The Risk to Alternatives

There are pros and cons to altcoins. One pro is that in order to differentiate themselves, altcoins improve on what other cryptocurrencies lack. They provide improved versions to stop potential shortcomings they see in other altcoins. Secondly, altcoins might have a higher survivability due to the diversity of their utilities such as Ethereum’s ether. Lastly, there is a diversity of different altcoins to choose from and investors are able to pick which performs the best and suits their needs. 

However, altcoins have multiple cons as well. Altcoins as a whole have lower popularity and diminished market caps compared to Bitcoin. This means that they have a smaller investment market as compared to the 40% that Bitcoin holds. In addition, with so many altcoins and different utilities, it can make it more difficult to distinguish themselves from other altcoins and make investment decisions more complicated and vaguer. Altcoins are also less liquid compared to Bitcoin due to lesser investors and activity within their markets. Lastly, many of these altcoins could be scams or have lost both community and develop interest. This could end up with people losing invested money into various altcoins.