Bitcoin, mainstream coins, and altcoins, how should you choose?

The most difficult part of buying coins is which coin to choose?

I entered the cryptocurrency circle in early 2017. At that time, there were only three currencies on Huobi: Bitcoin, Litecoin, and Ethereum. I asked my roommate which one I should buy. My roommate said that Bitcoin was already 6,000 yuan, which was too expensive. It would be better to buy Litecoin and Ethereum. At that time, I knew nothing about blockchain. I only knew that some people were speculating on it. If they were speculating, they would of course speculate on the cheapest currency, so I bought Litecoin at a price of 24 yuan.

Although I finally cleared my position before 94, I still made a lot of money. At that time, I made money by chance, because there were not many tokens on the market, and it was in the bull market, so I could make money by buying randomly. Today's market environment is different. According to CoinMarketCap data, there are currently 2,218 tokens, and at least 3,000 tokens, including those that are not included. The market currently divides these thousands of tokens into Bitcoin, mainstream coins, and altcoins. These three types of coins represent different investment ideas. How should you choose? Before that, let's first understand the specific definitions of these three types of coins.

Definition of Bitcoin, Mainstream Coins, and Altcoins

There is no need to say much about Bitcoin. It is the king of all currencies and the foundation of the entire blockchain. In a nutshell, the difference between Bitcoin and other currencies is like the difference between the Internet and a local area network. No one can reinvent the Internet. There is no possibility of it being replaced. It is the eternal king.

The concept of mainstream coins is relatively vague. In 2013, there were only Bitcoin and altcoins. For example, Litecoin, the current mainstream coin, was the king of altcoins in 2013. Later, with the development of the entire digital currency, ETH, XPR and other currencies gradually lost the title of altcoins due to technological breakthroughs and price increases. The main criteria for judging mainstream coins are market value and time. In layman's terms, they are the coins that have dominated the list for a long time. Specifically, they refer to ETH, XRP, BCH, and LTC. Of course, there is no absolute standard. You can also classify the top 10 coins by market value as mainstream coins.

It is easy to categorize altcoins. All coins other than Bitcoin and mainstream coins are called altcoins. Altcoins are not fake coins, but cryptocurrencies that use certain blockchain technologies. Foreign countries like to call them competitive coins, which is actually more appropriate.

How to play Bitcoin

Most people think Bitcoin is too expensive, especially beginners. The logic is that Bitcoin is too expensive and won’t rise much, so it’s better to play with lower-priced altcoins. The logic is not wrong, but there is a misunderstanding. In the cryptocurrency circle, the issuance volume of different currencies varies greatly, so the price has no reference value and depends on the market value. It should be said that coins with large market caps will not rise much, while coins with small market caps have great explosive power.

Coins other than Bitcoin are indeed stronger than BTC in terms of short-term explosive power, and the odds of altcoins are higher. There is nothing wrong with this logic. But you must always know that high returns and high risks are twins. It is foolish to only talk about returns without talking about risks. Amateur investors account for the majority of the cryptocurrency circle. To be honest, most people are not suitable for investment at all. They blindly play with altcoins, pursue short-term surges, and want to bet on the next Ethereum. The outcome is predictable.

For the vast majority of investors, especially novices, Bitcoin is the best choice because Bitcoin has the greatest consensus and investing in Bitcoin is investing in the entire blockchain. In the long run, few currencies can outperform Bitcoin in terms of yield. Let’s put it this way, if you hoard Bitcoin honestly for 5-10 years, you can definitely outperform 90% of people.

Mainstream currency gameplay

Mainstream coins are similar to "blue chip stocks" in the stock market, with small short-term fluctuations and a rare limit. It is almost impossible for mainstream coins in the cryptocurrency circle to double in one day, but compared with altcoins, they have lower risks and higher potential gains than Bitcoin.

These "millennium-old coins" have capital support, a large community, and sufficient supporting scenarios, so they are very likely to survive to the next round. If you don't have a lot of money, it may be better to focus on some mainstream projects.

How to play altcoins

First of all, I want to state a point of view. I am not against playing with altcoins. The criterion for buying altcoins is just two words: odds. Whether a coin is a good coin is not that important, even if it is a pyramid scheme coin. If your goal is to earn more Bitcoins, then whether this altcoin can give you enough odds is far more important than whether the coin itself is a good coin.

Don't look at any technical analysis when playing Shanzhai. The market is so small that you can affect the K-line by charging 1 million. Playing Shanzhai is simply "gambling". Either you leave when the prize is drawn, or you leave when the prize is not drawn.

But you should pay attention to a few points: don't keep adding positions, don't have any feelings for altcoins, and especially don't go all in on a single altcoin.

Summarize

There is no difference between playing Bitcoin, mainstream coins, and altcoins. Value investing is not for everyone. The most important thing is to find the one that suits you. I played altcoins for a while in the early days, but was killed. Then I went to study the underlying logic of blockchain and investment, and started to invest heavily in Bitcoin, with a position of 80%. As my ability to distinguish between good and bad projects and market investment analysis improved, and my capital was not large, I needed a higher odds. In the middle and late stages, my Bitcoin position decreased, and I invested heavily in the top 20 currencies and bet on a small number of altcoins ranked lower.

In my opinion, for young people with learning ability and small capital, playing Bitcoin may not be the best choice, because young people need higher odds. For middle-aged people with large capital and a certain degree of security, it is of course best to hoard Bitcoin.

From different stages, novices must start with Bitcoin, then learn about blockchain and investment knowledge, combine practical operations to continuously improve their ability to distinguish and market insight, and then consider whether to play with mainstream coins and altcoins with higher odds based on their own situation.

Investment strategies vary from person to person, and the best investment method is the one that suits you.