- Altcoins are acquiring significant traction
- There is immense interest amongst the buyers who are stimulating an explosion in altcoin investments
- Indian investors are banking on altcoins to show growth similar to Bitcoin
Altcoins, or alternate crypto assets, are acquiring traction because investors credit them as cheaper alternatives to Bitcoins. The latter is on a ride of its own as it smashes fresh records every day. The majority of the capital resides in the five leading altcoins: Ethereum, Stellar (XLM), Ripple (XRP), Tron, and Bitcoin Cash.
These five top crypto assets recently witnessed a growth of 4-5x. Bitcoin surged by 2x in the previous month in terms of purchasing capacity. As per the statement of Nischal Shetty, CEO of WazirX, apart from Bitcoin, various other tokens are accomplishing tremendous growth for the past week. BNB also surged by over 100%, whereas Swipe (SXP) rose by 48%, and so did several others.
The hunt for the next Bitcoin
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There is a whole flutter of buyers who are not only investing into the crypto narrative but are stimulating an explosion in altcoin investments, says crypto exchanges. The head business officer at CoinSwitch Kuber, Sharan Nair, stated that the majority of Indian investors are keenly looking for the next Bitcoin. According to them, Bitcoin is already very costly. So they are now betting on altcoins hoping for a very similar growth for them.
Altcoins include all the cryptocurrencies except Bitcoin and similar substitutes. The prosperity of Bitcoin as the debutant peer-to-peer digital asset created the path for this trend. Various altcoins are trying to anchor on the discerned limitations of Bitcoin.
Cryptocurrency exchanges believe that the Indian market reflects the global one. Investors want to discover alternate coins as they are less expensive and represent a substantial growth potential.
Preferred traction towards altcoins
Despite Bitcoin exceeding $50,000 this month, the performance of the altcoins outdid the former. Cryptocurrency exchanges think that Indian investors who wished to achieve exposure in the crypto market ended up diversifying their investment with 60% in Bitcoin and the remaining 40% in an altcoin. However, at the end of 2020, most investors’ portfolios held about 70% in Bitcoins and 30% in altcoins.
Darshan Bathija stated that Bitcoin is likely to be the reserve for the crypto industry. He is the CEO of the crypto network Vauld. However, altcoins provide users with extremely different perspectives. For example, Ethereum, the leading altcoin in the framework of market cap, constructs a decentralized distributed computing platform. It facilitates a substitute for accessing a Google cloud. This implies that it provides complete auditability and everyone can access every line of the respective code. Here, the user pays for the exchange, and the asset is called Ethe.
Current stages of the altcoins
Litecoin represents a stable alternative to Bitcoin since its formation in 2011. The main reason behind crediting it as an alternative is that Litecoin utilizes a POW consensus mechanism popularly known as Scrypt. Scrypt is usually acclaimed as more efficient than Bitcoin’s algorithm.
Bitcoin Cash, established in 2017, represents a quicker and more scalable blockchain that holds the ability of managing more transactions than Bitcoin. In simpler terms, it implies that this crypto asset is capable of becoming the primary blockchain for handling online payments. On the chart, Bitcoin Cash is still under process to recover its pre-year levels. Thus, we can predict that BCH still represents a buying opportunity in the market.
The purpose behind the creation of Tron was to revolutionize the entertainment space and make content creation more independent. Its space functions as a content-sharing network in which customers who build and share content receive rewards like TRX. On the chart, the growth looks extremely positive.
Thus, Bitcoin and its initial alternatives such as Litecoin and BitcoinCash deleted the role of middlemen for executing transactions. However, they still needed intermediaries for contractual obligations.