Why is bitcoin not the most profitable cryptocurrency?News
Bitcoin is the first cryptocurrency followed by the entire crypto market. It has a high market capitalization and a large trading volume, which makes it less volatile than other digital assets. Because of this, investors want more profits and start looking for new young projects. In this article, we will examine bitcoin’s place in the crypto market, why it is not so easy to manipulate, and how it is inferior to new cryptocurrencies in terms of profitability.
What Bitcoin is in the crypto market
Bitcoin is the leader in the cryptocurrency market and a huge number of investors support its value level. The coin has a high yield and a market capitalization of around $1 trillion. But even with a large capitalization, a yield of 10-15% does not seem that high by the standards of the cryptocurrency market. If it so happens that a large investor with billions at his disposal wants to buy bitcoin for an impressive amount, the coin will not go down because there are those who will support it. Bitcoin becomes less volatile and does not rise much in value relative to altcoins because of the high volume of trading.
For long-term investing, this coin will suit many traders, as the crypto industry is gaining momentum every year and cryptocurrencies themselves are rising in price. Bitcoin acts as a flagship cryptocurrency, which is less susceptible to market turmoil. A simple example: when the market begins to correct, bitcoin becomes cheaper than all altcoins, but it also gains in price at a much weaker rate.
Why is it so hard to manipulate bitcoin?
Today this question is quite relevant, because the main cryptocurrency has high liquidity and huge demand. As we know, there are spot trading and derivatives in the market. In the first case, a trader buys or sells a coin or token. Derivatives trading is more flexible and controllable as it gets its value from the primary underlying asset.
If a large number of traders sell BTC futures at the same time, there is a chance that the market will sag, but if they buy, it will probably go up. The high volume of transactions indicates the overall level of interest in the main cryptocurrency, which can affect its value. Derivatives boost prices, reduce volatility and attract even more investors.
Since bitcoin is traded on spot and derivative trades and has high demand and a huge number of participants, it is difficult to manipulate. If we talk about any new project, the trading volume and demand are low, so it is easy to manipulate because there is only spot trading. To put it simply, bitcoin has a market capitalization of about $1 trillion and derivatives are added to it, which makes the total trading volume high and difficult to influence. In new coins the spot demand can be $100,000 and a big investor can influence the price because the trading volume and number of participants are small and derivatives trading is not used. That’s why it is easier for an investor to invest into new projects and get profit than to try to influence the price of the main coin.
Why is bitcoin inferior to new coins in terms of profitability?
There are more and more new coins popping up in the crypto market that can bring an investor super returns. Many investors prefer to invest in them instead of bitcoin, because there are few or no participants in new projects and the price is quite low. In other words, it is more profitable for an investor to buy a newly born coin, thereby increasing its value several times and then making a profit.
Today there are many new coins that have shown good growth in a short period of time. Since bitcoin has a market capitalization of $1 trillion and is difficult to influence, many large investors are trying to invest in young projects that have a much smaller capitalization. For example, a new project has a capitalization of $10 million and if they want to invest even $1 million in it, there will be a strong increase in value.
Compared to traditional markets, bitcoin gives superprofits, but a newly born coin can show even more growth. Also, we should not forget that new projects have their own risks. After a new project is launched, people start talking about it everywhere and investors start investing, thus raising the price of the coin sharply. But this is a short period of growth, and after that everyone usually forgets about the coin, or new similar projects appear, and all attention is fixed on them. You may also read Payment Options in Online Bitcoin Casinos.
In addition to nascent projects, there are coins on the crypto market that have been around for a long time and can show returns greater than bitcoin. As an example, Ethereum rose 612% from $715 to $4380 at the beginning of 2021, while bitcoin rose only 226% from $28700 to $65,000 during the same time.
Bitcoin’s returns are very high, but new coins could show even higher returns due to increased interest in them and a small number of participants.
To summarize, bitcoin is not considered to be the most profitable coin on the crypto market in 2021. Many investors prefer new projects and invest their money in them because they have low trading volume and you can get profit much faster. But you should not forget about the risks when investing in new cryptocurrencies, because they tend to rise in price quickly and also fall quickly.
You can invest in these and not only tokenized assets through the regulated crypto exchange of tokenized assets Currency.com. The crypto platform offers over 2,000 tokenized assets: tokenized currencies, tokenized stocks, tokenized bonds, tokenized