What Are Altcoins? Why They're Riskier Than Bitcoin
Altcoins are all cryptocurrencies other than bitcoin. There are thousands of them, and most eventually lose almost all their value. Here are the main types of altcoins and how to assess the risk.
What they are
"Altcoin" is short for "alternative coin." The term covers any cryptocurrency other than bitcoin: Ethereum, Solana, meme coins, and thousands of others.
Types of altcoins
| Type | Example | Key feature |
|---|---|---|
| Native coins of their own blockchains | ETH, SOL | Platforms for apps |
| Stablecoins | USDT, USDC | Pegged to the dollar, not meant to grow |
| Meme coins | DOGE and others | Price is driven by hype |
Why the risk is higher
- Volatility. Altcoins fall and rise more sharply than bitcoin; more in the article on volatility.
- Low liquidity in smaller coins.
- Risk of disappearing: see rug pull.
- Manipulation: see pump and dump.
What to check before buying
- Whether the project has a real use case and an active team.
- Whether the coin trades on major exchanges.
- Whether the ads promise "10x" gains: that's a red flag.
The basics are in the lesson crypto: what it is and how to invest in it, and your first steps are in the article how to buy your first crypto.
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- An altcoin is any coin other than bitcoin.
- Higher risk and volatility, and many projects disappear.
- Check liquidity and the team, and don't trust promises of "10x" gains.
Frequently Asked Questions
Is Ethereum an altcoin?
Technically, yes: anything that isn't bitcoin is called an altcoin. But the largest coins are usually considered separately from small speculative projects.
What is altcoin season?
That's the name for a period when altcoins rise faster than bitcoin. It can't be predicted in advance, and it usually ends with a sharp drop.
How many altcoins should I hold in my portfolio?
That's a personal decision, but crypto is the risky part of a portfolio, and altcoins are the riskiest part of crypto. It makes sense for beginners to limit their share.
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