Understanding Altcoin Market Capitalization Trends and Patterns
Understanding Altcoin market capitalization is a key metric for cryptocurrency landscape. Bitcoin may be the cryptocurrency with the most extended history and the largest market presence, but it is by no means the only one.
Let’s take a more in-depth look at alternative cryptocurrencies and all you need to know about them. Bitcoin is the cryptocurrency that has been around the longest, has the most solid foundation, and is consequently the most widely used.
On the other hand, it is common knowledge that Bitcoin is just one of several cryptocurrencies now in circulation.
The most frequent name for these digital currencies is “altcoins,” which is short for “alternative cryptocurrencies.”
In this article we will cover all you need to know about altcoins. Including an explanation of what they are and a look at some of the more popular ones. Moreover, the hazards associated with them, and an overall summary of the information.
Understanding Altcoin Market Capitalization: Transitioned and Contextualized
The phrase “alternative cryptocurrency (coin)” is what’s meant to be abbreviated when referring to “altcoin.” Understanding Altcoin Market Capitalization, it focuses on cryptocurrencies other than Bitcoin and discusses them all.
In fact, most of these cryptocurrencies were created to compete with Bitcoin and offer features that the dominant cryptocurrency does not currently have.
Matter of fact is that each one of them uniquely exhibits at least one quality of the technology behind bitcoin.
Some alternative cryptocurrencies include novel consensus techniques, while others enhance transaction processing, scalability, speed, and other aspects of the cryptocurrency ecosystem, like token distribution methods.
Even though the cryptocurrency market has only been around for a relatively short period, tens of thousands of different altcoins have already been created.
Understanding Altcoin Market Capitalization, when this article was written, the prominent data aggregator known as CoinMarketCap revealed that there are 8,200 different cryptocurrencies listed.
This comes after several ‘dead’ cryptocurrencies no longer traded were steadily removed from exchange listings over many years. The majority of these cryptocurrencies have a rather limited life cycle.
And the vast majority of them do not have any real-world application or any value that is intrinsic to them. Understanding Altcoin Market Capitalization, the hazards section is where we’ll go into additional detail on this topic.
A Concise Overview of the History of Alternative Coins, Beginnings to Present Day
The Bitcoin network was activated in 2009, but Namecoin was the first alternative cryptocurrency (NMC).
In fact, 2011 was the year that saw the birth of the cryptocurrency known as Namecoin, whose primary purpose was to facilitate the decentralization of online identities to make it more difficult to impose and enforce censorship.
You had to be wondering what has become of Namecoin in recent times.
When this article was written, NMC was being traded on a few exchanges that were not particularly well known.
It has little value, and the trading volume is not substantial. Despite this, the landscape of alternative cryptocurrencies has seen significant shifts over the previous decade.
Let’s look at what the top-ranked cryptocurrency looked like in 2014, 2017, and 2021. (present time of this writing).
2014 – A Different Landscape
Those who were not active participants in the cryptocurrency market in 2014 will likely be taken aback when they see what the most prominent cryptocurrencies looked like at that time.
Bitcoin came first, which is not surprising. Ripple’s native cryptocurrency, XRP, came in second, followed by Litecoin (LTC), developed by Charlie Lee and sometimes referred to as “the silver to Bitcoin’s when referred to as gold.” XRP was the second cryptocurrency to be launched after Bitcoin.
This is the point at which a significant shift in the circumstances begins.
Following it on the list were other cryptocurrencies such as Peercoin, the well-known meme coin Dogecoin, Mastercoin, Namecoin, ProtoShares, Primecoin, etc.
These are all cryptocurrencies that are now very far away from the top spots, and some of them do not even exist.
2017: The Year That Ethereum Began to Join the Party
The figure from 2017 demonstrates how rapidly the cryptocurrency ecosystem is evolving.
There are very no currencies that were in circulation in 2014 and managed to maintain their value through to 2017, which was a pivotal year in the annals of cryptocurrency history, mainly because Bitcoin’s December price peaked at close to $20,000 at its highest point.
Instead, new coins were introduced into the market that far surpassed their value.
Ethereum had already taken off, Bitcoin Cash (BCH) had been formed through a fork of the original Bitcoin network, and privacy-oriented cryptocurrencies like DASH and Monero had also been rising. Bitcoin Cash (BCH) was produced through a split of the original Bitcoin network.
2021: What Have We Learned About The Future?
Understanding altcoin market capitalization is essential for investors and traders looking to gain insights into the relative size and value of different cryptocurrencies in the market. The bitcoin industry has seen significant recent development, surpassing $1 trillion in market capitalization.
This milestone demonstrates the enduring presence and growing popularity of cryptocurrencies. Prominent cryptocurrencies in 2021 share similarities with those in 2017, but much has changed.
Ethereum remains the second most popular cryptocurrency, followed by Tether’s USDT stablecoin. Polkadot, Stellar, and Chainlink’s LINK have emerged as newcomers to the top 10.
The top 10 cryptocurrencies in 2021 are set to make an impact. Bitcoin has consistently dominated the market capitalization of the cryptocurrency industry.
It has maintained the largest market share compared to other cryptocurrencies. Ethereum came close to challenging Bitcoin’s dominance in June 2017.
This event sparked discussions of a potential “flipping” of dominance. On June 19, 2017, BTC represented 37.8% of the market, while ETH reached 31.17%.
Understanding altcoin market capitalization for informed cryptocurrency analysis.
ETH’s relative supremacy peaked at that point and hasn’t reached similar levels since. The enduring factor throughout cryptocurrency history has been Bitcoin’s market dominance.
No other cryptocurrency has held this position at any time. In June 2017, Ethereum neared Bitcoin’s market share, igniting “flipping” conversations. However, BTC has consistently maintained its dominance.
The chart reveals Bitcoin’s market share compared to the entire cryptocurrency market. Bitcoin’s position has remained consistently strong. Ethereum’s closest challenge to Bitcoin’s dominance occurred in June 2017.
At that time, ETH reached its highest relative share, but hasn’t reached that level since. The cryptocurrency market has evolved significantly, but Bitcoin’s dominance persists.
The enduring presence of Bitcoin highlights its significance in the industry. Market fluctuations and developments continue to shape the cryptocurrency landscape.
The growth and popularity of cryptocurrencies suggest a promising future ahead. Understanding the historical context of market capitalization provides valuable insights.
The Beginners Guide to Cryptocurrency provides an accessible introduction to digital currencies, helping newcomers understand this innovative financial technology.
The Most Common Alternative Coins And What They Are Used For
We have selected a few of the alternative cryptocurrencies that are now the most widely used.
These cryptocurrencies have been around for a while and have large communities of supporters behind them.
Even though Tether’s USDT is theoretically an alternative cryptocurrency, we will not be using it. On the other hand, it is a cryptocurrency that is 1:1 correlated to the USD and does not operate similarly to other alternative cryptocurrencies.
Ethereum (ETH)
Understanding altcoin market capitalization is crucial in assessing Ethereum’s position in the market. Ethereum distinguishes itself from Bitcoin by serving as a platform for decentralized applications.
Smart contracts are at the core of Ethereum’s functionality, ensuring automatic execution of agreed-upon conditions. Unlike traditional contracts, smart contracts eliminate the possibility of failure when conditions are met.
Decentralized applications built on Ethereum’s platform are governed by protocols, not central authorities. These applications aim to provide enhanced security and transparency compared to conventional ones.
The native token of the Ethereum network is denoted by the symbol ETH. Ethereum currently operates on a Proof-of-Work consensus mechanism, similar to Bitcoin.
However, Ethereum is transitioning to Proof of Stake with the introduction of Ethereum 2.0. The Beacon Chain, marking Phase 0 of ETH 2.0, has already been launched.
This transition to Proof of Stake is a significant milestone for Ethereum’s future development. Understanding altcoin market capitalization sheds light on Ethereum’s progress in this transition.
Ethereum 2.0 aims to improve scalability, security, and energy efficiency of the network. As Ethereum continues to evolve, altcoin market capitalization provides insights into its growth potential.
Monitoring Ethereum’s altcoin market capitalization helps investors gauge its market presence and value proposition.
Ripple (XRP)
Understanding altcoin market capitalization provides insights into Ripple’s XRP cryptocurrency. Ripple Labs is the organization behind the creation of the XRP cryptocurrency.
XRP has historically maintained a steady market capitalization among cryptocurrencies. The adoption of XRP by banks and financial institutions could enable faster and more secure transactions.
Transferring XRP typically completes within seconds, outperforming traditional transaction methods. In 2020, the United States Securities and Exchange Commission (SEC) filed a complaint against Ripple Labs.
The SEC alleges that XRP qualifies as a security and accuses Ripple Labs of an unregistered securities offering. The complaint’s total value is stated to be $1.3 billion.
Following the SEC complaint, the market value of XRP dropped by 70 percent. The future of XRP remains uncertain due to the ongoing legal proceedings.
Understanding altcoin market capitalization sheds light on XRP’s market presence and performance. XRP’s market capitalization reflects its position among other altcoins in the cryptocurrency market.
Monitoring XRP’s market capitalization provides insights into investor sentiment and market trends. Regulatory actions and legal challenges can significantly impact altcoin market capitalization.
Keeping track of XRP’s market capitalization helps investors assess the potential risks and opportunities associated with the cryptocurrency.
Litecoin (LTC)
Understanding altcoin market capitalization sheds light on the similarities between LTC and BTC. Litecoin, initiated by Charlie Lee in 2011, was intended as the “lite version of Bitcoin.”
Both Litecoin (LTC) and Bitcoin (BTC) utilize the Proof of Work consensus mechanism. Bitcoin’s design ensures a maximum circulation of 21 million BTC.
In contrast, the maximum number of Litecoins (LTC) that can be owned is set at 84 million. Bitcoin employs the SHA-256 hashing method, a time-tested approach.
Litecoin, on the other hand, utilizes the more recent Scrypt hashing technique. Understanding altcoin market capitalization reveals the distinctive features of LTC and BTC.
The differences in total coin supply and hashing methods contribute to the uniqueness of LTC and BTC. LTC’s higher maximum supply allows for broader distribution and potential wider adoption.
BTC’s limited supply contributes to its perceived scarcity and store of value properties. Monitoring the altcoin market capitalization of LTC and BTC provides insights into their respective market presence.
LTC and BTC’s market capitalization reflects their relative size and popularity among altcoins. Changes in LTC and BTC’s market capitalization can indicate shifts in investor sentiment and market trends.
Understanding altcoin market capitalization assists investors in assessing the potential risks and opportunities associated with LTC and BTC.
TRON (TRX)
Understanding altcoin market capitalization provides insights into TRON’s creation by the TRON Foundation. TRON aims to establish a decentralized platform for global digital content entertainment.
The platform incorporates blockchain technology, distributed storage, and content sharing features. TRX serves as TRON’s native cryptocurrency, spearheaded by Chinese entrepreneur Justin Sun.
Justin Sun positions TRON as a competitor to Ethereum, emphasizing its transaction processing capacity and other attributes. However, TRON currently lags behind Ethereum in terms of usage and development.
Monitoring altcoin market capitalization sheds light on TRON’s market presence and potential growth. TRX’s market capitalization reflects its relative size and popularity among altcoins.
TRON’s journey to compete with Ethereum requires further advancements in usage and development. Understanding altcoin market capitalization helps investors assess the potential of TRON as a competitor.
TRON’s success in establishing a decentralized content entertainment system would strengthen its market position. TRON’s distributed storage technology offers an efficient and cost-effective solution for sharing digital content.
Monitoring TRON’s altcoin market capitalization provides insights into market sentiment and trends. TRON’s growth trajectory will determine its ability to compete with Ethereum.
Understanding altcoin market capitalization assists investors in evaluating the risks and opportunities associated with TRON.
Polkadot (DOT)
Understanding altcoin market capitalization reveals Polkadot’s role as a rival to Ethereum. Polkadot is a relatively young blockchain-based platform with unique features and capabilities.
It enables the transfer of data and assets beyond tokens across multiple blockchains. Polkadot’s scalability and Substrate foundation allow users to create customized blockchains.
The platform boasts a well-developed governance framework, giving stakeholders a voice. Polkadot has gained significant popularity and witnessed widespread adoption in recent years.
The native cryptocurrency of Polkadot is the DOT token. DOT has achieved a top 10 ranking in terms of market capitalization among cryptocurrencies.
Numerous projects are now being developed on top of the Polkadot blockchain. Monitoring altcoin market capitalization provides insights into Polkadot’s market presence.
The market capitalization of DOT reflects its relative size and popularity among altcoins. Polkadot’s unique features and governance framework contribute to its appeal.
Understanding altcoin market capitalization assists investors in evaluating the potential of Polkadot. Polkadot’s scalability and interoperability contribute to its potential for future growth.
Altcoin market capitalization sheds light on Polkadot’s position in the evolving blockchain landscape.
Chainlink (LINK)
Understanding altcoin market capitalization highlights Chainlink’s role as the industry standard for oracle services. Chainlink provides secure and decentralized data feeds, enabling blockchains to access reliable information.
Oracles play a crucial role in allowing blockchains to obtain data from external sources. Chainlink has emerged as the leading supplier of oracle services in the blockchain industry.
The native cryptocurrency of Chainlink goes by the name LINK. Over the past few years, Chainlink has gained popularity within the crypto community. Many blockchains rely on Chainlink’s oracles to access accurate and trustworthy data.
Its continuous growth stems from the widespread adoption and trusted reputation it has earned. Monitoring altcoin market capitalization provides insights into Chainlink’s market presence.
The market capitalization of LINK reflects its relative size and popularity among altcoins. Chainlink’s reliable oracle services contribute to its position as a leading project in the space.
The crypto community’s support and recognition have propelled Chainlink’s success. Understanding altcoin market capitalization helps investors evaluate the potential of Chainlink.
Chainlink’s oracles bridge the gap between blockchains and external data sources. Altcoin market capitalization sheds light on Chainlink’s significance in the evolving blockchain ecosystem.
Coin of Binance (BNB)
Understanding altcoin market capitalization sheds light on exchange-owned coins as a novel asset class. BNB serves as the native cryptocurrency of Binance, the world’s largest cryptocurrency exchange.
The initial objective of BNB was to reduce trading expenses for Binance customers. Over time, the use cases for BNB have expanded alongside Binance’s ongoing development.
BNB holders can now stake their coins to earn passive income. They can also participate in farming various DeFi coins and engage in IEOs via Binance Launchpad. BNB is a crucial component of Binance’s blockchain, the Binance Chain.
Monitoring altcoin market capitalization provides insights into BNB’s market presence. The market capitalization of BNB reflects its relative size and popularity among altcoins.
BNB’s expanding use cases contribute to its growing significance in the cryptocurrency ecosystem. Understanding altcoin market capitalization helps investors evaluate the potential of BNB.
BNB holders can engage in various activities using their BNB holdings. Passive income generation and participation in DeFi and IEOs are among the opportunities. Binance’s ongoing development and progress contribute to the ecosystem around BNB.
Altcoin market capitalization sheds light on BNB’s role as an exchange-owned coin in the market.
At this point, it has the highest market capitalization of any cryptocurrency controlled by an exchange.
This brings an end to our list, but before we do, it is essential to point out that there are many more respectable projects, and it is simply impossible to include all of them on a single list.
The Potential Benefits and Dangers of Investing in Alternative Coins
Understanding altcoin market capitalization helps address common questions among cryptocurrency newcomers. Alternative cryptocurrencies often appear more appealing to newbies due to their lower price compared to Bitcoin.
The affordability of altcoins arises from their smaller market capitalization in comparison to Bitcoin. Bitcoin’s dominance in market capitalization rests on its long track record and high level of security.
Institutional investors primarily focus on Bitcoin as the leading cryptocurrency. The historical charts of altcoins demonstrate their susceptibility to volatility.
While some altcoins are well-known, they often come with higher levels of risk. Altcoins offer prospects for investment, but each one must be carefully examined.
Understanding altcoin market capitalization helps investors assess the potential risks and rewards. Newbies should approach altcoin investments with caution and conduct thorough research.
Bitcoin’s market capitalization reflects its established position and widespread adoption. Altcoin market capitalization provides insights into the relative size and popularity of alternative cryptocurrencies.
CoinMarketCap’s historical data showcases the market volatility experienced by altcoins. Investors should carefully consider the risks associated with altcoins before making investment decisions.
Altcoin market capitalization analysis aids in understanding the dynamics of the cryptocurrency market.
Risks
The majority of alternative cryptocurrencies will experience a decline in value over time, making it extremely dangerous to invest in them, especially in the long term.
Because of their lower trading volumes and smaller market caps, scammers can more easily target them with pump and dump schemes.
Whale investors (big investors) and bag holders have an easier time manipulating these markets.
If anything more advanced were to emerge in the future, the technology they give might become obsolete. They are heavily influenced by the price of Bitcoin and its momentum.
Opportunities
It’s possible that taking more risks will result in greater returns. On the other hand, there are a lot of “ifs” in this situation.
You have the opportunity to be part of a recognized initiative that experts expect will experience tremendous growth in the years to come.
Even if there is greater potential for loss, investing in alternative cryptocurrencies may be lucrative.
However, before you invest your money in any cryptocurrency, be sure to undertake thorough research on the cryptocurrency in question and approach it as if it were an actual investment vehicle.
Do not invest in something simply because someone says, “it’s only$0.01, and if it hits “only”$0.1, I can earn a fortune of an easy 10X.” Hundreds of alternative cryptocurrencies are no longer in circulation since they do not have any value in the real world.
If you’re looking for some direction in this area, we’ve put up a pretty detailed guide on how to build a cryptocurrency portfolio that is diversified and suitable for the long term.
Where Can I Buy Alternative Coins?
You should never keep your money on a cryptocurrency exchange since doing so poses a significant security risk. This is an excellent general rule of thumb.
When you first purchase some currency you intend to keep for the long term, you should always store it in a cold storage facility and adhere to our other safety recommendations.
On the other hand, if you want to make a purchase, you will need to use an exchange unless you come across an option to do so over the counter.
Binance is the digital currency market’s most reliable and established trading platform. To our great good fortune, they support hundreds of distinct cryptocurrencies, each with enormous quantities of trading volume and liquidity.
We have compiled a step-by-step instruction manual on registering for an account and getting started with the system. Coinbase, Bitfinex, Huobi, OKEx, and others are just some of the well-known cryptocurrency exchanges currently operating.