Everything you have to know about altcoin season
When investing, people always take into consideration the current performance of the crypto market to see whether or not it will be a great time to do so. Aside from seeing Bitcoin as the top possible investment, many are also curious about altcoins and the right season to invest in them.
Altcoins are becoming more popular as they also increase in value and are considered as valuable investments. Nowadays, altcoins are being invested in and they’re seen as more than just investments as they are now accepted in several sites, including Bitcasino where you can play slots and Bitcasino live casino games.
Aside from using these assets to play Bitcasino slots, you might also wonder how much potential they actually have. Here is a better understanding of what people now refer to as altcoin season:
What are altcoins?
Altcoins are cryptocurrencies which can be used to substitute Bitcoin (BTC) which is leading in terms of market capitalization. Some people also refer to them as ‘alternative coins’. What makes them so popular is that aside from the fact that they have a similar commercial potential like BTC, they each have their special features and functions.
They do the same purpose as BTC while costing less. Since Bitcoin is currently the most expensive cryptocurrency, investing in it is more challenging than it was when it was first released. With that, more people are interested in investing in altcoins to participate in the crypto industry without breaking the bank.
What is an altcoin season?
The term ‘altcoin season’ describes a time frame in which other cryptocurrencies, or ‘altcoins’, surpass bitcoin (BTC).
If you aren’t that familiar with it, there is a well-known statistic that compares BTC to altcoins because BTC controls a sizable percentage of the trading volume in crypto markets. This is called ‘Bitcoin dominance’ and it’s defined as the ratio of Bitcoin’s market cap to the market caps of all other cryptocurrencies.
The emergence and growing acceptance of altcoins have caused BTC’s dominance to decline. This means that an altcoin season begins when several cryptocurrencies amass a substantial market cap that surpasses Bitcoin’s market value.
Altcoins typically outperform Bitcoin during an altcoin season, which results in Bitcoin losing market share. As a result, seasoned traders and investors with varied portfolios pay attention to altcoin seasons and modify their holdings as necessary.
Why does it happen?
There are several factors that indirectly contribute to the occurrence of altcoin seasons every now and then. Three of them include:
- Decreasing interest in BTC
As traders attempt to diversify their holdings by investing in other crypto assets, the market cap will shift to altcoins as Bitcoin’s dominance declines.
Historically, the price of bitcoin tends to settle and hold at a high level for extended periods of time after an upward trend. This may lead market participants looking for quick profits to sell their BTCs and switch to altcoins instead. The high price of BTC can also deter new crypto buyers who may opt to buy altcoins instead.
- Bullish market trends
The popularity of altcoins can also be influenced by a bullish economy, a rise in the stock market, and a general feeling of optimism in the cryptocurrency industry. In fact, even a tiny increase in the market cap of altcoins can benefit from the rising demand for risk and larger returns during bull markets.
- Emerging crypto trends
The introduction of new altcoins or modifications to current ones may also spark interest and boost demand. This is particularly true if the altcoins are introduced as a part of a bigger trend and present distinctive features or answers to existing crypto issues.
The emergence of decentralised finance (DeFi) in 2020 played a role in the rise of the crypto market. Another example is the rise of non-fungible tokens (NFTs) in 2021 and the interest in the Web3 adoption in early 2022.
Indicators of an altcoin season
Aside from knowing more about the possible causes that lead to an altcoin season, you may also be interested to learn more about the indicators you have to take note of to determine whether or not an altcoin season is already starting. Here are some of those:
- When Bitcoin is on an extensive bullish run
Over the past few years, a great bullish run on BTC’s value has helped altcoins perform well. This behaviour can be linked to new investors buying altcoins since they are less expensive than Bitcoin, which increases the appeal of their growth potential.
- When the market caps of other altcoins are also rising
Popular altcoins also have significant market capitalizations. Profits may occasionally transfer to other altcoins when coins like Binance Coin and Ether have upward price movements that transcend those of Bitcoin. This makes sense in the same way investors transfer money from Bitcoin to other perhaps more lucrative altcoin investments.
- When there are new emerging blockchain trends
If debates on Discord and Twitter about new developments in the industry are taking over the media and social media, this could soon lead to the creation of new altcoins, increasing the market cap.
Aside from DeFi, another trend that piqued the eye of gamers, fans, and other communities outside of the cryptocurrency realm is the metaverse trend. This swept the globe as it showed people a new way on how they can learn more about digital assets in a fun way.
Ideal altcoins you can invest in
Now that you know more about altcoin season and what they are all about, you may also consider learning more about the promising altcoins you may wish to invest in:
- Ether (ETH) → The native token of the Ethereum network is the most well-known altcoin. Despite having a lower value than BTC, ETH is ranked second on the crypto market. Aside from that, you will also notice how this asset is being widely accepted in businesses and websites just like BTC.
ETH is known for adopting the Proof of Stake (PoS) system which makes it possible for its owners to take advantage of smart contracts. With this, users can ensure that particular conditions are satisfied before transactions are confirmed. They can also complete transactions more quickly.
- Cardano (ADA) → Cardano was established in 2015 by Colorado-based mathematician Charles Hoskinson. This altcoin also uses the PoS protocol which adds to its level of security and safety.
This was founded by a team of researchers who have published articles on blockchain technology. The blockchain’s native token, ADA, is used to process value exchange, just like many other crypto tokens. It also lets people make smart contracts as well as transmit and receive money with little transaction cost. Given its potential, some have given this well-known altcoin the moniker ‘Ethereum killer’ because of its potential.
- Tether (USDT) → Tether is one of the standout assets in terms of market cap. It is regarded as one of the most well-liked stablecoins in addition to being a promising altcoin. As a result, reliable assets like the US dollar serve as the foundation for its value.
Tether has maintained its standing as a trustworthy stablecoin on the market throughout the years. Currently, USDT serves as a link between fiat currency and cryptocurrencies.
- Ripple (XRP) → Ripple stands apart from other cryptocurrency on the market because of how financial institutions accept it. This is managed and controlled by private corporation Ripple Labs.
The primary goal of XRP is for it to be used for fast transactions as it can process transactions as fast as four seconds. Aside from that, it can also handle 15,000 transactions per second, which is far faster than other coins can.
- Dogecoin (DOGE) → Developers Billy Markus and Jackson Palmer made DOGE in 2013 as a joke. Their primary objective in making it was to reach a big audience rather than to be an asset. They did this by using the well-known Shiba Inu as the coin’s face. This asset uses a Scrypt algorithm aside from its own blockchain to control mining operations and validation procedures better.
This was already doing well on the crypto charts despite having a low value. However, everything changed when multi-billionaire Elon Musk posted his opinions about this coin online. With his enormous influence in the industry, investors bought the coin, which caused a bullish run on its value.
These are just some facts that you would have to know about altcoin season and what makes them such a remarkable time for crypto investors. By having a better understanding of these and seeing how to make the most out of them, you can have a smoother and better investing experience with these remarkable altcoins which you can also use for crypto betting!