‘Bitcoin only’ buy-and-hold investment strategy outperforms altcoins over the long term — Analysis shows
Altcoins offer diverse, innovative features, promising technological advancements, and potentially lucrative investment opportunities.
Many-a-time specific altcoins post handsome gains that surpass Bitcoin (BTC), popularly known as altcoin season. However, K33 Research analysis shows over the long-term, ‘Bitcoin only’ has been a better investment strategy than an altcoin portfolio.
Bitcoin has had three consecutive bull and bear market cycles, starting in 2013 with the latest one coming in 2021. In each cycle, Bitcoin’s price rose parabolically in a very short span, usually a few months, after surpassing the peak of its previous cycle.
In 2013, BTC peaked around $1,175 and after that followed a downtrend for two years. At the time, the altcoin market was in its nascent stage. The fiat onramps to Bitcoin were limited and exchanges to convert them to altcoins were rare.
However, by the end of 2015, a number of altcoins, including the invention of Ethereum had occurred. A few exchanges had also propped up that supported conversion of Bitcoin to other cryptocurrencies, paving the way for an altcoin market.
It was not until April 2017 when Bitcoin’s price broke above the 2013 top, that a bullish run in altcoins took place. During the second half of 2017, the ICO boom on Ethereum and retail investment hype around Ripple’s XRP led the altcoin season as many tokens outperformed Bitcoin until January 2018.
Nevertheless, in the aftermath of the bull market, altcoins suffered relatively larger losses than Bitcoin. It suggested that altcoins surged primarily as users bought them during Bitcoin bull markets with the hope of capturing higher returns.
The chart for Bitcoin and altcoin market capitalization shows that during the bear market
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