You might have some ideas about real version bitcoin, which is the first crypto coin that has gained a huge popularity. But there are other crypto currencies and coins available, which are known as Altcoins. It means alternative coins, and apart from the bitcoin, all coins are known as Altcoins. For example, Ethereum is the second largest crypto, which is also an Altcoins.
Nowadays, there are more than seventeen thousand cryptocurrencies available in the market, and bitcoin has covered the half of the total crypto market. ETH, the second largest cryptocurrency has occupied nearly a quarter of the market, and Altcoins occupied the rest of the market. Altcoins means alternative coins and you can find many Altcoins in the crypto ecosystem, such as Ethereum, Tether, XRP, Polkadot, Cardano, Stellar, Dogecoin, USD Coin, Uniswap and Chainlink.
Is it better to invest in Altcoins?
Altcoins are similar to bitcoin in the case of volatility and it is hard to speculate the price of such coins. ETH was launched as non-fungible tokens and the market capitalization of ETH is almost $500 billion. But, do not invest your funds on Altcoins with FOMO. People are investing their funds on crypto and you can also try your luck. Consider it one of the prime reasons that can lead you to a huge loss. Crypto or Altcoins is not a solution that can give you a huge return in a short term and you should not cash out your Altcoins on a regular basis. It is true that you can deal with such Altcoins as a daily trader but you need to pay a transaction fee for withdrawing your funds. In this case, holding such coins for a longer period of time can give you the best return.
Biden, the President of USA has declared that his government will try to regulate the crypto and investors can pay their taxes by adding such digital currencies as assets in their income tax file. So, there will be a set of regulations implemented by the government and more Altcoins will be launched in future to grab the market. But, to reduce the risk of loss, you must invest your surplus funds on Altcoins and you should invest maximum 5% of your portfolio on Altcoins. How would you reduce your risk? If you invest your funds on bitcoin and the price of such coins will fall then you will lose your funds. In this case, adding such Altcoins to your portfolio can keep your funds safe and you can earn from such Altcoins, even if the price of bitcoin has crashed down.
Altcoin Types – Available in Market
There are different types of Altcoins available and you should know about their nature before you invest your funds. Here, you can find such details:
- Stablecoins – It is less volatile than bitcoin because most of these coins are linked with fiat currency. Apart from the dollar, stablecoins can be linked with the metals and assets. Tether is a popular stablecoin and people can use this coin for their daily transactions. For example, you can use such stablecoins for buying goods and services. These coins are regulated by US the government of US..
- Memecoins – It is similar to NFTs, which are brought up by the influencers and social media followers. Miss Teen Crypto, Randi Hipped has introduced an avatar named Shiba Inu Dog, and it was linked with DOGE or dogecoin. Initially, it was treated as a joke circulated on social media, but later it was capped market capitalization of $30 billion. But these coins are riskier than bitcoin because the value of these coins is based on their popularity on social media platforms.
- Utility Tokens – Non-fungible tokens like digital art and mints can be treated as utility tokens. Apart from that, you can find Altcoins like Governance tokens, which are based on the blockchain polls. These tokens allow users to participate the blockchain ecosystems and it is related to trading and lending methods of crypto currencies.
Apart from that, you can find many Altcoins in the market and you must do some research before you invest your funds. You can try Bitcoin Era in this regard, where you can invest your funds on different types of digital assets.