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Views: The name “altcoin” comes from the combination of the words “alternative” and “coin”. It is an asset that is not bitcoin, but is a cryptocurrency. Altcoins can have different functions and purposes, from improving blockchain technology to providing specific services. With the emergence of bitcoin in 2009, alternative cryptocurrencies began to be developed in order to solve certain problems or fulfill needs that were not fully covered by the first cryptocurrency representative.
Types of altcoins
From the birth of Bitcoin until today, an incredible number of cryptocurrencies have been created. Each of the tokens belongs to a certain type, and each type carries some purpose or meaning behind it.
Altcoins can be classified into several categories depending on their purpose and technology.
Tokens
Tokens are cryptocurrencies that are usually powered by existing blockchains such as Ethereum. Most cryptocurrencies fall into this category and they can be used for a variety of purposes.
Utility tokens
Utility tokens give users access to products or services that a project offers. An example is the Binance Coin (BNB) token, which is used to reduce commissions on the Binance platform.
Security Tokens
Security tokens are digital assets backed by real assets or shares. They are governed by securities laws and provide their holders with certain rights, such as the right to dividends.
Management tokens
Management tokens give their holders a say in the management of a project. For example, the Uniswap token (UNI) allows holders to vote on protocol changes.
Stablecoins
Stablecoins are cryptocurrencies that are tied to a stable asset, such as the US dollar or gold. This helps avoid the high volatility inherent in many other cryptocurrencies. Examples of stablecoins include Tether (USDT), USD Coin (USDC).
Memcoins
Memcoins are cryptocurrencies created as a joke or meme. They often quickly become popular through viral marketing and communities. Examples of memcoins include Dogecoin and Shiba Inu.
Forks
Forks are changes to the blockchain code that can lead to the creation of a new cryptocurrency.
Softforks
Softforks are reversible changes that do not make the blockchain incompatible with previous versions. They are often used to introduce new features.
Hardforks
Hardforks are irreversible changes that create a new version of the blockchain that is incompatible with the previous one. For example, Bitcoin Cash came about as a result of the Bitcoin hardfork.
Non-Futurable Tokens (NFTs)
NFTs are unique digital assets that represent ownership of a specific object, such as art or gaming items. They run on blockchain technology and have unique identifiers.
Altseason - what is it and what indicates its beginning?
Altcoin is a period when altcoins show a significant price increase compared to bitcoin. Usually, the alt season begins when bitcoin capitalization reaches its peak and investors start shifting their funds to riskier assets - altcoins. Signs of the beginning of the altcoin season can be:
An increase in the trading volume of altcoins.
A steady rise in the price of altcoins compared to bitcoin.
Increased public and media interest.
A decrease in bitcoin's dominance.
When should you start buying altcoins?
You should buy altcoins when you are confident in their prospects and you are prepared for the risks associated with investing in cryptocurrency. There is no exact advice about buying and selling and there is no such thing as buying and selling (unless it's insider information). It is recommended to keep an eye on:
Market trends.
Major news and project updates.
Analysis of price charts.
Vertical volumes.
Bitcoin trend.
What criteria to use to evaluate altcoins before buying them
There are several key factors to evaluate before buying altcoins:
Technology: Find out what technologies the project uses and how they address the current scaling challenges of the blockchain and cryptocurrencies in general.
Team: Evaluate the development team and their experience in the industry. Ideally explore the team's social networks, who the project's investors are, and what coins they have invested in yet.
Community: Community activity and user support can be indicators of a project's success.
Transparency: Assess how openly the project shares information about its development and finances.
Market: Research the market in which the project operates and its competition.
Where to buy altcoins
Altcoins can be purchased on various cryptocurrency exchanges. The most popular platforms are:
Binance: One of the largest crypto exchanges, offers many pairs for trading.
Bybit: The second largest exchange, is the largest in the CIS segment.
OKX: Known for its high level of security
BingX: New projects are constantly being listed on the platform.
Gate.io: An exchange that has been tested on the distance and can be trusted. And which also hosts daily listings of new coins
Pros and cons of altcoins
Pros
Diversity: A wide range of projects with different goals and technologies.
Growth Potential: Altcoins can provide opportunities for significant returns.
Innovation: Many altcoins offer new technologies and solutions to existing problems.
Cons
Volatility: Altcoins are subject to high price fluctuations.
Risks: High risk of fraud and unsuitable projects.
Lack of regulation: Many altcoins are outside of strict regulation, which can lead to problems.
What is the future of altcoins
The future of altcoins remains uncertain, but many experts suggest that as technology advances and interest in cryptocurrencies grows, altcoins will continue to have an important place in the market. The development of new technologies and their application in various fields (e.g. finance, art, gaming) may also contribute to the price and quantity of altcoins.
As of today, the cryptocurrency market is not experiencing the sweetest of times. Bitcoin made a long-awaited update of its all-time high in early 2024, and the euphoria that everyone was waiting for never happened.
Bitcoin's dominance is currently at a value of 57.30%. And also the trust of cryptocommunity users is mostly focused on the main cryptocurrency and the main altcoin - Efirium. Otherwise, most of the altcoins are subject to strong risks due to their questionable importance for the crypto world and unstable macroeconomic environment in the world.
Daily bitcoin domination chart
Where and how best to store altcoins
There are several ways to store altcoins:
Cryptocurrency wallets: These are software or hardware devices for securely storing cryptocurrencies. Hardware wallets (like Ledger or Trezor) provide a high level of security, while software wallets (Trust Wallet, MetaMask may be more convenient for daily use.
Exchange wallets: While it is convenient to store cryptocurrency on an exchange, it is less secure as they can be prone to hacker attacks. It is recommended to minimize the amount of funds on exchanges.
Conclusion
Altcoins represent an important part of the cryptocurrency market, offering investors a wide range of opportunities for both earning and developing the crypto world as a whole. However, as with any investment, it is necessary to thoroughly research and assess the risks before making decisions.
To clearly understand which cryptocurrency project or sector is worth investing in, it is necessary to research all sectors and most projects. This is necessary for a more detailed understanding of what the crypto market needs and what is a passing product.
With the chosen project to invest in, Veles bots will be able to dial in a position with maximum potential for a profit. Wide order grids and a diverse list of tools for trading give users the opportunity to trade with any trading strategy.
Frequently Asked Questions
1. How to pick altcoins to invest in?
You need to understand which cryptocurrency sector you are interested in and which you truly believe in. Remember that any investment involves risk and the basis for a financial decision should not be based solely on faith.
2. How can I make money from altcoins?
The most publicly available way is by investing. In addition, you can participate in the activity of the project and earn airdrop. This method is suitable for those who do not want to risk their funds, but believe in the project. The most productive method is trading. With the help of the Veles bot creation platform, you can customize the bot for any strategy and check all settings on backtests before launching it. This method will save a fair amount of money, nerves and your time.
3. How does bitcoin dominance affect the price of altcoins?
Bitcoin dominance is a measure of the amount of money in relation to the entire cryptocurrency market. If the dominance is too high, it means that the main money in the crypto is centered on bitcoin. For this reason, altcoin growth is impossible because there is no money in the coin to grow.
