Known as the king of all cryptocurrencies, Bitcoin is still the world’s most valuable digital asset, boasting a market capitalization of more than $700 billion. In 2021, the currency invented by Satoshi Nakamoto reached its all-time highs, peaking at more than $60,000 in April.
However, the recent Bitcoin bull run suffered a significant decline in mid-April. Currently, the “digital gold” is trading at around $38,000 with slight fluctuations up and down.
In this context, many investors are searching for investment alternatives to participate in the crypto market without buying Bitcoin. In this article, you will find out 3 ways to profit within the crypto markets without purchasing Bitcoin.
On top of that, you can also try crypto derivatives such as futures and options, available on specialized platforms like Binance Futures, FTX, and Bitlevex.
Investing in Ethereum (ETH)
Considered Bitcoin’s biggest dark horse, Ethereum (ETH) is the second-largest coin by market cap ($ 280 billion in total market value).
It’s crucial noting that Ethereum is the name of the platform itself, while Ether is the digital currency that you will be investing in. Also, Ether is used to pay gas fees on the Ethereum network.
Ethereum’s goal is to be a platform for smart contracts to execute on, as well as having other cryptocurrencies (tokens) built on the platform. In fact, the main factor that distinguishes Ethereum from Bitcoin is the fact that it runs smart contracts.
Smart contract technology is one of the most promising innovations available in the market, as it has the potential to change how real-world transactions are being done.
Currently, Ethereum is trading about $2,400 per coin, which is quite an impressive number considering that it was trading around $200 last year. Ethereum’s supply is currently at around 116,000,000 ETH in circulation, but other tokens can be created infinitely on top of the platform.
Investing in Cardano (ADA)
Cardano is another smart contract platform, but it aims to be better than Ethereum in terms of scale, speed, and energy efficiency. Founded in 2015 by Ethereum co-founder Charles Hoskinson, the platform is open-source and uses a PoS (Proof-of-Stake) consensus mechanism.
When compared to Bitcoin and Ethereum, Cardano distinguishes itself by not relying on PoW (Proof-of-Work) as a consensus mechanism.
Hence, Cardano (ADA) stakeholders are responsible for verifying and validating transactions, meaning the more ADA you hold, the better of a chance you have to get these tokens back as rewards.
This way, unlike Bitcoin and Ethereum, Cardano does not require any mining effort. In fact, the reality is that a PoW model is not as good as a PoS model, as it does not incentivize users to stay around the same blockchain network.
Some investors believe that using Cardano as a hedge for Ethereum can be a good strategy, especially as we don’t know what’s going to be the definite smart contract platform in the future.
Investing in Polygon (MATIC)
Considered by experts as one of the most underrated digital assets in the crypto industry, Polygon (MATIC) is a multi-chain scaling solution for Ethereum. The platform’s goal is to provide faster and cheaper transactions on the Ethereum Network by using layer 2 side chains.
Scaling has become an increasing demand among Ethereum users, especially when it comes to reducing network congestion and gas fees. On top of layer 1 and layer 2 scaling upgrades, Polygon aims to create an ecosystem of multiple scaling solutions such as side chains, plasma, Zk rolling, and other similar innovations.
Currently, Polygon is trading at $1.51 per coin, with a market of around $9 billion. Even though it may sound a bit dull in comparison with more bullish coins, Polygon’s long-term potential cannot be compared.