When we heard about cryptocurrencies, the first thought that came to our mind was Bitcoins, but in reality, there are over 6,000 digital currencies other than the ever-popular Bitcoin money. These cryptocurrencies are commonly known as altcoins or “alternatives to Bitcoin.” In simple terms, altcoins are any crypto other than Bitcoin that you can buy on the digital market.
Altcoins have certain similarities to Bitcoin, but they vary in most significant ways. Some altcoins, for example, can build blocks, while others can validate transactions, and just a few altcoins can be utilised as a computing platform. They might also differentiate themselves from Bitcoin by providing new or improved features like smart contracts or low-cost volatility.
Based on the recent survey of CoinMarketCap, altcoins contributed to approximately 60% of the entire cryptocurrency market in November 2021. Since altcoins’ structures are based on Bitcoin, price fluctuations for altcoins tend to follow Bitcoin’s path and movement in the market. However, as the market matures, experts believe that altcoins will pursue a different trajectory that is independent of Bitcoin’s trading path.
What Is the Best Altcoin to Invest In?
Many of the investment risks involved in altcoins are the same as those implicated with Bitcoin. Some of the small altcoins are also technically insolvent. However, well-known altcoins like Ether and XRP are Bitcoin competitors. Other altcoins, including Ethereum, Cardano, and Litecoin, have shown a lot of potential in the market so far. The most well-known altcoins are as follows:
Ethereum (ETH)
Ethereum is a direct competitor to the industry that has made it to the top due to its innovative technology and smart contracts.
The Ethereum blockchain has significantly contributed to Ether, a high-tech counterpart that is currently ranked second only to Bitcoin in market capitalisation. Apart from being referred to as “digital gold,” Ethereum provides a number of contracts that resemble Google wallets, in which the system forgoes or conducts transactions based on actual global developments. To know more about trusted and safe crypto trading platform applications, visit Bitcoin Era to get started.
Cardano (ADA)
Cardano is the third most popular cryptocurrency in the world, having a total supply of 45 billion ADA coins. During the first three months of 2021, it experienced a price increase. The value of the digital coin rose from $0.182 in early January to roughly $1.45 in late February before settling at $1.
Dogecoin (DOGE)
Since its inception in 2013, Dogecoin has gone through a number of experiences. Many detractors predicted that the digital coin would struggle to survive in the aggressive crypto market over time or even rank among the top cryptocurrencies by 2021.
Despite this, Dogecoin’s prices rose from $0.007635 on January 27 to a record peak of $0.07439 on February 8. What’s more remarkable is that the price increase occurred in less than two weeks.
Benefits and Drawbacks of Altcoins
Before diving into a real crypto investment, investors should be well-versed in the benefits and drawbacks of altcoins on the current cryptocurrency network. Below are a few of the most important.
Benefits
- Altcoins can be a potential alternative since they provide a wide variety of solutions to Bitcoin’s shortcomings.
- As more altcoins become generally recognised by conventional institutions, their valuations have skyrocketed.
- Altcoins are quite flexible and offer various investment options for specific digital transactions. If you are planning to invest today, there are many trading platform applications that you can check.
Drawbacks
- In comparison to Bitcoin, altcoin markets are significantly limited.
- Considering the lack of regulation and clear investing criteria, the altcoin market has fewer investors and weaker liquidity.
- In its history, there have been incidents of unsuccessful altcoin investments, which might discourage new investors.
The trading tactics and other issues at hand will determine whether altcoins are smart investments or not. It is normally beneficial for investors to research the market and choose which cryptocurrency will provide the best returns.
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Risk Note:
This article is intended to provide information only and does not imply or recommend any specific investment plan for your investment activity. It is preferable to consult a seasoned professional if you are in doubt about a specific investment. This material is not intended to be an offer, solicitation, or investment advice.
