What is Altcoin? | Best Altcoins 2021
Do you want to start investing in cryptocurrencies? If you want to make your own choices for certain coins, you must know the differences between various cryptocurrencies.
Everyone knows the most important cryptocurrency; Bitcoin. But there are hundreds of other coins that all fall under the term altcoins. In this article you will read all about what these altcoins are, the projects behind them and how to invest in them.
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What is an altcoin?
The term altcoins is fully written out 'alternative coins', which means all cryptocurrencies except Bitcoin. The world of cryptocurrencies began with the emergence of Bitcoin.
It was here that Blockchain technology was first incorporated as a digital currency and it marked the start of cryptocurrency as we know it today. Altcoins were brought to the market by developers who thought up other applications for Blockchain technology or tried to improve upon Bitcoin technology.
It has been more than 12 years since the first Bitcoin was launched and Bitcoin is still the most important cryptocurrency with the largest market value. None of the altcoins have succeeded in taking over the position of market leader.
Given that Bitcoin has a market value of over one trillion euros (1000 Billion), there is plenty of room for projects that are also worth a lot. The most important altcoins at the moment are Ethereum, Cardano and Binance Coin.
How can I start investing in altcoins myself?
If you want to start investing in altcoins yourself you will need an account with an online broker or altcoin exchange. The step-by-step plan below will help you create an account and invest in your first altcoins as quickly as possible.
When the cryptocurrency market was just beginning it was difficult to purchase altcoins. You often had to go to altcoin exchanges where you were not quite sure if it was safe and if your coins were stored safely.
In the meantime it has become a serious market with a number of large websites where you can buy safely.
Step 1: Choose an online broker | Step 4: Find a suitable altcoin |
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Step 1: Choose an online broker
Time to choose the online broker or altcoin exchange where you can create an account so you can start investing as soon as possible. Below you will find an overview of the most popular brokers and crypto exchanges for investing in altcoins.
When choosing a broker, you should look at how this website offers cryptocurrency. At some websites, you can buy and hold the coins yourself, while at other brokers you can only open CFDs with which you speculate on the price of a cryptocurrency.
It is also important to look at what the broker offers. How many altcoins does a broker offer, and are there coins in their offer that you are interested in?
eToro
eToro is one of the largest brokers at the moment and is making waves in the crypto market. It is a broker that offers several altcoins that you can invest in.
eToro is a broker with a wide range of products. You can invest in shares, ETFs, commodities, forex and crypto currencies. You can do this for low commissions. In fact, you pay 0% commission on shares and ETFs.
The fact that the broker is inexpensive is obviously good news, but eToro distinguishes itself primarily by being a social trading network. This means that users can view and copy each other's investments.
Copying someone else's investments or even the entire portfolio is called CopyTrading. With this feature you can benefit from the expertise of experienced investors, even as a beginner.
You can also practice with the free demo function. If you are ready with fictitious money in the demo mode, you can start from a low minimum deposit of $50 (€42).
Start at eToro? Click directly on the green button!
Libertex
Libertex is a broker that has been around for almost 25 years and was therefore active long before the first cryptocurrencies appeared on the market. In the meantime, the broker has built up a wide range of cryptocurrencies.
At Libertex you trade cryptocurrency, but also other products such as shares and ETFs, all as CFDs. This means that you enter into a contract with Libertex which allows you to profit from price changes.
Because you are trading CFDs, you can choose a number of additional options to increase or decrease the risk you take with your investments. For example, you can use leverage to increase the value of your investment without having to use more money to invest.
For example, with a leverage of 1:30, an investment of €100 counts as €3,000. However, this means that as soon as your value drops by €100, your entire investment is gone.
You can invest in dozens of different altcoins at Libertex. These are mainly the coins that rank high in the list of cryptocurrencies with the highest market value.
Want to buy altcoins from one of the best known CFD brokers? Start with Libertex!
Bitvavo
There is also a crypto broker you can turn to. Bitvavo was founded in Amsterdam and has grown very quickly in the few years it has existed.
This is largely due to the simplicity of the platform Bitvavo has developed. Currently, you can buy about 50 different cryptocurrencies, all of which you can easily buy with iDeal.
You can also easily store cryptocurrencies on the platform or send them to another wallet. At this altcoin exchange, you invest in the currency itself.
Want to know everything about this crypto broker? Read it in our review or start right away by creating an account at Bitvavo!
Capital.com
Capital.com is a fast growing broker with offices all over Europe. The broker was only founded in 2016 but is already very popular for CFD enthusiasts.
At this broker you can trade shares, commodities and cryptocurrencies in the form of CFDs. Thus, you do not own the coins themselves when you invest with this broker but enter into contracts to speculate on price changes of certain coins.
Want to know more about this young altcoin exchange? Then read our Capital.com review or go to the website now and create an account.
Binance
The largest crypto exchange in the world is Binance. On this platform, you have the largest selection of altcoins in the world, such as Binance Coin.
For beginners, Binance is more difficult to use because it has become a huge platform with a large number of additional features. This makes this crypto exchange most suitable for investors with extensive knowledge of cryptocurrencies.
At Binance, you can buy cryptocurrency using iDeal or PayPal or place money on your account and trade coins with other investors on the platform.
Curious about the largest crypto exchange in the world? You can read all about it in our review. Register an account at Binance now!
Step 2: Create an account
At most brokers, you create an account in the same way. In this example, we look at creating an account at eToro.
If you go to eToro's website, you can start immediately by entering an E-mail address and password. You get immediate access to the eToro platform via a demo account.
With this demo account you get virtual money with which you can already practice with the platform.
If you want to get started with real money, you have to go through a number of additional steps at each broker. A broker is required to have a copy of your identity document and to let you fill in a questionnaire in which your knowledge of investing is tested.
Step 3: Transferring money to account
As soon as this verification is approved by eToro, you are notified via email. You then have access to a real money account.
It is now time to put money on this account. At eToro, you can use payment methods such as iDeal, PayPal, bank transfer, credit card and more.
The minimum deposit amount at this broker is €100 and you get discounts when you deposit larger amounts at once. If you deposit money into your account via a payment method such as iDeal or PayPal, the money is immediately transferred.
Step 4: Find a suitable altcoin
Do you already have an altcoin in mind that you would like to invest in? Then you can easily look it up by entering the name of the coin in the search bar of your altcoin exchange.
You can also search eToro for a suitable altcoin by filtering on crypto currencies. A list will then appear of all available cryptocurrencies on the eToro platform, together with the price changes over the last day, month and year.
By sorting the coins according to the largest price changes, you can get an idea of the possibilities of altcoins. For example, there are coins that have risen 4000% in value in one year!
Step 5: Purchase the Altcoin
An investment is made by pressing the blue 'trade' button. Decide how much you want to buy of a particular altcoin and trade the currency!
invest cardano libertex
Directly to eToro
You now own the crypto currency! The crypto coins are automatically stored in the online wallet of eToro. You can now in the eToro interface continue to check the price of the coins and thus see how much your altcoins are worth.
When you have made a profit, or for some other reason want to get rid of your crypto's, you can sell your crypto's.
Interesting altcoins for 2021
To give you an idea which altcoins might be a good investment, we look below at interesting altcoins for 2021. We look at the altcoin price and the projects behind certain altcoins to see if they are good investments for this year.
Please note that the cryptocurrency market is very volatile and the coins below may not go up this year.
Uniswap (UNI)
An interesting project that was launched in October 2020 and is already in the top ten in terms of altcoin market cap. The project is already worth more than 25 billion euros, even though the currency has only been available for six months.
The Uniswap project is not actually about the altcoin itself. The value of Uniswap comes entirely from the platform they have developed where you can easily trade tokens with each other.
The Uniswap token itself is used to pay transaction fees on the platform. Want to know more about Uniswap? Please read our article on how you can buy Uniswap the fastest or check the current Uniswap price.
Cardano (ADA)
At the time of writing, this coin is 4th on the list of cryptocurrencies sorted by altcoin market cap. In early 2021, the coin exploded, rising from €0.08 to a whopping €1.18.
If you had invested €2,000 in Cardano at the end of 2020, it would have become worth (€2,000 / €0.08) * €1.18 = €29,500 within three months. It just goes to show what opportunities there are to profit from an altcoin price.
The Cardano price over the past 6 months. Want to research the price of Cardano? Check it on eToro!
Terra (LUNA)
This altcoin price also experienced an incredible rise in early 2021. Terra came on the market back in 2019 but never managed to become worth more than a euro per coin.
That changed completely when the price rose from €0.52 to €17.39 in 3 months. So, if you invest in an altcoin in time, the altcoin price could go up by as much as 33 times!
How to find interesting altcoins?
There are several options for finding interesting altcoins, but it is not easy to find reliable news in the world of cryptocurrencies. Many news websites try to influence the prices of altcoins by not always reporting reliable news about these coins.
The best thing to do is to look in the list of different altcoins on an altcoin exchange and do research on these coins. For each coin you will find a website where the project of this altcoin is explained.
For investors with a lot of technical knowledge it is interesting to look at the whitepaper of an altcoin. A whitepaper describes how the technology behind an altcoin works and what this technology is supposed to be a solution for.
Ultimately, just like investing in stocks, you need to look for the altcoins that you think are undervalued. So when researching, look at what you think a coin should be worth and compare that to the current value of the altcoin.
You can also take a more technical look at altcoin prices or altcoin market caps. By looking at these two with different indicators you can identify any trends in altcoin prices and find the right investment.
Please note that you should not only look at the altcoin price in euros or dollars but also compare the altcoin prices with bitcoin prices. Due to huge increases in the Bitcoin rate, it may just be that the altcoins come along but do not perform as well as Bitcoin.
At eToro you have a great opportunity to invest in altcoins. Create an account easily and start investing!
How risky is investing in altcoins?
As with any investment, you have a big influence on the risk you take with a particular investment. Especially with brokers where you trade in CFDs, you have the choice of a leverage effect, stop-loss or take-profit to influence the risk you take.
Investing in altcoins is still seen by many as a very risky product. This is because it is difficult to estimate how much an altcoin is actually worth, and this actually applies to the entire cryptocurrency market.
For example, there are mainly experienced investors in shares who do not see where the enormous value of these coins comes from. It is therefore difficult to determine what the altcoin market cap should be, because the coins are not tangible and in many cases the application of a coin is not entirely clear.
The big question you should ask yourself when investing in altcoins is how high you consider the probability that the entire cryptocurrency market is in a bubble. If this bubble ever bursts, the altcoins will be the first to go and altcoin prices will collapse.
Many cryptocurrency lovers are also familiar with the phenomenon of the "altcoin season". An altcoin season occurs when altcoin prices significantly outperform Bitcoin over a longer period of time.
Lately, however, Bitcoin prices have been doing so well that altcoin prices have been following the market, but not nearly outperforming Bitcoin.
Advantages and disadvantages of altcoins
Pros
Cons
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Tips before you start investing in altcoins
As you may have read in this article, there is a lot of confusion about altcoins, but there are also huge opportunities with these coins. For novice investors, it is an overwhelming market with hundreds of coins and all their own technology and platform.
Do good research
The most important tip for any investor in altcoins is to do good research on the coin you are investing in. This can include research into the technology behind the altcoin to determine if there is a future in a coin.
But you can also use a broker like eToroeen to make a technical analysis based on the altcoin price or altcoin market cap. Do you see that a particular altcoin is trending upwards? Then this could be a suitable investment.
It should be clear that altcoin prices are extremely volatile. It is possible that an altcoin price will rise, but the cryptocurrency market has also shown in the past ten years that it can reasonably collapse.
Build a diverse portfolio
Therefore always compose a diverse portfolio of different altcoins. By knowing what technological solution an altcoin offers you can also make as much difference as possible.
With a diverse portfolio you will be taking much less risk than if you were to invest in just one altcoin. It is also wise to invest in the mother of cryptocurrencies alongside altcoins.
Altcoins Review: Frequently Asked Questions
Simply put, altcoins are all cryptocurrencies besides Bitcoin. Not every investor agrees with this description because a coin such as Ethereum has also been around for many years and is stable at the top of the cryptocurrency market.
As an investor interested in altcoins, the online broker eToro is the best place to go. Here you can trade dozens of different altcoins.
You always have an influence on the risk you take when investing, but in general you are in an extremely volatile market with high risks. As long as you are aware of this and take into account how much money you invest and how you build a portfolio the risk is well manageable.
It all starts with research into the coins. You can look at the technology behind a coin and determine whether you see a future in it or not. In addition you can perform a technical analysis on the altcoin price or altcoin market cap to identify trends.
Yes, at an online broker such as Libertex you can trade dozens of different altcoins as CFDs. This allows you to leverage up to 30 times. If the altcoin price itself goes up 33 times, every euro you invest could be worth €1,000.
You can choose which altcoin wallet is most suitable for you. You can use the wallet offered by the website where you bought the coins or open another altcoin wallet yourself. This can be an online wallet or a hardware wallet which is completely separated from the internet for added security.
Altcoins: Conclusion
Welcome to the extraordinary world of altcoins! There are huge opportunities for investors in this alternative bitcoin market, but it is not as simple as you might think.
Because in addition to altcoin prices which can go up 33 times, there are also many altcoins which we never hear about again. Projects have gone bankrupt, been hacked or have collapsed for other reasons.
The most important thing about investing in altcoins is that you know you are entering an extremely risky market and that you take this into account. It is also crucial to do your own research into the various altcoins.
Investing in altcoins yourself?
Then open an account at eToro now and buy your first altcoins today.
