Bitcoin (BTC) has become the face of cryptocurrencies over the last few years. It is the largest cryptocurrency by market capitalization and many global leaders have labelled it as the best alternative to fiat or traditional currency.
But is one Bitcoin out of your reach?
Here come altcoins as your path into cryptocurrency. Any cryptocurrency other than Bitcoin is known as an altcoin or alternative coin.
Today, over 18,000 cryptocurrencies are circulating in the market which provides an excellent opportunity for anyone to enter cryptocurrency. If you cannot own Bitcoin, you can invest in altcoins to make money.
Here is everything you need to know about altcoins.
What are Altcoins?
Altcoins can be defined as alternative coins to Bitcoin. In simple words, any cryptocurrency other than Bitcoin is an altcoin.
Some of the popular altcoins include Ethereum, USD Coin, Tether, Polkadot, and more.
Altcoins are second-generation or third-generation cryptocurrencies and so on. They exist on blockchain technology and are secured by cryptography.
The transactions of altcoins are quick and have lower fees as compared to bank transactions. You can send or receive altcoins at any time from anywhere around the globe.
Altcoins offer you freedom from the interference of the bank in the management of your assets. You are the sole owner and manager of your altcoins.
Carl Runefelt, alias, The Moon, is a global crypto leader who is pushing for the mass adoption of cryptocurrency.
Carl says, “We have seen altcoins rally very, very strongly in the last few months. I think we will continue to see that. I think the likely scenario is that we will continue to see altcoins rise before Bitcoin peaks.”
Types of Altcoins
With thousands of cryptocurrencies circulating in the market, it may be difficult for you to choose the type of cryptocurrency that you want to buy.
Experts will tell you that you should go for an altcoin with the best technical specifications, such as quick transactions and better safety protocols.
Listed below are the types of altcoins that you can buy.
As the name suggests, a stablecoin is an altcoin whose value is pegged to an asset like the US dollar or Euro. This helps to keep the price of stablecoins equivalent to the currency.
The popular stablecoins are USD Coin and Tether.
Another form of altcoins is mining-based coins. These are the coins that are mined into circulation by computer networks.
The basic reason to mine these coins is to solve complex mathematical problems. Bitcoin is also a mining-based coin.
A security token can be defined as an altcoin which represents a fractional part of an asset. For example, you may become an owner of a piece of art by buying its security tokens that divide its ownership.
This kind of token allows a traditional asset to be scrutinized more.
Memecoins are the types of altcoins that have grabbed the attention of the public, particularly through the social media presence of celebrities.
These coins have come into form after the social media tweets or posts. You can either earn a lot of money by investing in memecoins or they can fall at any time.
Some of the popular memecoins include RoboApe Token, Dogecoin, and Floki Inu.
Things to Consider Before Buying Altcoins
If there is one word that is mostly associated with cryptocurrency, it is volatility.
Cryptocurrencies are extremely volatile, and your returns can fall at any time.
Carl, on his YouTube channel, The Moon, says, “Sell coins when they hit the top value and purchase another coin, take your profits, and buy other coins as cryptocurrencies are highly volatile. This applies to everything whether it is Bitcoin or any other coin.”
So, when you are buying an altcoin, listed below are some important things that you should consider.
- Sentiments play an important role in cryptocurrency. You should avoid investing in a cryptocurrency based on sentiments and focus on market research.
- Invest in altcoins that you can easily afford to lose. Since altcoins are volatile, you should never invest all your money.
- Cryptocurrency is a game of patience, and you should avoid making decisions based on short-term changes.
- When you are investing in an altcoin, you should focus on its technical capacity. Some altcoins offer low functionality regardless of their higher prices.
The financial markets across the globe are gradually moving toward cryptocurrency adoption.
Cryptocurrency has come a long way since it was launched into the market. With thousands of cryptocurrencies in the market, you can easily enter the crypto world.
You can buy any altcoin to make a lot of money if a Bitcoin is out of your reach. So, it is in your hands whether you want to buy top altcoins now when they are affordable or wait to be left behind by others.