As we venture into 2024, the question on every crypto investor’s mind is: Is Bitcoin the best crypto to buy right now? Bitcoin, the original cryptocurrency, has not only pioneered the digital currency space but has also become a benchmark for the crypto market at large.
Bitcoin (BTC) was the first cryptocurrency ever created and remains the most widely adopted and valuable crypto. But is buying Bitcoin still a good investment in today’s crowded crypto market? Or are there better cryptocurrency options for investors to allocate their funds to?
This article examines the key factors that make Bitcoin unique compared to other cryptocurrencies and evaluates if it remains the best crypto investment option for new investors.
What Makes Bitcoin Unique?
There are several key features of Bitcoin that differentiate it from the thousands of altcoins (alternative cryptocurrencies) that have launched since Bitcoin’s creation in 2009:
- First-mover advantage – As the first decentralized cryptocurrency, Bitcoin has become synonymous with crypto and enjoys unmatched name recognition and trust.
- Largest market capitalization – Bitcoin’s market cap hovers around $400 billion, more than double the next largest crypto Ethereum. This makes Bitcoin the most valuable crypto.
- Most secure blockchain – Bitcoin utilizes a proof-of-work mining consensus that makes its blockchain extremely secure and tamper-resistant.
- Wide mainstream adoption – From corporations like MicroStrategy to financial institutions like Fidelity, Bitcoin enjoys the most mainstream adoption for payments and investing.
- Largest liquidity – Bitcoin has the largest 24-hour trading volume and the most liquidity. This makes it easy to enter and exit large positions.
- Fixed supply – Bitcoin has a fixed supply of 21 million coins, creating built-in scarcity that supports its value over time.
These unique advantages have allowed Bitcoin to cement itself as the top cryptocurrency over the past decade. But critics argue limitations like slow transaction times and high fees make Bitcoin risky compared to “Bitcoin 2.0” cryptos.
So does Bitcoin still deserve to be the main crypto in investors’ portfolios?
The Case For Buying Bitcoin
While the crypto space has evolved rapidly, there is a strong case that Bitcoin remains the best crypto investment – especially for new investors.
1. Role as a Store of Value
The primary investment case for Bitcoin is its role as “digital gold” – a hedge against inflation and store of value over the long-term.
With its predictable and fixed supply schedule, Bitcoin’s supply is not subject to printing and devaluation like fiat currencies. This makes Bitcoin attractive as a future global currency system with immunity from reckless government spending.
And with global debt levels soaring and fears of currency debasement rising, Bitcoin offers a potential safe haven asset similar to gold. This view has attracted institutional investment from firms like Goldman Sachs and ARK Invest.
As a reference, if an investor put $1,000 into Bitcoin 5 years ago (December 2016), it would now be worth over $16,000 – dramatically outpacing gold and stock market returns over the same time period.
While Bitcoin’s price is volatile, its long-term potential as “digital gold” remains a central investment thesis.
2. Mainstream Adoption Momentum
In 2021, Bitcoin adoption went mainstream – a trend expected to continue putting upward pressure on prices.
In 2021, major companies like Tesla, Square, MicroStrategy and others allocated billions of dollars of their balance sheets to Bitcoin. And platforms like PayPal enable hundreds of millions of users to buy, sell, and hold Bitcoin.
As more large entities add Bitcoin to their balance sheets, it further validates Bitcoin’s role as the premier crypto asset. This mainstream momentum adds confidence in Bitcoin’s future appreciation.
3. Network Effects and First-Mover Advantage
As the first cryptocurrency, Bitcoin benefits from unmatched name recognition and market dominance.
With over 100 million users worldwide and counting, Bitcoin is by far the most established network. And crypto historically tends to build in waves – with new sectors emerging while Bitcoin retains its core value proposition as a stable store of value and hedge against currency debasement.
While competitors like Ethereum provide additional functionality like smart contracts, Bitcoin is likely to retain dominant market share in the pure digital currency use case. These powerful network effects solidify Bitcoin’s brand and first-mover advantage.
4. Most Secure and Decentralized Network
Bitcoin’s proof-of-work mining system makes it incredibly costly and difficult for attackers to overtake and manipulate the blockchain.
The Bitcoin blockchain’s unmatched security stems from its enormous hashrate – the combined computing power securing the network. Billions of dollars of custom ASIC mining hardware would be required to execute attacks on the Bitcoin network.
This security gives Bitcoin a major advantage in retaining its role as the most trusted blockchain. Bitcoin is further reinforced by its ethos of decentralization and resistance to government control.
Given the importance of blockchain security and integrity, Bitcoin’s power consumption trade-offs provide superior safety compared to proof-of-stake systems like Ethereum 2.0.
For investors prioritizing security, Bitcoin stands out as the most secure and decentralized cryptocurrency network by a large margin.
The Case Against Bitcoin
Despite Bitcoin’s advantages, there are some drawbacks that could open the door for “Bitcoin 2.0” cryptocurrencies to overtake it in the future.
1. Slow Transaction Speeds
A common criticism of Bitcoin is that its transaction speeds are too slow compared to other cryptos.
On average, Bitcoin can only process approximately 7 transactions per second. Newer blockchains like Solana boast speeds of over 50,000 transactions per second through novel solutions like proof-of-history.
While second layer scaling solutions like Lightning help, Bitcoin faces challenges scaling to keep up with payment processing demands if crypto adoption accelerates. These limitations could prevent Bitcoin from evolving into a mainstream payment rail.
2. High Transaction Fees
Related to its scaling challenges, Bitcoin suffers from high and variable transaction fees compared to other cryptos.
Bitcoin’s average transaction fee reached $60 in November 2021, pricing out smaller transactions. And competitive fast and low-fee blockchains could be better suited for daily consumer crypto spending.
3. Inflexibility to Upgrade
One advantage of newer blockchains is the ability to quickly upgrade and iterate. But Bitcoin’s highly secure network makes it slow to implement new changes.
Upgrades like Taproot that enable smart contract functionality took years to implement in Bitcoin. While Bitcoin’s conservatism enhances its security, it lacks flexibility compared to more adaptable blockchains.
4. Environmental Concerns
As a proof-of-work blockchain, Bitcoin relies on energy-intensive computing to function. Its annual energy consumption is estimated on par with small countries like Malaysia.
While Bitcoin incentivizes renewable mining, its environmental impact could bring negative PR and calls for regulation. This could be a motivator for large entities to avoid Bitcoin and adopt lower energy alternatives.
Green-friendly platforms like Solana and Cardano could benefit from a shift towards environmental sustainability in crypto.
Top Bitcoin Alternatives for 2024
If Bitcoin’s limitations are a concern, what are the top alternative cryptos investors should consider for 2023?
Here are 5 of the most promising Bitcoin alternatives based on project quality, use cases, and growth potential:
|Ethereum to buy now
|Pioneer of smart contract functionality and host to most DeFi and NFT activity. Moving to more sustainable proof-of-stake consensus.
|Solana as investment
|Ultra fast and low cost blockchain capable of 50,000+ transactions per second. Strong ecosystem of DeFi and NFTs.
|Polkadot as investment
|Interoperable blockchain network that allows external blockchains to plug in. Strong crypto team.
|Cardano to buy now
|Research-driven blockchain focused on security, scalability, and programmability. Uses proof-of-stake.
|Dogecoin as investment
|Dogecoin: A meme-inspired cryptocurrency with a friendly community. Fast, low-cost transactions. Popular for tipping and charity.
This list gives a sample of high-potential “Bitcoin 2.0” cryptos that could be alternatives depending on your investment priorities. They offer distinct advantages like greater speed, lower fees, and sustainability compared to Bitcoin.
However, Bitcoin still remains a highly advantageous asset for stability and balance – especially for first-time crypto investors.
Conclusion: Bitcoin Remains the Best Crypto for New Investors
Given its track record over the past decade plus, Bitcoin remains the best cryptocurrency investment – especially for investors new to crypto.
As the crypto market evolves, Bitcoin offers unmatched stability due to its brand recognition, network effects, and adoption as a digital reserve asset.
In an emerging and highly volatile asset class like crypto, Bitcoin’s staying power gives investors confidence. While competition is heating up, Bitcoin remains the gold standard in cryptocurrency.
For new crypto investors building their first portfolio, an allocation to Bitcoin is strongly recommended. Though a small percentage of funds can be dedicated to higher risk/reward altcoins, Bitcoin should form the larger backbone of any crypto portfolio.
When in doubt, staying simple with Bitcoin remains a wise move for 2023 and beyond. As the most influential cryptocurrency, Bitcoin offers an unrivaled mix of security, adoption, and long-term upside as a store of value. While the crypto space will continue rapidly innovating, Bitcoin’s position at the top remains justifiable.