Altcoin Season Alert: Bitcoin Alternatives Explained 

• By Paramjit Singh

• 28th June 2024

On the social media platform Twitter, the altcoin buzz is real. People from all corners of the world are discussing altcoin, often with the misconception that it’s a shortcut to wealth. But is this really the case?

Apparently, an altcoin season or altseason comes up when all the other cryptocurrencies besides Bitcoin outperform the latter and offer groundbreaking returns. The altcoin season arrives when there is bullish behaviour in the activity and trading volume of cryptocurrencies alternative to Bitcoin.

What is altcoin? Is the altcoin season over? What strategy should I use to invest in altcoins? Keep on reading to find the answer to these questions.

How Do You Define an Altcoin?

Any cryptocurrency other than Bitcoin (BTC) is called an altcoin. The term became popular when Ethereum was introduced in 2011. It was then that a new cryptocurrency was created, apart from Bitcoin. 

Therefore, Ethereum is an altcoin. Other cryptocurrencies such as Binance Coin, Solana, Cardano, Dogecoin, Toncoin, Tether and Shiba Inu are altcoins.

Decoding the Altcoin Season 

So, when is an altcoin season and how does one identify the beginning of an altcoin season? 

They say don’t put all your eggs in one basket. This is what cryptocurrency investors believe in, too. Bitcoin has proven to be a tangible asset in offering groundbreaking returns. Out of hunger for more, investors began exploring alternative cryptocurrencies to Bitcoin to diversify their investment portfolio and identified altcoins as a golden opportunity!

Belonging to the small to mid-cap markets, these altcoins are more volatile and thus, offer potential gains. 

Is Altcoin Season Over?

The two main indicators of a successful altcoin season are:

• Bitcoin’s dominance in the market
• Altcoin’s price performance

When there’s a major drop in the dominance of Bitcoin in the market, that’s when investors run out to invest in alternative cryptocurrencies, altcoins. Bitcoin hit its record-high around $74,000 in mid-March when there was an increase in the interest from new spot exchange-traded funds.

Fast forward to now, Bitcoin is falling down even below $66,000!

On the other hand, Ethereum’s price has surged 15% in the last month, while altcoins have also experienced a significant drop in their rates.

A basic rule of thumb to detect if the altcoin season exhibits an uptrend is when 75% of the top 50 altcoins perform relatively better than Bitcoin over a period of 3 months. However, only 8 cryptocurrencies have managed to outperform Bitcoin in the period of the last 3 months!

However, the Bitcoin season has apparently started again after a five-month span. There was an uptrend in altcoins at the beginning of January 2024, but it has subsided substantially.

Major Show Stealers in the Altcoin Market

When talking about altcoins, Cardano and Dogecoin are some of the major cryptocurrency performers in the web3 industry. Let’s learn about these two cryptocurrencies in detail:

1. Cardano (ADA)

Cardano is a blockchain platform known for its focus on sustainability, scalability, and interoperability. Founded by Charles Hoskinson, one of Ethereum’s co-founders, Cardano aims to provide a more secure and efficient infrastructure for decentralized applications (dApps) and smart contracts. Key features include its unique consensus algorithm, Ouroboros, which enhances scalability and security. ADA, Cardano’s native cryptocurrency, fuels transactions and operations within its ecosystem.

Benefits and Recent Performance:

• Scalability: Cardano’s architecture allows for scalable and efficient transactions, supporting a wide range of applications.

• Interoperability: It aims to facilitate seamless communication between different blockchain networks.

• Recent Performance: ADA has shown significant growth, gaining attention for its technological advancements and strong community support.

2. Dogecoin (DOGE)

Initially created as a light-hearted meme coin, Dogecoin has evolved into a popular digital currency known for its vibrant community and low transaction fees. Developed by Billy Markus and Jackson Palmer, Dogecoin distinguishes itself with its accessible and user-friendly approach to cryptocurrency.

Benefits and Recent Performance:

• Community Engagement: Dogecoin has a robust community that actively supports charitable causes and adoption efforts.

• Low Fees: Transactions with Dogecoin typically incur minimal fees, making it attractive for everyday transactions.

• Recent Performance: DOGE has experienced periods of significant price volatility, driven by social media trends and celebrity endorsements.

Disclaimer: These are mere suggestions based on the current market sentiments. We do not indulge in offering investment strategies for individual portfolios.

How to Create a Strategy During Altcoin Season

Here’s how you can create a strategic investment for potential altcoin investments:

• Research and Due Diligence: Evaluate the technology, team, and community behind each altcoin.

• Market Analysis: Monitor market trends, including trading volumes and price movements.

• Risk Assessment: Assess the risks associated with each investment, considering factors like regulatory changes and technological vulnerabilities.

How to Mitigate Risks Associated with Altcoins?

You can follow the below-mentioned strategies to eliminate risks associated with investing in altcoins:

• Portfolio Diversification: Spread investments across different altcoins and asset classes to minimize exposure to individual risks.

• Setting Goals: Define investment goals and stick to a well-defined strategy to avoid impulsive decisions.

• Staying Informed: Always ensure that you keep yourself updated about market developments and adjust your strategy accordingly. Don’t forget to put your money where your mouth is!

Final Words

Investing merely in altcoins is a pure gamble in 2024. You cannot forget the primary outperformer, Bitcoin, when trying to diversify your portfolio in the cryptocurrency space. Always play safe to protect yourself from the volatile market.

At Deftsoft, we don’t just observe the trends—we build the technology that powers them. Whether you’re looking to secure your digital assets or tap into the vast potential of altcoins, our custom crypto wallet development services are designed to meet your needs. 

Join hands with the experts for the blockchain revolution. Contact us today to understand how our solutions can enhance your investment strategy and keep you ahead of the curve in the dynamic world of cryptocurrency.

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