By now, the word is out – cryptocurrencies are collectively one of humanity’s greatest investment opportunities. As of this moment, only the much-discussed tulip mania has perhaps risen higher than bitcoin and other incredibly surging altcoins. Eventually, however, the blockchain markets will occupy the uncontested number-one slot.
How am I so confident in cryptocurrencies, and particularly, the altcoins? The blockchain represents the final innovation in western society: bridging its power (ie. wealth created via fiat) to the digital realm. Currently, only the mechanization of our economy is digitalized. The actual decision-making process, such as strategy meetings at the Federal Reserve, occur in a traditional, centralized platform.
The beauty of bitcoin and the blockchain is that it transfers the economic impetus from an elitist organization to a decentralized consensus. Of course, in practice, the follow-through has been questionable; hence, we have compromises such as bitcoin cash or SegWit2x. Nevertheless, the decentralization principle is very much alive in bitcoin.
Moving forward, though, investors should consider gaining some exposure to whatever altcoins they can afford. In this unprecedented bull market, I’m beginning to think that picking and choosing doesn’t matter. Case in point are cryptocurrencies such as NEM or Stellar Lumens – these are incredibly diluted digital tokens, yet they seem to be following in Ripple’s footsteps.
In other words, in a crazy bull market like this, the old rules – supply and demand, anyone? – don’t apply. Here are three other reasons why randomly picking altcoins might be as good a strategy as any.
Bitcoin is Too Expensive
This is any easy one. With bitcoin prices blowing past $10,000 in November, acquiring one unit of the king of cryptocurrencies is out of reach for many investors. Even with its recent severe correction, one bitcoin is still a lofty $15,000. As BTC runs higher into the stratosphere, altcoins look all the more compelling.
Fear of Missing Out
Don’t overlook the powerful human emotion of FOMO, or the fear of missing out. A year ago, most people had no idea what cryptocurrencies were, let alone the underlining blockchain technology. Today, even Mad Money’s Jim Cramer is discussing it (not in a good way, of course!). People recognize the opportunity they missed with bitcoin; they’re determined not to repeat the same mistake with cheaper altcoins.
Legitimacy
I think one of the biggest impediments to people jumping onboard cryptocurrencies was legitimacy, or the lack thereof. However, with so many altcoins joining bitcoin into the stratosphere, the amount of options provides comfort and confidence to newcomers. They want to know that this blockchain technology is for real. What better confirmation do you need than a massively growing market, with multiple whales putting in their money?