There are thousands of cryptocurrencies in circulation today. And while they all appear alluring and parade the possibility of creating life-changing wealth, the reality is that an investment in Bitcoin (CRYPTO: BTC) remains the most simple and straightforward strategy to gain exposure to the burgeoning asset class.
This pick won’t win any points for originality, but the data and its near-spotless track record speaks for itself. For investors with some extra change in their pocket, here’s why Bitcoin is the most deserving of your $1,000.
Bitcoin sets the tone for crypto
Bitcoin’s market capitalization accounts for more than half of all the value in the crypto asset class. As a result of this inordinate value, the majority of cryptocurrencies trade in a correlated pattern to Bitcoin. In other words, as Bitcoin goes, so does the rest of the market.
Not only are other cryptocurrencies highly correlated to Bitcoin, but they also typically fall short of Bitcoin in terms of performance. In a recent investigation conducted by crypto analyst Benjamin Cowen, he found that out of the top 200 cryptocurrencies, only 39 outperformed Bitcoin over the last year. Rest assured that this number would be even fewer if the analysis took data into account over a longer time frame.
This is a heat map of #ALT / #BTC pairs over the last 1 year.
Out of the top 200 coins, only 39 have outperformed BTC.
Congrats if you picked one that outperformed, but you can see that most have bled back to the king. pic.twitter.com/KAR0xxKJyQ
— Benjamin Cowen (@intocryptoverse) March 7, 2024
The harsh reality is that when investors venture into altcoins, they expose their portfolios to significantly more risk that rarely produces better returns than just sticking with Bitcoin. Perhaps the adage “If it ain’t broke, don’t fix it” sums it up best. Bitcoin isn’t broken and remains the most effective, reliable, and performant asset in crypto.
The undisputed leader in decentralization and security
Part of the elegance of Bitcoin lies in its unparalleled levels of decentralization and security. In many ways, it’s the epitome of what a cryptocurrency should be.
Bitcoin has no single group or entity overseeing its function. In stark contrast to other cryptocurrencies that have teams of developers and founders, Bitcoin is able to run completely free of oversight.
This should also provide reassurance for Bitcoin investors, since there is little to no counterparty risk that comes with owning it. While it’s often swept under the rug, investing in other cryptocurrencies is essentially an endorsement in the developers and founders that operate its blockchain, repair bugs, and in some instances, even adjust monetary policy. There is none of that with Bitcoin. It is truly a decentralized network with no entity at the helm.
Further solidifying its role as the bona fide cryptocurrency is its unmatched track record of security and performance. Bitcoin’s blockchain has never gone offline nor been compromised, a feat few blockchains can claim. When considering that nearly 1 billion transactions have occurred on Bitcoin’s network over the last 15 years, this accomplishment becomes all the more impressive.
Leading the crypto revolution
Last but not least, we must discuss Bitcoin’s position at the forefront of a burgeoning financial revolution that is only in its initial phases. Surprisingly, only a meager 15% of the global population currently own cryptocurrencies.
As blockchain technology and cryptocurrencies establish their superiority over traditional fiat currencies, it isn’t difficult to see how the value of cryptocurrencies is poised to soar with escalating adoption rates. This upward trajectory is not only promising for the entire asset class, but particularly advantageous for Bitcoin.
As the flagship and most valuable cryptocurrency, Bitcoin enjoys unparalleled accessibility, making it the natural entry point for newcomers venturing into the realm of digital assets. But not only is it the natural entry point for the average investor like you and me, it is finding a new home on Wall Street and traditional finance. Take the recent approval of Bitcoin ETFs as evidence.
Add it all up, and it is almost certain that Bitcoin’s limited supply of 21 million coins will face mounting pressure in the coming years and decades. If this happens, its price will have nowhere to go but up in an attempt to keep pace with increased demand.
Should you invest $1,000 in Bitcoin right now?
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RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
The Ultimate Cryptocurrency to Buy With $1,000 Today was originally published by The Motley Fool
This article was originally published by a finance.yahoo.com . Read the Original article here. .