Investing in the cryptocurrency market is a mixed bag, Buying Bitcoin, for the most part, is seen as the safest option, but with a plethora low cap cryptocurrencies almost beckoning investors to buy, with their high-risk high reward incentives, newcomers can all too often get lost in this highly saturated market. However, Ex CTO, Balaji Srinivasan, has a simple piece of advice for these newbies: “just buy Bitcoin.”
The cryptocurrency markets have become extremely diluted since the inception of Bitcoin, with spin-offs looking to recreate the fanfare around the #1 cryptocurrency. Some, of course, have their merit, others not so much.
For newcomers to space, this provides a fair bit of confusion, with one of the main questions often posed by potential investors being: “what’s the next Bitcoin.”
In a tweet earlier today, Srinivasan highlighted why he believes that investing in bitcoin is a better bet than trying to “beat the market” by buying altcoins:
Buying BTC in crypto is a little like buying Vanguard in traditional equities. It’s empirically possible to get higher returns for a while by pursuing another strategy. Many people try it. And there are folks who truly beat the market. But most people should just buy Bitcoin.— Balaji S. Srinivasan (@balajis) June 22, 2019
Srinivasan provided a caveat in the way of Ethereum (ETH), stating that ETH was both a “phenomenal investment and a major technological breakthrough.”
He also noted that there are other altcoins out there that are “promising,” and that Innovation doesn’t end with Bitcoin or ETH:
If you’re in crypto, can you rattle off the top five VR headsets or personal drones from memory? If not, this gives you a reasonable mental model of a smart-but-ignorant outsider. You might be able to name Oculus or DJI. They would be able to name Bitcoin. First step, buy BTC.— Balaji S. Srinivasan (@balajis) June 22, 2019
People, for the most part, seemed to agree:
I like this analogy.— Dr V (@buildthefutures) June 22, 2019
One suggested that the best strategy lay in dollar cost averaging and holding for the future:
Buying BTC, dollar-cost averaging, forgetting about it for several years. This is the soundest strategy for most people. #stackingsats— Alex Moskovski (@mskvsk) June 22, 2019
Interestingly Chepicap recently undertook its own study on dollar cost averaging, setting out a scenario in which an investor bought $100 worth of bitcoin every week since bitcoins all-time high back in December 2017. Despite the major highs and the bear market which followed the results were fairly successful, with the study concluding with a 48% return on investment.
What do you think? Is Bitcoin the best bet, or would you rather take a risk chasing gains from altcoins? let us know in the comments!
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