Cryptocurrencies are still relatively new, and people are naturally skeptical about whether these digital coins are worth all the hype. At the same time, cryptocurrency experts continue to push for people to add them into their portfolios with the argument that these currencies will only gain in value and usage.
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For a new crypto investor, if you’re just dipping your toe into the cryptocurrency realm, there’s one you’ll likely want to prioritize over others: bitcoin.
John Haar, managing director at Swan Bitcoin, explained why bitcoin is the one to consider.
Perhaps the most compelling reason to start with bitcoin is that it is the original cryptocurrency, the first introduced in 2009, Haar said, and one of the most respected and stable coins out there now.
Not all cryptocurrencies are payment currencies, in fact. Haar describes bitcoin most accurately as “a fixed supply, decentralized digital monetary asset.” He pointed out that when you look at every other cryptocurrency, they do not all meet that description.
Additionally, even other forms of currency, such as dollars, do not have a fixed supply.
“In other words, right now, if you hold one bitcoin, you hold one bitcoin out of 21 million bitcoin,” which Haar said is “akin to holding $1 out of the total supply of dollars, with a very big difference being that the total supply of dollars is not a fixed number, it’s anything but fixed.”
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In order for something to be a monetary asset, there has to be a certain amount of usage, Haar said, with people holding it, saving and storing their value in it.
“A lot of the other tokens really don’t meet that description either. So we really do believe that bitcoin stands in a category of its own.”
In addition to being the first of the cryptocurrencies, bitcoin is also the largest, Haar explained.
“If you take the number of bitcoins that are in existence — there’s close to 21 million in existence today — and you take the current price of roughly $96,000, that gives you a total market cap for bitcoin of $1.9 trillion,” he explained.
The next biggest cryptocurrency after bitcoin is Ethereum, with a market cap of $320 billion. “So bitcoin is many multiples bigger than the next cryptocurrency.”
It’s unlikely that the average investor will have multiples of $96,000 to drop on bitcoin today, but fortunately, you can invest in bitcoin in other ways, including investing in crypto exchange traded funds (ETF), through investing in bitcoin “infrastructure” such as blockchain technology and semi-conductors, by investing in bitcoin mining stocks (publicly traded companies that run the equipment that validates bitcoin transactions) and more.