Reasons to look at Altcoins in 2022

Alternative to bitcoins, Altcoins are gaining popularity like never before. Several investors are not only developing their profiles keeping in mind certain altcoins they would like to invest in but also are joining the crypto battlefield to be a part of the altcoin-booming trend. Early investors of cryptocurrency know how largely bitcoins dominated the market initially. The market cap of the other coins, even combined, did not come close to the value of BTC. Slowly, as newer altcoins emerged in the market, they started dominating and taking precedence over the bitcoin rule. They started chipping away at the market cap and space bitcoin had created for itself. The value of ETH to INR started rising slowly as the dominance of bitcoin reduced from 70% to 39% in the overall market share in a year.

Here are a few reasons why altcoins are making a sharp rise and increasing their foothold on the crypto market and why investing in them in 2022 would be a smart decision:

  1. Expanding uses – While bitcoins have limited use and the main purpose would be to buy and sell goods and services on the internet, altcoins go much beyond that. Altcoins are famous not only for their cryptos, coins, and tokens but also for the other varied uses that their technologies present to the market. The blockchain technology used by several altcoins provides the opportunity for several other applications like smart contracts, p2p financial platforms, NFTs, etc. The use of ripple and its blockchain technology also provides great help to businesses as transactions from XRP to INR have made it easy for cross-border payments to occur at a fast speed with low costs.
  2. Institutional investments – Investors and large-scale companies and businesses are now increasing their investment profile by targeting altcoins after recognizing the multi-faceted use that they can provide to the platforms and economy. Digital assets, too, are gaining traction and momentum among institutions. Big companies with a lot of money can take larger risks via their investments. By investing in altcoins, they might be making a calculated risk as they eventually end up increasing the value of the coins gaining more and more users.
  3. Cheaper – It is as simple as that. Altcoins have a much lower value as compared to bitcoin in the current scenario. This makes them much more desirable and accessible to lay people who may not want to invest a large amount, at least in the beginning. People are scouring for newer opportunities regarding altcoins as they are lower in price and seem to have more potential. A few altcoins like Shiba Inu or Dogecoin can be good entry points into the world of cryptocurrency for many individuals. They can wait for their portfolios to grow before they begin to expand towards trickier altcoins.
  4. Constant upgrades – We have not seen the bitcoin market or basic structure and function change since its inception. Altcoins, however, not only emerge with newer functions altogether but also keep innovating and transitioning into 2.0 versions of themselves. The best example here would be Ethereum. The developers identified the need to create Ethereum 2.0 that would be more sustainable to the environment and perform slightly different functions as opposed to ETH. These new creations offer long-term and significant solutions to the limitations of existing cryptocurrencies in the market. Naturally, this will affect the demands that people have for bitcoins leaving altcoins as the more popular choice.
  5. Better risk management – With higher returns in a shorter period, altcoins have gained more favor in recent years. To be able to effectively manage their risks, investors can take the help of altcoins. Since they are much lower in terms of their price, investors can use a get-in and get-out technique as soon as they see certain profits with their investments. Contrarily, some altcoins would also be good enough for long-term investing. If you decide to regularly devote a certain value to Ethereum periodically for a long time, you are bound to see great returns. Some altcoins are affected by market crashes and other environmental stimulants. Tweets by Elon Musk were a great factor to influence and dramatically up the prices of Dogecoin.

Do not underestimate the value that altcoins might hold in the ecosystem of cryptocurrency. These are important and innovative and can pose much greater advantages than bitcoins in the future. Keep a diverse portfolio and invest in certain promising altcoins in the beginning.