5 Reasons to Focus on Bitcoin Only

Like other cryptocurrencies, Bitcoin is highly volatile. Unlike other cryptocurrencies, Bitcoin has provided exceptional returns, peace of mind, and security for hodlers, their families, businesses, and employees over the long term, especially for those using a recurring buy strategy. 

“Crypto, ” on the other hand, brings more volatility and a much greater likelihood of losses — even for experienced traders.

There’s no need to take on these added risks and costs of “crypto” and “crypto exchanges” since you can just buy Bitcoin from a Bitcoin-only company like Swan.

Here are five reasons to support Bitcoin only.

1. Bitcoin ≠ Crypto

There are currently over 2 million cryptocurrencies on the market.

Thousands more have died, leaving investors with nothing. Some claim to be pseudo-equity, governance tokens, yield-bearing tokens, gas for smart contracts, and more.

These coins are DEPENDENT on a leader or foundation to build, maintain, and promote the coins.

Ethereum DAO Hack (2016)

The DAO (Decentralized Autonomous Organization) was a complex smart contract on the Ethereum platform that raised significant Ether through a token sale.

However, a vulnerability in its code was exploited by a hacker, leading to the theft of about $60 million worth of Ether.

To address this, the Ethereum community decided to execute a hard fork of its blockchain.

This hard fork effectively reversed the transactions that led to the theft, returning the stolen funds to their original owners.

It’s important to note that this was a controversial decision, as it went against the principle of immutability that many in the blockchain community hold dear.

As a result of this hard fork, Ethereum Classic (ETC) was created, a continuation of the original Ethereum blockchain where the transactions of the DAO hack were not reversed.

No team of developers can do this on the Bitcoin blockchain.

There is only one fixed supply digital commodity, and that is Bitcoin. Unlike other cryptocurrencies, Bitcoin is INDEPENDENT and fully decentralized, the monetary policy can be trusted, and it has no counterparty risk, CEO, or foundation.

In a world where fiat money is rapidly devaluing, Bitcoin is a unique long-term savings vehicle that deserves a spot on every balance sheet.

In October 2023, Fidelity released a follow-up report titled: Bitcoin First Revisited: about why investors need to consider Bitcoin separately from other digital assets. In it, they double down on why Bitcoin is unique from all other digital assets and belongs in its own category for many of the same reasons discussed in this article.

2. Bitcoin Offers Better Risk-adjusted Returns

History shows that cryptocurrencies are, on the whole, terrible investments. While some coins have a wild run-up when they initially get attention, the hype is short-lived, and most fade away.

As this analysis shows, they rarely regain their previous all-time high in BTC terms.

On the other hand, Bitcoin has the best brand, is the longest lasting, most secure, and performs best in the long term. It is less volatile than other tokens, most losing 95% or more of their value against Bitcoin. Looking at risk-adjusted returns, Bitcoin is the clear winner. 

3. Aligned Incentives For the Win 

The business model for cryptocurrency exchanges is to lure customer funds onto their platform and then either (1) get users to trade between coins or (2) lend customer funds to (risky) counterparties to earn interest. 

Unfortunately, this incentivizes companies like Coinbase and Celsius to act against the interests of their customers. How? 

• Promoting the latest overhyped token to profit off trading fees (see: Coinbase promoting a Ponzi scheme Luna, or promoting the dog coin, SHIB)

• Discouraging self-custody because that means less revenue for them (see: high withdrawal fees and marketing campaigns against self-custody)

Why patronize a company that doesn’t have your best interests in mind?

Bitcoin-only companies like Swan are aligned with their customers’ success. Our business model is simple: we only get paid when you buy (or sell) Bitcoin. We have no incentive to convince our users to trade into risky tokens, and we have no incentive to custody your coins. 

In fact, we promote self-custody and make it as easy as possible for our users by offering FREE and AUTOMATED Bitcoin withdrawals. 

4. Focusing on Only Bitcoin Provides a Better Experience For Clients

Crypto exchanges must incur massive overhead to support hundreds or thousands of often insecure, risky tokens.

To compensate for the higher cost structure, crypto exchanges charge higher fees and monetize their users with predatory methods like promoting speculative tokens and offering extremely risky “yield” products…

Not to mention notoriously awful customer support.

“If you try to please everyone, you’ll end up pleasing no one.”

Focusing only on Bitcoin provides a competitive advantage. Swan can offer lower fees than Coinbase due to reduced overhead. By having a singular focus, the entire company is aligned on the same mission, which increases employee retention and productivity.

Focusing enables us to hire staff that specializes in Bitcoin specifically. Our customers LOVE this. Our team gets on calls with our clients, something the Coinbases of the world could never do.

5. Bitcoin is the Only Cryptocurrency With Regulatory Clarity

Cryptocurrencies and crypto exchanges have regulatory uncertainty hanging over them. In fact, the SEC is investigating Coinbase for listing potentially unregistered securities.

SEC Chairman Gary Gensler has publicly stated that Bitcoin is the only cryptocurrency with commodity status (which implies other tokens are unregistered securities). 

** UPDATE: It was reported on July 31st, ahead of initiating legal proceedings against the exchange, the US Securities and Exchange Commission instructed Coinbase to halt trading in all cryptocurrencies except for Bitcoin.

As the regulatory landscape shifts, it’s wise for investors to consider safeguarding their holdings by moving them from Coinbase into secure cold storage.

While free-market competition is preferable, this reality poses a major risk for crypto exchanges and most tokens. 

Meanwhile, Bitcoin has regulatory clarity as a commodity rather than a security. Bitcoin-only exchanges can confidently sell BTC to their clients without the risk of a regulatory crackdown.

In the end, the old "KISS: Keep It Simple Stupid” adage applies.

Avoid expensive and risky strategies that are likely to lose money. Employ a superior strategy, simply buying Bitcoin from Bitcoin-only companies. 

We’re here to help with that. Head to your Swan Dashboard to smash buy, or sign up below!