You will be faced with a lot of thoughts when you enter the cryptocurrency market for trading. Of course, it is up to you how you choose to trade and which strategies you take advantage of. However, you will have to spend some time to find out which particular crypto assets you will be trading when you become a trader.
There is no restriction on you to trade only a specific digital currency. However, it does make things easier when you have made up your mind about one already. You can always diversify your portfolio once you have become a successful trader.
So, one of the things that many new traders ask is if it is enough for them to trade bitcoin alone. So, can you live by only doing bitcoin trading? Find out the detailed answer below.
Why Consider Bitcoin Trading Solely
First, you have to figure out why people even consider trading bitcoin only when they have so many different options. There can be hundreds of reasons behind that notion. However, you will read about the most prominent ones right now.
- You Want to Keep Things Simple
Since the inception of the cryptocurrency market, new cryptocurrencies have been coming in almost every single day. If you look at the list of cryptocurrencies that are present in the world today, you will find thousands of them. Yes, there are thousands of cryptocurrencies that you can trade today.
However, you can’t trade them all at once. Not to mention, you will not find interest in trading them all because not every cryptocurrency is going to produce great results i.e. profits, for you. Now, when you follow the market, you keep hearing news about a new cryptocurrency almost every other day.
This can cause a lot of confusion to people who are not just new to the cryptocurrency market but trading as well. They can’t put their finger on which cryptocurrency is better and which one they should never invest in. At the end, their mind comes up with the best plan, and that is to invest only in bitcoin. They are doing nothing wrong if you think from their perspective for once.
- You Want to Make a Lot of Money
There is nothing wrong with the dream of making a lot of money. And if you see that there is a way of doing that, why not try it? That’s what many people are doing right now. They might not even be interested in a world where cryptocurrencies prevail, but they sure do want to make money off them while they are a thing in the world.
The best thing about bitcoin is that it has been around the longest time and it is also only of the cryptocurrencies with the most limited supplies. The limited supply of this cryptocurrency has given it a huge value in the market. You will have to spend thousands of dollars to get just one Bitcoin even today.
The value has been stable at this point for quite some time. With other digital currencies, they also have been around for years, but their values are quite small. When you think about spending money on trading them, you can’t see a huge return.
On the other hand, you see huge returns when you trade bitcoin even if you trade only a small amount of money. You must not forget that with a value as huge as that of bitcoin, even the smallest movement in the market translates to huge gains. So, if you want to make a lot of money from trading, you won’t find any other option as suitable to make your dream come true as bitcoin.
- You Can Trust Bitcoin
The most important factor that makes people from around the world interested in trading Bitcoin is the trust. Yes, you have to trust the asset that you want to invest your money in. Cryptocurrencies are always facing a lot of negative media coverage.
In fact, there are some huge investors of the world who just can’t find any value in them, despite the fact that many have already become millionaires by just trading bitcoin. In most cases, you do not see the most renowned investors investing their money in digital coins. The few cases in which they have, the only currency that sticks out is bitcoin.
They are not investing in the blockchain technology or other cryptocurrencies. All they are interested in is bitcoin trading. In the same manner, the general public seems to be more trusting of bitcoin because they have seen this currency on top since forever.
They know it is the first digital currency and they also know that no other cryptocurrency comes even close to this one. In fact, some people think that the blockchain is bitcoin or vice versa. If you believe so, you should know that this is not the case.
Is It Okay to Trade Bitcoin Only?
You can’t answer that question with a simple yes or no. How you choose to trade is your choice but scenarios and success rates differ from person to person. Here are some arguments in the favor of Bitcoin trading and against it. Pick your side as you please.
Arguments in the Favor of Trading Bitcoin Only
If your primary purpose of trading is to make money, you should only trade bitcoin. You cannot find another cryptocurrency that’s as powerful and strong as bitcoin. Not to mention, it has a huge value and for that reason, you can make great profits from it.
If you have not checked the charts and conversion rates recently, let us remind you that at the time of writing this, bitcoin is trading at over $8700. Can you find another cryptocurrency that is worth this much after several years have already passed since the inception of the blockchain technology? Of course, you cannot find any other digital coin quite like it.
Secondly, you can’t put your money in anything that you can’t trust. Think about the big cryptocurrencies that started with the biggest initial coin offering events. Some of them turned out to be complete frauds. Yes, many cryptocurrency developers were frauds and they ran away with people’s money.
In other cases, the teams behind cryptocurrencies promised too much but delivered nothing. As time passed, people realized that those cryptocurrencies were nothing but a sudden passion of developers to do something new. They were never going to put in the efforts that are required to make a cryptocurrency accepted around the world.
Some cryptocurrencies were successful at first but they then started facing lawsuits because financial authorities thought they were not currencies, but securities. That same thing has happened with Ripple recently. Ripple has remained one of the most reliable cryptocurrencies since its inception but even it has faced lawsuits in the recent years.
What made things go against Ripple was the fact that people saw the lawsuit’s verdict going against Ripple. The only currency that people can trust to this day is bitcoin. It is what it is – a currency. You can say that simplicity and straightforwardness of bitcoin has kept it safe from a variety of issues that other cryptocurrencies face.
Arguments Against Trading Bitcoin Only
At this point, you have to think like a professional trader. You cannot put all your eggs in the same basket. Hence, you should consider trading other cryptocurrencies as well. While bitcoin has remained safe on most fronts, it has its challenges as well. The biggest challenge this currency faces is in the form of consensus mechanism that it uses.
It uses a consensus mechanism, which is known as proof of work. The more work you do the more chances you have of confirming its new block on the blockchain and mining a new unit. However, in doing so, you have to use a tremendous amount of computing resources. In short, you produce a large amount of heat pollution.
Another important thing to consider is that you have to think like a professional trader. A professional trader is always looking to diversify his/her portfolio. To diversify your portfolio, you have to put your money in a variety of assets in different financial markets.
Perhaps, you want to become an expert trader only in cryptocurrencies. Even if that’s the case, you have thousands of cryptocurrencies to choose from. You can trade them in addition to trading bitcoin. If no other reason works, you should at least think of trading other digital coins as a way to offset your risks of trading just bitcoin.
If you choose to trade bitcoin only, you will not be the first one. There are thousands of traders from around the world who only trade bitcoin because they trust this cryptocurrency, find its scope practical, and get huge value from trading it.
However, you will be doing an equally great job if you choose to trade an altcoin. There is no fixed strategy to make money in the cryptocurrency market. Pick your strategy, choose the right broker, create an account, use leverage, and play like a pro to earn the money you have only dreamed of.