Rikkei Finance

<p>Because cryptocurrencies have such great financial potential, people are attracted to investing in them. Specifically, altcoins and other cryptocurrencies have received more attention since the cryptocurrency boom. For those who find these terms not so familiar, read our article.</p><h2 id="header-0"><strong>What are altcoins?</strong></h2><p>Any coin that isn&#39;t Bitcoin is referred to as an &#34;altcoin&#34;. The market for cryptocurrencies includes a large portion of altcoins, which are typically made to compete with the market leader, Bitcoin. According to the price-tracking website CoinMarketCap, there are more than 17,000 different kinds of cryptocurrencies as of February 2022. The market capitalization of all cryptocurrencies is made up of around half of Bitcoin and a quarter of Ethereum. The remaining market share, or about 40%, is taken up by altcoins.</p><h2 id="header-1"><strong>Is Ethereum an altcoin?</strong></h2><p>By definition, Ethereum is an altcoin. It’s one of the most popular altcoins in terms of trading volume and total value locked (TVL). However, since Ethereum was the first blockchain to support smart contracts, explaining why Bitcoin and Ethereum are the two most widely used cryptocurrencies worldwide, some investors disagree to include it in the altcoin list.</p><h2 id="header-2"><strong>What are stablecoins?</strong></h2><p>Stablecoins are altcoins that aim to ensure price stability in the cryptocurrency market. Regardless of market volatility, a stablecoin strives to maintain its value constant. For instance, the DAI stablecoin is fixed at $1 to the dollar. As a result, 1 DAI is always worth $1. Technically, the market value of a stablecoin can be linked to any asset. A stablecoin can also be algorithmically connected to another cryptocurrency.</p><h2 id="header-3"><strong>Altcoins vs stablecoins?</strong></h2><h3 id="strong-similarities-strong"><strong>Similarities</strong></h3><p>Stablecoins and altcoins are cryptocurrencies that record and track transactions via the blockchain. They are digital currencies that are exchange-tradable and can be kept in various hot or cold storage crypto wallets.</p><h3 id="strong-differences-strong"><strong>Differences</strong></h3><p>The fundamental distinction between stablecoins and alternative cryptocurrencies is that stablecoins have a fixed value while alternative cryptocurrencies can fluctuate in value.</p><p>On the one hand, like Bitcoin, altcoins are fluctuating in price. The best altcoins have the chance to win a significant market share by enhancing Bitcoin&#39;s original consensus algorithm. Early investors might therefore anticipate high returns on their investments.</p><p>On the other hand, stablecoins offer a reliable investment with a constant value. Stablecoins assist cryptocurrency exchange trading, as well. Instead of outright purchasing bitcoin (or another cryptocurrency) with fiat money, traders frequently convert cash into a stablecoin and then carry out a purchase for another cryptocurrency using the stablecoin. Some investors might decide to keep their money in stablecoins during periods of market turbulence. Stablecoins don&#39;t, however, offer the same potential for price growth as altcoins. Also, many people are doubtful that stablecoin projects can maintain their value in the face of severe market volatility.</p><h2 id="header-4"><strong>When to hold Altcoins?</strong></h2><p>A surprising number of cryptocurrency projects are appearing on the market. Altcoins may be appealing to investors seeking the following characteristics:</p><ul><li>More affordable investments: The two biggest cryptocurrencies, Bitcoin and Ethereum, can be out of reach for some people. Altcoins that have a smaller market cap tend to be more cost-friendly. This more approachable method may be the best way for newbie investors who are overwhelmed by the market to begin their cryptocurrency journey.</li><li>Potential returns: Investing in new or rising assets might lead to quick profits. Investors attracted to high potential returns must keep an eye on the most successful altcoins in order to buy consistently for the highest profits.</li></ul><p>To sum up, an altcoin is any coin that isn’t Bitcoin. Although altcoins are valuable assets for cryptocurrency investors, their prices fluctuate dramatically. An altcoin may provide a 10x return on investment, but it may also crash suddenly. Stablecoins, on the other hand, restrict losses but are not without controversy. Many people are skeptical that prominent stablecoin projects can remain their value during significant market volatility.</p><p><em>For more information, join our Discord community:<a href="https://discord.gg/GM3U44e6PG" rel="noopener noreferrer nofollow"> <u>https://discord.gg/GM3U44e6PG</u></a></em></p><p><em>Disclaimer: The information herein is for educational purposes only and should not be considered financial, investment, or trading advice. Please conduct your own research and due diligence before making investment decisions. You understand that you are using the Information provided at your own risk.</em></p>

What are Altcoins? The key difference between Altcoins & Stablecoins

Table of Contents

RikkeiFinance

Other articles published on Dec 22, 2022

PRODUCT: Swash partners with DataHive DAO to co-launch sIntelligence — the world’s first zero-par...

It's a ‘No Bail’ for SBF

COTI End-of-Year AMA Recap

Host Your First MNApp on BelNet

Japanese Energy Giant TEPCO Power Grid will Mine Bitcoin with Access Energy

Is RSR A Good Investment For 2023?

Join our free newsletter for daily crypto updates!