Buy Bitcoin vs Altcoins: Why Your First Crypto Should Probably Be Bitcoin

With thousands of digital assets on the market, Bitcoin is still the most logical starting point for new investors building a portfolio.

What is the difference?

To understand crypto, it helps to separate the original from the alternatives. An altcoin is simply an "alternative coin", which means any cryptocurrency that is not Bitcoin.

Bitcoin was created primarily as a decentralised store of value and a medium of exchange. Altcoins have broadened the use cases. Platforms like Ethereum, Solana and Cardano act more like operating systems for applications. Others target specific niches, such as gaming, artificial intelligence or supply chain tracking.

With so many options, it is easy for new investors to chase the next hot token. Even so, there are strong reasons why Bitcoin is usually the best place to start.

The “OG” advantage: Stability in a volatile market

Bitcoin was launched in 2009 by the pseudonymous Satoshi Nakamoto. It became the blueprint for the entire industry. After more than 15 years of market cycles, regulatory attention and economic shocks, it has built a track record of survival.

All cryptocurrencies are volatile. However, Bitcoin’s price swings are usually smaller than those of lower market-cap coins. A small altcoin might double in price overnight, then crash just as fast. Bitcoin tends to move more like a maturing asset with deeper liquidity and broader participation.

For beginners, that relative stability helps. Bitcoin can act as a steadier entry point, so you can get used to crypto without immediately facing the wild price swings of experimental projects.

Digital Gold: The store of value idea

Bitcoin’s most famous feature is its fixed supply. There will only ever be 21 million Bitcoin. This cap is hardcoded into the protocol, which makes Bitcoin structurally scarce. It stands in contrast to fiat currencies, which governments and central banks can create in unlimited amounts.

Because of this, many people refer to Bitcoin as "digital gold". They treat it as a long-term savings asset rather than a short-term trade.

Many altcoins work very differently. Some have no supply cap. Others use inflationary or complex token models that can dilute existing holders over time.

If your main goal is long-term wealth preservation, Bitcoin’s economic model is usually easier to understand and evaluate.

The network effect and ease of adoption

In economics, a network effect happens when a product becomes more useful as more people use it. Bitcoin has the strongest network effect in crypto.

It is the most recognised digital asset in the world. As a result, the infrastructure around it is highly developed. More merchants accept it. Almost every wallet and exchange supports it. Traditional finance has integrated it through products like exchange-traded funds (ETFs) and institutional funds.

For a beginner, this matters a lot. Buying, selling and storing Bitcoin tends to be straightforward on almost every major platform.

By comparison, buying certain altcoins can be far more complex. You may need to navigate decentralised exchanges, move assets across different blockchains, and manage unfamiliar "gas fees" in different currencies.

Real-life examples: How it works in practice

It is easier to see the difference if you compare the everyday experience of owning Bitcoin with owning a niche altcoin.

The Bitcoin experience

Imagine you want to buy AUD $150 worth of crypto. You sign up with an exchange, purchase Bitcoin, then decide what to do with it.

You can leave it on the exchange or move it to a personal wallet. Transferring it is similar to making an online bank transfer, but to a crypto address instead of a BSB and account number. After that, you simply hold it. The value goes up and down with the market. It is a passive and relatively simple investment process.

The altcoin experience

Now, imagine you want to buy a specific decentralised finance (DeFi) altcoin that is not listed on your local exchange.

1. You may first need to buy a major coin such as Ethereum.
2. You then transfer that Ethereum to a browser-based wallet.
3. Next, you connect the wallet to a decentralised exchange to swap into the altcoin you actually want.
4. At every stage you pay transaction fees, often in a token you did not realise you needed in the first place.

Each step adds more room for error. Mistyping an address, choosing the wrong network or misunderstanding a fee can be a costly mistake.

Starting with Bitcoin keeps the learning curve gentler. You can get familiar with private keys, wallet addresses and basic blockchain security, without dealing with multiple layers of technical complexity.

Risks and red flags: The dark side of altcoins

Altcoins are responsible for much of the experimentation in crypto. That is positive for innovation, but it also introduces extra risk.

If you decide to go beyond Bitcoin, it is important to understand what you might be stepping into.

• Pump and dump schemes
  Smaller, low-liquidity altcoins can be heavily manipulated. Bad actors push up the price to draw in unsuspecting buyers, then dump their holdings. Prices can collapse to near zero in a matter of hours.

• Abandonment and centralised control
  Bitcoin has no central company or CEO. Many altcoins, however, are controlled by small teams or single organisations. If that team runs out of funding, loses interest, or faces legal issues, development can stop. In extreme cases, this can leave holders with a token that has no active project behind it.

• Extreme volatility and permanent drawdowns
  It is common for smaller altcoins to fall 80 to 90 percent in a market downturn. Some never return to their previous all-time highs. Bitcoin has also had severe drawdowns, but over time it has repeatedly recovered to set new highs. Many altcoins simply disappear from the market or fade into irrelevance.

Bitcoin is not risk-free. However, compared with most altcoins, its history, transparency and size provide a different level of confidence.

Why Bitcoin matters in the big picture

Bitcoin is still the entry point for most people who are new to crypto. It functions as the reserve asset of the digital asset market. Many trading pairs are priced against Bitcoin. Liquidity often flows from Bitcoin into altcoins and back again.

Governments and institutions are also paying attention. Conversations place Bitcoin in a similar conversation to gold or foreign currency reserves, which is not the case for most altcoins.

Starting with Bitcoin does not mean you should never touch altcoins. It simply means you are choosing to build on a stronger foundation.

Once you understand how decentralisation works in practice, how wallets keep your funds secure, and how transactions are recorded on a blockchain, you will be in a much better position to explore the wider world of altcoins. At that point, you can decide which projects, if any, fit your risk tolerance, time horizon and personal interests.

For most new investors, beginning with Bitcoin is not about limiting your choices. It is about giving yourself time to learn before you take on higher levels of complexity and risk.