Should You Invest in Bitcoin or ICOs?

Though bitcoin's price is admittedly volatile, historically the digital coin has netted investors almost unheard of returns. The launch of bitcoin futures contracts by the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) has now attracted institutional investors to the world of digital currencies.

As a result, bitcoin has, to some extent, stolen the spotlight from the ever-growing list of initial coin offerings. Developments like this have caused many to wonder whether it makes more sense to invest in bitcoin or ICOs.

Bitcoin and ICOs So Far

Since the inception of bitcoin and ICOs, the former's return on investment and price growth is miles ahead. However, ICO investments have the potential to provide a higher return than an investment in bitcoin.

According to ICOStats, there are many ICOs that have performed better than bitcoin. ICO tokens such as Ether, IOTA, and NXT, have all been performing better. Dozens of other ICOs have also outperformed bitcoin, meaning that, if you happen to choose the right ICO, you stand a reasonable chance of having your investment outperform bitcoin. Nonetheless, there is still a higher risk when it comes to ICO investments.

What Might Happen

Some analysts predict that bitcoin may hit the one million dollar mark in coming years. If this happens, bitcoin is likely to remain on top of the digital asset mountain. The continued flow of investment and hype surrounding it make it attractive to potential investors.

The potential outcome for ICOs, however, is more mixed. It is possible that a lot of ICO tokens will lose their value if the projects associated with them fail. As digital currencies continue to expand, new projects will find it hard to compete against the more established tokens like bitcoin. 

So, Bitcoin or ICOs?

When deciding on where to invest, it's important to remember the difference between bitcoin and ICOs. With bitcoin, you are getting a digital currency with which you can trade. With ICOs, you are investing in a blockchain startup by purchasing tokens. There are pros and cons to each of these investment types.

ICO investments come with a potentially higher return on investment, but they also come with higher risks. One factor to consider when researching an ICO is how the ICO's pre-sale goes. An ICO pre-sale can indicate how a token might perform and whether there is a demand for it.

There is no definitive answer on which investment is better, as it ultimately boils down to the type of investment you are looking to make. A cautious investor might favor bitcoin since it is more established and the risks are somewhat lower. A more ambitious investor may opt for an ICO since it has the potential for higher returns.

An alternative option would be to invest in both. Since bitcoin is the less risky of the two (though it is still considered a risky investment), a larger holding could be placed in it, with smaller holdings going to ICOs. The amount to invest in each would again come down to the investor's preference. This option helps diversify a portfolio, potentially giving investors the best of both worlds. 

Want to know what is going on in the ICO world? Click here for our complete list of Upcoming ICOs. This list includes our exclusive Bitcoin Market Journal QuickScore for each ICO, a useful tool that helps investors evaluate ICOs more fully. While you're at it, read Bitcoin Market Journal and learn to invest like a pro!