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In this paid Newsletter I’ll explore the argument for holding/trading Altcoins over Bitcoin. The overall thesis of Bitcoin Escape Plan is to continue amassing more Bitcoin over time - and therefore it is my opinion that Altcoins should primarily be used as a way to buy more Bitcoin, not conversely assets that you should continue stacking without primary function. If you’re earning high yield in an asset that is losing value against Bitcoin then you need to have a really good reason and strategy for holding that asset in the first place. In most cases therefore it is simply better to just continuing to dollar cost average into Bitcoin rather than buying and hoping your Altcoin/Memecoin hits and losing most of the money over time whether through negligence or bad timing. IF you have the personality and ability to trade well then there are a lot of opportunities to make quick money there - but just as many opportunities for you to lose it. So if the average person would be better off just buying and holding Bitcoin then what are the reasons to hold or trade Altcoins?
Altcoins provide leveraged exposure to BTC in the form of volatility and can therefore be traded for much larger gains or losses.
Altcoins can be staked or earn high yield that may outpace the performance or pace of your accumulation of Bitcoin on your own.
Altcoins provide access to complicated financial contracts and DeFi itself works better with Altcoins than it does with Bitcoin currently.
Altcoins are just one of the vehicles that liquidity drives in the markets and knowing how to take advantage of them is valuable to know.
Why hold Bitcoin instead of Altcoins?
Bitcoin seeks to solve the Store of Value narrative - Altcoins are not built the same way that Bitcoin is.
From a trading perspective, there are few assets more pristine than Bitcoin - but naturally it’s become less volatile overtime and people grew bored of it. It behaves predictably as you have seen from reading my other Newsletters, Threads or YouTube videos. So when you are purchasing Altcoins instead of Bitcoin you need to accept a much higher Risk Tolerance as well as an undefinable outcome for the asset. Whereas in my opinion the path of Bitcoin to $1 Million and higher is priced in for a variety of reasons and no other assets can actually claim a practical roadmap of funding that I trust personally. (This is where the XRP Army will likely come for my head I suppose).
If your goal with your portfolio is for the small number you put in to one day be a larger number reliably rather than unpredictably - then Bitcoin is your choice. If you want to spend all your time on X and YouTube and on Discord and Telegram chats to understand the ebbs and flows of small liquidity assets you are free to do so - but again most people will outperform all that risk simply by buying when it’s BELOW the Weekly/Monthly SMA and holding it. Many Altcoins will outperform Bitcoin for a short time but they usually end up bleeding back to Bitcoin once the cycle restarts and if you’re left holding a bag it may take considerably longer than you would like for it recover - if at all.
MY Perspective
If you buy Bitcoin at the absolute top each cycle - you must wait a period of 5 years for the price to comfortably move past that price again. That’s what the chart tells us clear as day. You cannot make that same assertion for 99.9% of the Altcoins and any assertions you can make are often much less easy to predict in my opinion than Bitcoin. Again. It’s very valuable to be able to notice trends and hop in and out of these Altcoins but to hold them through cycles in the hopes they’ll return is very foolish.
People get locked into the idea of a community or a certain problem to solve and they ignore how much money is actually in these assets and what function they are actually providing to you. Bitcoin is held by governments and major corporations. You could count on one hand (maybe both hands) how many Cryptocurrencies both Governments and Corporations are amassing alongside wealthy individuals. Why would you not be focused on amassing more of the asset those people want?
Wealthy people don’t want your XRP and they may want your Ethereum but unless they have a strategy for flipping it and increasing their stack then there’s no point to holding massive amounts of capital in an asset that’s going to consistently underperform Bitcoin. It doesn’t make sense on a dollar basis or a Bitcoin basis. So if you can trade well - then learn the Bitcoin pairings of each asset and use that knowledge to amass more Bitcoin. But if you can’t - then you’re better off studying more and just focusing on buying more Bitcoin and nothing else even if all the other green candles look appealing. The red ones will be much worse for you.
That’s the end of the Free Preview section but you can go check out the video version on YouTube and get some more details than the basic idea I’ve laid out for you here.
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