1 crypto for every new investor

There are literally thousands of cryptocurrencies in circulation today. However, most of them are pointless, pointless, provide no true utility or value, and will likely cease to exist one day.

For investors new to cryptocurrency, navigating this maze can be difficult – especially when it seems like every other week some obscure cryptocurrency hits the market and offers an almost instant return. Although it may look attractive, chasing after these “wannabes” is not sustainable for long-term success.

Despite the variety of cryptocurrencies that exist, there’s really only one that needs to be part of your portfolio — Bitcoin (BTC -0.24%). This strategy may not win points for originality, but it should be easy to invest. By buying Bitcoin, investing in the convoluted mess of cryptocurrencies becomes navigable and easy.

But coming to this realization may require a little more than just my word.

Follow the leader

Bitcoin is the most valuable cryptocurrency – in the long run. As of this writing, its market cap is just shy of $400 billion and is currently worth more than companies like Walmart, Meta platformsand Bank of America. It is also more than twice as valuable as its nearest competitor, Ethereum.

Of greater importance, however, is that Bitcoin makes up the overwhelming majority of value in the entire cryptocurrency asset class. For this reason, most other cryptocurrencies are actually correlated to Bitcoin’s price. As Bitcoin goes, so does the rest of the market.

You can think of Bitcoin in a way that 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 can be said about Bitcoin in the cryptocurrency market. Instead of trying to find an obscure cryptocurrency that can beat Bitcoin in the short term but ultimately fail, the safer and easier route is to invest in Bitcoin and hold on for the long run.

The truest cryptocurrency

Understanding why Bitcoin is on top requires a little more work and understanding of complex issues related to cryptography and blockchain science. Instead of getting into the weeds, we want to keep this at surface level.

The original purpose of Bitcoin was to create a decentralized and secure way to transfer value without an intermediary such as a bank or company needing to take a cut of money. It just so happens that Bitcoin not only facilitates this, but also has properties 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 the world has is a pseudonym, Satoshi Nakamoto, which was left on open forums after the release of Bitcoin in 2009. Whether Nakamoto is just one individual or a group of people, they wrote the code behind Bitcoin to ensure that there will only ever be 21 million coins in circulation. It’s a simple but effective way to ensure that Bitcoin benefits from price appreciation when supply decreases and demand increases.

In addition to limiting the number of bitcoins to be created, Nakomoto outdid himself in orchestrating the way Bitcoin would maintain its integrity. This is where things get a little complicated and words like proof-of-work and 51% attack get thrown around, but to keep it simple, Bitcoin is the epitome of decentralization and security. It’s something many other cryptocurrencies in existence can’t even come close to.

These other cryptocurrencies are often controlled by a group of developers, venture capitalists and founders who hide behind the veil of “decentralization” who actually hold most of the cryptocurrency and are able to inflate the supply, destroy huge amounts of it at will, or to and with changing how it is made. That is not the case with Bitcoin.

Easily

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

As this trend of increased demand grows, to the benefit of investors, Bitcoin’s limited supply will be put under more pressure and the price should subsequently rise in the future. So instead of trying to find the next meme coin, just keep it simple. Buy Bitcoin, hold and get back to work.