Here is our first article in the series “Crypto isn’t all about Bitcoin”. Now, is Bitcoin the first thing that comes to your mind when you hear cryptocurrency? If your answer is yes, then this article is for you, but before we go further I would like to thank our readers for their constant feedback and support.
Most importantly, I want to apologize for the lack of proper editing and poor grammar in our past articles. We have gotten all our Grammarly tools on deck, we promise to do better this year. Let’s get back to our topic for today.
Bitcoin holds the record as the first mover and over the years Bitcoin has enjoyed that first-mover advantage. But wait a minute, crypto isn’t all about Bitcoin: Have you heard of Altcoins?
What are Altcoins?
Altcoins or Alternative coins simply refer to any cryptocurrency other than Bitcoin. So if a cryptocurrency is not Bitcoin, it is an alternative coin or altcoin.
Examples of Altcoins
From our definition of altcoins you should already be able to know examples of alternative coins, but do you? If you don’t let’s help you with that through a few steps.
Visit coingecko.com
Take a look at the cryptocurrencies listed there apart from Bitcoin those are all examples of alternative coins.
Market capitalization
The total market capitalization of all cryptocurrencies, according to Coingecko as at time of writing, is $2.08 Trillion with Bitcoin enjoying a 40.2% share of the total market cap, which is equivalent to $835,905,748,847.
https://www.coingecko.com/en/global_charts
The number one Alternative coin Ether has an 18% share of the total cryptocurrency market capitalization, which is equivalent to $373,494,119,946.
The total market capitalization of all alternative coins as of the time of writing is $1,244,094,252,000.
Opportunities in Alternative coins
While alternative coins do not seem to enjoy a fair market share on paper, there are two opportunities in alternative coins we will be taking a look at:
1. Better returns on investment:
Investing in Bitcoin will not give you a better return compared to investing in an altcoin. All alternative coins have lower market capitalization and this means altcoins have more room to grow.
For instance, Ether has a market cap of $373,494,119,946, which is about 2.3 times lower than that of Bitcoin. What this means is for Ether to get to the Bitcoin market cap, it has to grow 2.3 times.
Now let’s take a look at another altcoin called CIFI, which currently has a market capitalization of $5,728,752. For CIFI to get 5% of Ether’s market cap, it needs to grow more than 300 times. From an investor’s perspective, that would give massive returns even if I were to invest $100 in CIFI compared to investing that same amount in Bitcoin or Ether, which may end up just giving me a 50% – 150% return.
2. First-mover advantage:
solving a unique problem offers that first-mover advantage to any cryptocurrency. Bitcoin enjoys this as the first crypto, while Ether enjoys it as the first alternative coin. If you look at a majority of crypto millionaires today they all are part of a crypto project in the first mover category.
In the crypto industry being a first mover is dynamic and not limited, all a crypto project needs to do is find a unique problem to provide a solution to.
For instance, Uniswap found a unique problem in the area of anonymity, decentralization, and liquidity when trading cryptocurrencies by creating a decentralized exchange where anyone can add a token by providing liquidity for the token to be traded anywhere in the world. It’s cool, right?
Early investors like me that found uniswap quite early got the UNI token airdrop. Investing in altcoins or using their platform services may provide an investor a unique opportunity to enjoy the first-mover advantage like investing in Bitcoin or Ether in its early days.