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Crypto coins and tokens other than Bitcoin (BTC) are “Altcoins.” The term is a combination of “alternative” and “coin”, which means an alternative coin to Bitcoin. There are more than 20,000 coins and tokens in the market, with Ethereum or Ether (ETH) being the largest altcoin.
Most altcoins are copies of Bitcoin and Ethereum created through hard forks or on the ERC-20 standard. While they may be similar to Bitcoin or Ethereum, the use cases are completely different.
There are several types of altcoins such as stablecoins, DeFi tokens, meme coins, utility tokens, governance tokens, etc. According to CoinMarketCap, the top 10 alt coins as per market cap are Ethereum (ETH), Tether (USDT) stablecoin, USD Coin (USDC) stablecoin, Binance’s BNB, Ripple’s XRP, Binance USD (BUSD) stablecoin, Cardano (ADA), Solana (SOL), Polkadot (DOT), and Dogecoin (DOGE).
Similar to Bitcoin, which has a max supply of 21 million, some such as BNB, XRP, ADA, etc. also have a maximum supply. Some altcoins have a burning mechanism in which the tokens are destroyed by sending them to a burn address.
The altcoin market has a total market cap of more than $500 billion. In November 2021, the altcoin market cap touched an ATH of almost $1.6 trillion, with the total market cap rising to $2.9 trillion. In fact, the price of most coins moves with Bitcoin and Ethereum price actions.
The dominance of altcoins has increased immensely since 2017. Ethereum has almost half the market dominance of Bitcoin.
Altcoins are often considered a better option for investing. With different use cases and structures, people continue to make good fortune by investing in these alternative coins. Generally, investing in top coins or tokens backed by crypto influencers is a better option. some of the best altcoins include Ethereum, XRP, Dogecoin, Shiba Inu, Polygon (MATIC), Cardano (ADA), BNB, FTX Token, etc.
More than 600 altcoins exist in the crypto market today. So, you can infer your choices that will make your trading profitable and more instant. As an investor, you can quickly take a picture, determine the returns, guess the acceptability of the coin, and anticipate the competitive advantages of the virtual currency you are trading with – all at once.
As the concept of altcoins came after the success of bitcoin’, these virtual coins are more advanced in features. Not only are the altcoins advanced, but they also win the technicalities of being more secure and better in transactional speeds compared to bitcoin.
Price changes are low in the case of altcoins. However, it is often observed that whenever there is fluctuation in the price of bitcoin, there is automatically a fluctuation in the altcoins also. Even if the instability is high, it does not always indicate that your altcoin price will decrease.
So, trading and investing with altcoins is a safer and secure option as these can be considered stable.
Trading is far easy with altcoins. Besides, there is comparatively less competition for altcoins in the market. It is always recommended to check the volume of who transacts with a particular altcoin, as it gives you an idea of the time it can take to gain.
Bitcoin dominates the crypto market as it has a promising value with a better Return on Investment (ROI). Some of the disadvantages of using altcoins include the following:
Now, thousands of altcoins are circulating in the market. And there are many of which people are not even aware of! For example, before the name “Omnicron” struck the market, few people had heard of a cryptocurrency with an identical name. This makes it difficult for people to diversify their portfolios.
Altcoins need more acceptance from the people in the crypto industry. Investors usually pick only those which have gained a lot of popularity. This makes altcoins more vulnerable. For instance, young investors or people new to the crypto world hesitate to accept the new altcoins as they may involve risk.
There is no sort of security in case you lose. The crypto market can cost you all your money if you are not an experienced trader, as guesswork should not be your primary focus while attempting to earn from cryptocurrency. In addition, the market cap value of altcoins is constantly lower than bitcoin, indicating lower returns.
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