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Article Overview: This article provides a comparison of the performance of Bitcoin vs the top 10 altcoins a year ago. Which fared better?
Choosing which coin would be the most profitable in the short or long term can be extremely hard. The main question is, should you use your Bitcoin to buy other altcoins in the hopes of earning a greater return on your capital?
Or should you just hold Bitcoin since it will surpass every altcoin in the future? (Read also: Coins, Tokens & Altcoins: What’s the Difference?)
In order to answer that question, we’ve come up with a comparative analysis of the returns that you would get if you invested purely in Bitcoin and alternative coins, so as to paint a clearer picture of the profit potential going forward.
Let’s kick it off with a hypothetical situation:
Imagine if you had $10,000 in capital year ago and invested $1,000 in each of the top 10 altcoins. Alternatively, imagine if you had invested all of that 10k into Bitcoin. Here are the 2 scenarios:
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Option 1: Investing in Bitcoin
Over 860% returns, or 8.6x your initial capital. Now that's fantastic!
Total Value of Your Bitcoins Today: $96,000 (Profits + Initial Capital)
Option 2: Investing $1,000 Each in the Top 10 Alt Coins
As follows are the top 10 altcoins based on market capitalization (size) in October 2016. Prices are approximated to the nearest dollar, while the total value includes your initial capital.
1. Ethereum (ETH)
• Initial Price: $10
• Current Price: $300
• Profit/Returns: 2,900% or 29x your initial capital
Total Value of Your Ethereum Today: $30,000
2. Ripple (XRP)
• Initial Price: $0.0077
• Current Price: $0.20
• Profit/Returns: 2,400% or 24x your initial capital
Total Value of Your Ripple Today: $25,000
3. Litecoin (LTC)
• Initial Price: $4
• Current Price: $55
• Profit/Returns: 1,300% or 13x your initial capital
Total Value of Your Litecoin Today: $14,000
4. Ethereum Classic (ETC)
• Initial Price: $1
• Current Price: $10.50
• Profit/Returns: 950% or 9.5x your initial capital
Total Value of Your Ethereum Classic Today: $10,500
5. Monero (XMR)
• Initial Price: $6
• Current Price: $90
• Profit/Returns: 1,400% or 14x your initial capital
Total Value of Your Monero Today: $15,000
6. Dash (DASH)
• Initial Price: $9
• Current Price: $285
• Profit/Returns: 3,000% or 30x your initial capital
Total Value of Your Dash Today: $31,000
7. Augur (REP)
• Initial Price: $5
• Current Price: $18
• Profit/Returns: 360% or 3.6x your initial capital
Total Value of Your AugurToday: $3,600
8. Waves (WAVES)
• Initial Price: $0.30
• Current Price: $3.55
• Profit/Returns: 1,083% or 10.83x your initial capital
Total Value of Your Ripple Today: $11,830
9. Maidsafe (MAID)
• Initial Price: $0.09
• Current Price: $0.35
• Profit/Returns: 380% or 3.8x your initial capital
Total Value of Your Maidsafe Today: $3,800
10. NEM (XEM)
• Initial Price: $0.004
• Current Price: $0.2
• Profit/Returns: 4,900% or 49x your initial capital
Total Value of Your Ripple Today: $50,000
Total Value of Your Top 10 Altcoins Today: $194,730*
*Prices derived from Coin Market Cap from October 30th, 2016 until now
You'd have $86,000 worth of bitcoin now with Option 1, from an initial $10,000 of capital. With Option 2 however, you'd have around $194,730.
This is assuming that you invested in the top 10 altcoins a year ago without doing any due diligence; just simply picking the coins which are the biggest in size according to their market capitalization.
In the top 10 list, only 2 altcoins had a lower rate of return than Bitcoin, which were Augur (3.6x) and Maidsafe (3.8x). But essentially all coins generated a profit. (See also: Guide to Common Crypto Terms)
It’s common to hear many within the community question about the feasibility of investing into altcoins whenever they’re in a sea of red (falling in value). The above analysis justifies the reason for doing so.
The profit potential in investing on altcoins is enormous; that’s assuming if you have a little patience and go with fairly reputable altcoins (based on market capitalization). (Read more: Guide on Identifying Scam Coins)
It is important to note, however, that the introduction of newer coins coupled with cryptocurrencies’ extreme volatility may result in a change in the current market situation; the top 10 cryptos last year may not be the biggest coins now.
Some Ponzi scheme coins are even in the top 10 biggest coin now (I’m looking at you Bitconnect). Nonetheless, with some research and most of all, patience, chances are you'll do well if you invest in some decent altcoins and hold them for a while instead of panic selling and berating yourself for not buying Bitcoin instead every time your coins dip.
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I’m Aziz and I’m a seasoned cryptocurrency trader who’s really passionate about 2 things: #1. The awesome and revolutionary technology underlying Cryptos (Blockchain)#2. Making a ton of money along the way!