While the year 2024 was challenging for cryptocurrencies like for many other industries, the value of Bitcoin managed to reach a new record of over $38,000 and it is still holding it during January with only some minor changes. The explanation for such a rise might be in the fact that many investors find cryptocurrencies as a great way to protect their assets since Bitcoin, Ether, and many other types are decentralized which means that some big economic crisis will not have such a negative effect on them.
On the other side, according to many experts in the field of economy, there is a high chance that the world will face another recession that might even become worse than the last one in 2008. That will cause higher inflation and many other issues on the global market. However, that will affect the blockchain-based currencies to become even more popular and valuable.
Nevertheless, the question is, which tokens and coins besides Bitcoin can be a good investment, and is there a chance for a Bitcoin to affect the values of other cryptos in any way. As we can notice, more and more people are interested in this sort of investment. Some people are even claiming how Bitcoin has the potential to reach a value of over $100,000 in the next few years.
There are various types of trading with cryptocurrencies, and you can visit mintonblock.com to read more about the digital assets investment fund and the best Bitcoin 401k investment plan. Moreover, you should learn more about various factors that can affect its value. Nevertheless, you have to know that there are over 2,000 cryptocurrencies available on the market today, which means that investing in some of them might bring you even higher profit. However, Bitcoin is the most popular solution that might have a huge effect on the whole market, especially on altcoins. Here are some factors of how this digital currency might influence less-popular ones.
1. Increased Liquidity
Most online exchanges will accept only Bitcoin and several other options when it comes to conversion to fiat currencies. In that matter, you will have to convert your altcoins into some of these options if you want to cash them out. However, with the higher demand for trading with the most popular coins, the value might become higher for those with a lower market share since it is easier to trade. On the other side, there is also a chance for negative effects since fewer people will be interested in investing in altcoins.
With the increased price, the most popular option will make people more interested in investing, while many of them will avoid risking by choosing some less popular options. In that matter, chances for many altcoins to become cheaper are quite possible considering that investing in Bitcoin represents a stable choice with the potential to earn you a big profit. Also, more big corporations are starting to accept payment over e-wallets, but only for the most popular types. Nevertheless, the fact that blockchain is becoming more popular brings more potential investors, and if they decide to risk with some less-known options, altcoins could reach a higher price as well.
3. Lower Risk Levels
Since Bitcoin represents the first blockchain-based asset, you can create various analyses and predictions for altcoins by using the charts related to this currency. There were many ups and downs throughout the 10-year long history of Bitcoin, and the main reason why some people would not be interested in investing a lot of money in altcoins is the situation from 2017 when BTC fell from near $20,000 to under $4,000 during the same year. The rise in value can affect other options, but that is not mandatory because there are other factors besides the market share and popularity of these investments.
4. Higher Security
One of the main benefits of blockchain technology is the high level of security where there is no chance for someone to break into your e-wallet. There were some cases of theft, but they are related to security breaches on online exchange platforms. In that matter, those altcoins that are using the same blockchain might become more valuable as well.
BTC Blockchain System
As we already mentioned, the main feature of many altcoins is that they are using the same system or at least the same code as the BTC blockchain. That brings many advantages and might lead some of them to reach the same popularity as BTC in the future. Therefore, it is not a surprise that tokens and coins are following the rise of the most popular option. On the other side, even the fall of BTC might affect the rise as well. For example, there is a chance for many investors to decide to switch from one cryptocurrency to another in case of critical price changes, instead of converting it to fiat currencies.
The Bottom Line
As you can see, the most common situation for altcoins is that they will also become more valuable when BTC is on the rise. However, many other factors can influence their price on the market. Also, there is an expansion in the whole world where people starting to understand the real potential of blockchain technology and all of the benefits they could get from using an e-wallet as a standard way of payment. There are already many online shops, casinos, and many other services where you can pay by using this method. Also, according to the most recent trends, many countries are planning to find a way to implement blockchain currencies into existing monetary systems. That will cause the prices of many coins to rise.
The current situation where BTC is the major option is affecting all of the other types of cryptos, but there is also a chance for some other options to become more stable in the future, which will lead to the decreased influence of BTC. Investing in altcoins can be a great solution to gain profit, but only a proper analysis of the market can help you to select the right option.