders of OCEAn and RSR, on the other hand, have noted increases of 19.5% and 30.4% respectively. There are only 8 altcoins with an increase in BC value over the past week.
What Purpose do Altcoins Serve?
Just because alternative crypto assets aren’t suitable to increase BTC holdings, doesn’t make them useless altogether. For traders, altcoins can be a good way to increase Ethereum or fiat currency holdings. Those profits can then be converted into more BTC, netting an effective increase in overall holdings.
Other than that, most of the alternative assets will not serve any real purpose. They derive value from speculation. Some of them have genuine use cases. Others, however, have powerful technology that doesn’t necessarily require the asset to succeed. Conducting research prior to making any financial commitments is always the best option.
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