What are Altcoins? The Drivers behind the Altcoins Rise

Last Updated on December 11, 2024 by Diana Kelley

With the altcoins rise and the question of how high will Bitcoin go, the current bullish trend in Bitcoin is driving excitement across the market, and altcoins are following suit. As Bitcoin’s dominance grows, many altcoins are showing signs of growth, opening up new opportunities for investors. This article explores how Bitcoin’s rise impacts altcoins, how to navigate these changes, and how you can leverage your assets in a way that benefits you — without letting go of your crypto holdings.

What are Altcoins

Altcoins, short for “alternative coins,” refer to any cryptocurrency that is not Bitcoin (BTC). Since Bitcoin’s inception in 2009, thousands of altcoins have emerged, each with unique features and purposes. Altcoins can serve various functions, from enabling smart contracts to providing stable value through pegging to fiat currencies. Notable examples of altcoins include Ethereum (ETH), which introduced smart contracts, and Ripple (XRP), designed for fast and low-cost international payments. For privacy-focused users, you can get Monero (XMR), a coin that ensures transaction confidentiality, or use Kaspa wallet on CoinRabbit to store and manage your Kaspa coins securely, offering you full control over your crypto assets.

What are the different types of Altcoins

Altcoins can be categorized into several types based on their functionality and underlying technology:

1. Utility tokens: A token provides users with access to a product or service within a specific ecosystem. For example, Binance Coin (BNB) is used to pay fees on the Binance exchange, while Chainlink (LINK) helps smart contracts connect to real-world data.
2. Stablecoins: are pegged to stable assets like fiat currencies or gold in order to minimize price volatility. For instance, in the crypto market, USD Coin (USDC) is a prominent example, often used to facilitate trading and maintain value stability.
3. Privacy coins: To maintain user confidentiality, privacy coins like Monero (XMR) and Dash (DASH) obscure transaction details, offering enhanced privacy. If you’re wondering what is Jasmy coin, it represents a token in the IoT sector, providing data storage and security solutions, and is another example of how altcoins are expanding beyond traditional use cases.
4. Security tokens: Often regulated, security tokens represent ownership in real-world assets such as stocks, bonds, and real estate.
5. Governance tokens: Holders of these tokens have voting rights and influence over a blockchain project’s development.
6. Platform tokens: The most prominent example is Ethereum (ETH), which is often classified as a major cryptocurrency rather than an altcoin because it facilitates the creation of decentralized apps (dApps) and smart contracts.
7. Meme coins: Originally intended as jokes, meme coins like Dogecoin (DOGE) and Kishu Inu (KISHU) have gained significant popularity and market capitalization.
8. DeFi tokens: Financial services protocols use DeFi tokens, or Decentralised Finance tokens.

Pros and cons of altcoins

Pros:

• Diversity: Altcoins provide a range of investment options beyond Bitcoin, catering to various risk appetites and investment strategies.
• Innovation: Many altcoins introduce new technologies and solutions, such as decentralized finance (DeFi) and non-fungible tokens (NFTs), which can lead to substantial growth.
• Potential for High Returns: Some altcoins have experienced explosive growth, offering investors the chance for significant profits.

Cons:

• Volatility: Altcoins can be more volatile than Bitcoin, leading to higher risks.
• Regulatory Risks: The regulatory landscape for cryptocurrencies is still evolving, and altcoins may face scrutiny that could impact their value.
• Market Saturation: With over 10,000 altcoins available, distinguishing between viable projects and those that may fail can be challenging.

The Importance of Altcoins in a Balanced Portfolio

Incorporating altcoins into a cryptocurrency portfolio can enhance diversification. While Bitcoin often dominates the market, altcoins can offer unique opportunities for growth and investment. They may respond differently to market trends, potentially reducing overall portfolio risk. Additionally, some altcoins have shown significant price appreciation during bullish market phases, especially when altcoins rise, making them attractive for investors seeking higher returns.

Where to buy Altcoins

Altcoins can be traded on various exchanges, including Binance, Coinbase, and Bybit. For crypto lending, CoinRabbit provides flexible loan options with a variety of altcoins, such as ADA loan, allowing users to take advantage of unlimited loan terms tailored to their needs.

How Bitcoin’s Growth Fuels the Altcoins Rise

With Bitcoin‘s dominance growing, we often witness a phase where altcoins rise and market prices surge. As investors see Bitcoin performing well, their confidence in the entire crypto market grows. This leads them to explore other cryptocurrencies, known as altcoins, which can drive up their prices.

Additionally, Bitcoin’s success attracts new investors who want to get involved in cryptocurrency. Many of these newcomers choose to diversify their investments by including altcoins in their portfolios. This creates a positive cycle: as Bitcoin strengthens, it boosts interest in altcoins, leading to higher prices for them. In short, when Bitcoin does well, it often brings attention and excitement to altcoins, creating more opportunities in the crypto market.

Leveraging Altcoins for Liquidity

Since we are seeing an altcoin rise in the market, it presents an excellent opportunity to leverage your altcoins for liquidity. Instead of selling your assets to unlock cash, you can use your altcoins as collateral for a crypto loan. This allows you to keep your crypto investments intact while gaining access to immediate funds. The advantage is that you can capitalize on the growth of your altcoins without parting with them, giving you the flexibility to take advantage of other opportunities in the market.

At CoinRabbit, we make it easy to secure a loan using your altcoins as collateral. Whether you’re holding Ethereum, Litecoin, or any other altcoin, our platform offers a simple and flexible way to access liquidity without selling your assets. This is a great option, especially during periods of rising altcoin prices, as it allows you to benefit from the market’s momentum while maintaining control over your investments.

Getting a Loan with Altcoins: Step-by-Step Guide

Navigating the process of altcoin loans is seamless and straightforward. Follow these steps:

1. Follow our lending link to get started.
2. Make sure your loan is set up with your selected altcoin as collateral, and then confirm it with your phone number as the main contact channel and your payout stablecoin address.
3. Once we receive your collateral, you will receive the loan amount on your payout address without any delays or additional checks.
4. Enjoy!

Bottom line

Altcoins offer valuable opportunities for growth and diversification in your cryptocurrency portfolio. As their prices rise, you can leverage your altcoins for liquidity without selling them, unlocking cash through crypto loans. CoinRabbit makes it simple to use your altcoins as collateral, giving you access to immediate funds while still benefiting from their potential growth. This flexible approach helps you capitalize on market opportunities while keeping your investments intact, especially during periods when altcoins rise in value.