Cryptocurrency, Bitcoin established its reputation at the top well before any other types of coins were minted on the blockchain. That left other coins, known as “altcoins,” to get in line.
Since then, thousands of new altcoins, or alternative coins, have been created and added into the crypto ecosystem. “Altcoin” refers to any type of cryptocurrency other than Bitcoin. Ethereum is the most popular altcoin, and people use the full name (Ethereum) when talking about the broader blockchain network but Ether (ETH) to discuss the currency itself.
Thousand of altcoin/crypto out there
There are over 16,500 types of cryptocurrencies as of January 2022, according to price-tracking website CoinMarketCap. Bitcoin makes up nearly half of the total crypto market cap, and Ethereum makes up nearly a quarter. Altcoins occupy the remaining market share (roughly 40%).
That means there are literally thousands of other coins being exchanged out there in the metaverse. Let’s take a closer look at what altcoins are and why experts say most investors should take a pass on anything besides Bitcoin and Ethereum. What Are Altcoins? The term “altcoin” is shorthand for “alternative coins” and simply means cryptocurrencies other than Bitcoin. After Bitcoin, the nine most popular cryptocurrencies are as follows: *Ethereum *XRP *Tether *Cardano *Polkadot *Stellar *USD Coin *Dogecoin *Chainlink *Uniswap
Note: This list was last updated on Nov. 30, 2021.
Should You lnvest In Altcoins?
Experts caution that Bitcoin is highly speculative, and altcoins are even more so. Ethereum, the most widely heard-about altcoin, has grown significantly since its 2015 launch, thanks to its smart contract capabilities and the popularity of digitally scarce art known as non-fungible tokens (NFTs). ETH has a market cap of more than $500 billion at the time of writing this article. But don’t let the popularity of altcoins result in fear-of-missing-out (FOMO). Even crypto evangelists view the rise of cryptocurrency with some healthy skepticism.
“Everyone always looks at other people making money and they’re like, ‘what about me?’” says Nelson Merchan, CEO of blockchain events firm Light Node Media “But I think that the beauty of what crypto really allows us to do is reassess our relationship with money.”
Don’t view crypto as a fast cash-grab, says Merchan. Instead, see it as an opportunity to learn about a new asset class without putting everything on the line. Before you actually invest in smaller altcoins like Tether, Cardano, and others, start by learning about how they work.
Manyexperts say crypto is here to stay — especially now that the Biden administration has made clear its desire to regulate it — and blockchain technology continues to hold potential across many different industries.
So while some speculative investors with a high risk tolerance attempt to time the altcoin market and get in while prices are low, experts suggest most investors keep their crypto holdings to under 5% of your portfolio, and stick with the two most well-established coins — Bitcoin and Ethereum. And that’s only if you’ve already built an emergency fund and know crypto investments won’t get in the way of long-term goals like paying down high-interest debt and investing in low-cost index funds.
#Don’t change your entire approach overnight. Assess your risk tolerance, time horizon, and financial goals. If you’re interested in crypto but not ready to buy and hold it directly, there are several ways to invest in crypto through passive means without actually buying any coin.
