While some older forms of cryptocurrency have existed since the 1980s, most people learned about cryptocurrency through the lens of Bitcoin’s monumental rise. Bitcoin was founded in 2008 under mysterious circumstances and has taken us on a roller coaster ride of epic proportions, creating many “new realms” in the process.

Imagine buying 10 bitcoin in October 2013 when a single coin cost around $ 164. As of this writing, one bitcoin is worth $ 33,863, which means your original investment is now worth $ 338,630. Of course, you should have battled the urge not to sell your investment when Bitcoin first hit $ 20,000 in 2018, and then you should have battled the urge again when it fell below $ 4,000 in the winter of 2019.

While no one knows where Bitcoin is going from here, some experts say Bitcoin could easily top $ 300,000 or more in value in the years to come. On the other hand, many experts say that it is doomed. In fact, famous investor Kevin O’Leary recently said on a YouTube video that he wouldn’t invest in Bitcoin because it’s a “huge no-nonsense burger”.

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What about other cryptocurrencies?

Whether or not you should invest in Bitcoin is up to you to decide. However, many cryptocurrency insiders say it is important to learn about other popular types of cryptocurrency as well.

According to Steve Azoury, financial advisor and owner of Azoury Financial in Troy, Michigan, there are several benefits to doing so. For starters, he says that new and upcoming cryptocurrency services must all compete for your business. Ultimately, this will benefit consumers.

“Competition helps the consumer and forces businesses to operate at lower costs,” says Azoury.

Ascent Personal Finance’s financial advisor Zechariah Schaefer is not only forcing cryptocurrency providers to offer better service and terms, but says you can use alternative cryptocurrencies to diversify your portfolio even further.

The impact of blockchain technology, the technology that powers Bitcoin, extends well beyond Bitcoin and other digital currencies. In addition, the cryptocurrency is revolutionary and the most basic implementation of blockchain.

“By investing in other cryptos, an investor can expose himself to projects that aim to implement increased use cases of the blockchain and disrupt industries that are so ripe for innovation,” says Schäfer.

Anthony Denier, CEO of the Webull trading platform, says another great benefit of buying other cryptocurrencies is that they are “much cheaper”.

Denier uses the example of Ethereum, which is currently trading at around $ 1,400. Since it’s less well known right now, this creates the potential for a bigger uptrend, he says.

The transaction costs for alternative cryptocurrencies can also be lower, which is not insignificant if you are an active trader. Denier also says that other digital currencies that came out after Bitcoin may have additional features that could lead the industry to prefer them over Bitcoin.

Alternative cryptocurrencies to consider

María Paula Fernandez, advisor to the board of directors of the Golem network, says Bitcoin and Ethereum are always great investment opportunities if you want to diversify your portfolio with cryptocurrency. However, there are many other platforms that need to be considered.

Fernandez points to Polkadot and its DOT token, a new Internet of blockchains, or Chainlink’s LINK token, popular throughout the industry, as cryptocurrencies to look out for.

Edmund McCormack, founder of DChained, also says the currencies in the DeFi ecosystem from Synthetix to Chainlink are getting more exciting.

According to McCormack, investors looking for higher returns must “identify projects that meet real-world use cases and provide a solution to existing problems.”

In this area, OCEAN is attracting interest from investors who are pushing for it to become available in the US on Coinbase and Gemini.

Other popular alternatives to Bitcoin are Litecoin, Cardano, and Monero.

What to look out for

Before you put a percentage of your portfolio in an emerging cryptocurrency, you should understand the risks.

Denier says that while Bitcoin is a “very risky investment”, smaller coins are much riskier because they have a shorter track record.

Investors should research the cautionary story of Ripple (XRP), which was the third largest crypto as of last month, he says. In December, the US Securities and Exchange Commission declared that XRP is an unregistered securities offering. This resulted in the exchanges ceasing trading or completely delisting XRP.

Denier points out that this has created a liquidity crisis for investors trying to sell, causing the price of the coin to drop below a dollar.

Schaefer also points out that many of these smaller cryptocurrency projects are trying to solve problems that either don’t exist or cannot be solved with blockchain.

A significant number of these projects have substantial funding, excellent marketing, extremely intelligent teams and well-known advisory boards, he says. However, due to the abundance of cryptocurrencies and blockchain, they are driving forward plans that make virtually no sense.

Shidan Gouran, founder of Jazinga, recently agreed with this premise, stating that there are “many unsubstantiated projects that serve no other purpose than harnessing the short-term hype”.

There are currently more than 8,000 cryptocurrencies in existence, according to Gouran, and most of them are “practically worthless”.

For this reason, you should never invest in a cryptocurrency just because it sounds good.

“You really need to do your research to understand what a cryptocurrency is actually doing and not be sidetracked by speculative ideas about its value,” says Gouran.

Bottom line: if a newer cryptocurrency is mostly made up of smoke and mirrors, then it probably is.