1 Crypto for any new investor

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There are literally thousands of cryptocurrencies in circulation today. However, most of them are useless, meaningless, provide no real use or value, and will probably cease to exist one day.

For investors new to cryptocurrency, it can be difficult to navigate this maze, especially when it seems like every couple of weeks some obscure cryptocurrency hits the market and produces an almost immediate return. While it may sound appealing, chasing these “wannabes” isn’t sustainable for long-term success.

Despite the multitude of cryptocurrencies out there, there is really only one that should be in your wallet – Bitcoin (BTC -0.27%). This strategy might not earn points for its originality, but investing should be simple. By buying Bitcoin, investing in the complicated mess of cryptocurrencies becomes navigable and simple.

But getting to that realization might take a little more than my word.

follow the guide

Bitcoin is the most valuable cryptocurrency – by far. As of this writing, its market capitalization is just under $400 billion and is currently worth more than companies like Walmart, Meta Platforms, and Bank of America. It is also more than twice as valuable as its nearest competitor, Ethereum.

What is more important, however, is that Bitcoin represents the overwhelming majority of the value of the entire cryptocurrency asset class. For this reason, most other cryptocurrencies actually correlate to the price of Bitcoin. As Bitcoin goes, so does the rest of the market.

You might think of Bitcoin much like the S&P 500. When it comes to the stock market, popular advice says to invest in the S&P 500 and get back to work. The same could be said for Bitcoin in the cryptocurrency market. Rather than trying to find some obscure cryptocurrency that might beat Bitcoin in the short term but eventually fail, the safest and easiest path is to invest in Bitcoin and hold onto it for the long term.

The real cryptocurrency

Fully understanding why Bitcoin is at the top requires a bit more work and understanding of complex issues related to cryptography and blockchain science. Rather than getting into the weeds, we’ll keep this at surface level.

Bitcoin’s original intention was to create a decentralized and secure way to transfer value without the need for an intermediary like a bank or company to take some of the money being transferred. It turns out that Bitcoin not only facilitates this, but also has characteristics that make it a more effective means of preserving value than the dollar itself.

The creator of Bitcoin has never been found or identified. All anyone has is a pseudonym, Satoshi Nakamoto, which was left on open forums after Bitcoin was released in 2009. Whether Nakamoto was just an individual or a group of people, they wrote the code behind Bitcoin to s ensure that there will only ever be 21 million coins in circulation. It is a simple yet effective way to ensure that Bitcoin benefits from price appreciation as supply decreases and demand increases.

In addition to limiting the number of bitcoins to be created, Nakomoto went above and beyond to orchestrate the means by which Bitcoin would maintain its integrity. This is where things get a little complicated and words like proof of work and 51% attack are thrown around, but put simply, Bitcoin is the epitome of decentralization and security. This is something that many other existing cryptocurrencies cannot even come close to.

These other cryptocurrencies are often controlled by a group of developers, venture capitalists and founders hiding behind the veil of “decentralization” who actually own most of the cryptocurrency and are able to inflate its supply. , destroy large amounts of it whenever they want, or even change the way it is created. This is not the case with Bitcoin.

Simple and straightforward

This level of decentralization, security, and attractiveness as a store of value has helped Bitcoin rise to a class of its own and become the most valuable cryptocurrency today. For this reason, Bitcoin is now not only acquired by retail investors like you and me, but also by listed companies, billionaires, and even governments of countries.

As this upward trend in demand increases, to the benefit of investors, the limited supply of Bitcoin will come under more pressure and its price is subsequently expected to rise in the future. So rather than trying to find the next meme piece, keep it simple. Buy Bitcoin, hold and get back to work.

Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Bank of America is an advertising partner of The Ascent, a Motley Fool company. RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool holds positions and endorses Bank of America, Bitcoin, Ethereum, Meta Platforms, and Walmart. The Motley Fool has a disclosure policy.

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