‘Altcoins’ up 5x on hunt for next Bitcoin
These have seen a 4-5x growth. Bitcoin (BTC) is up 2x in the last 30 days in terms of buying volumes. According to Nischal Shetty, founder and CEO of WazirX, besides Bitcoin, many other tokens have grown tremendously in the last one week (see graphic). BNB has grown by over 100%, Swipe (SXP) has grown by 48%, Dash (DASH) by 41%, WazirX Token (WRX) by 14% and TRON (TRX) has grown by 12%.
There is a whole wave of investors who are not only buying into the crypto narrative, but have caused an explosion in altcoin purchases, say cryptocurrency exchanges. Sharan Nair, chief business officer at CoinSwitch Kuber, said, “Most Indian investors are on the lookout for the next Bitcoin. They feel Bitcoin is already expensive and are betting on altcoins, with the hope of a similar growth.”
Altcoins refer to all cryptocurrencies other than Bitcoin and similar alternatives. The success of Bitcoin as the first peer-to-peer digital currency paved the way for this trend. Many altcoins are trying to leverage on the perceived limitations of Bitcoin. Cryptocurrency exchanges say the Indian market mirrors the global one. Buyers want to explore alternate coins as they are much cheaper and have an aggressive growth potential.
Despite Bitcoin crossing $50,000 this month, altcoins have outperformed it. Cryptocurrency exchanges say Indian investors who wanted to get an exposure in crypto have diversified their investment with 60% in Bitcoin and 40% in altcoin currently. Earlier, in December 2020, most investors’ portfolios had about 30% in altcoins and 70% in Bitcoins.
“Bitcoin could be the reserve currency for the crypto world. However, altcoins offer very different perspectives. For example, Ethereum, the most popular altcoin in terms of market cap, builds a decentralised distributed computing network. It offers an alternative to using a Google cloud. This means it offers complete auditability and one can read every line of code. Here, the consumer pays for the interaction, and the currency is called Ethe,” said Darshan Bathija CEO of the crypto platform Vauld.
On the demography of Indian investors, Shetty said, “Female participation has increased this year. In 2020, about 87% were male and 13% were female. Now the female traders have gone up to 15%.” Bitcoin and its first few alternatives like Litecoin and BitcoinCash eliminated middle men for processing transactions. However, the middle men were still needed for contractual obligations. “This issue got answered with more advanced alternatives like Ethereum that are capable of executing smart contracts including decentralised financing,” said co-founder of Unocoin, Sathvik Vishwanath.