Before you venture into the crypto universe, you probably should understand how things work. And to help you learn a little more about this magnificent universe, we will talk about Altcoins.
Do you know what Altcoins are?
Before answering this question, you need to know that Bitcoin has started a new cycle in the global economy, bringing to the technological area a revolutionary project that currently is used in several areas besides the financial, such as the educational area, for example, this project is Blockchain technology.
Now, let's talk about other cryptocurrencies, the Altcoins. Altcoins are, as their name implies, alternative assets which means that any other cryptocurrency other than Bitcoins is an Altcoin, including stablecoins.
The first Altcoin was born in 2011 and was named Namecoin (NMC). Its origin came from a fork of the Bitcoin source code but today NMC, even though it is listed on some exchanges, is considered a dead currency. Namecoin opened the doors for other projects to be presented and launched, starting the expansion of this universe. Today, for example, more than 5.000 Altcoins have been launched.
It is worth mentioning that most of these Altcoins, launched to date, were built on top of the Blockchain concept created with Bitcoin.
The year 2020, due to Covid19 pandemic, was an atypical year and the world economy suffered a lot and is still fragile. This crisis was felt very early in the pandemic even by cryptocurrencies and it was possible to see this when many of them had a big drop and not even Bitcoin, the biggest and most valuable crypto, was left out of this wave.
Even with the effects of the pandemic, cryptocurrencies have grown again. From the moment that institutions started to buy large amounts of Bitcoin, it caused a chain reaction and the crypto markets began to breathe again, valuing them even more and breaking historical records, with BTC reaching US$40,000. But it wasn’t just the most famous cryptocurrency that grew, Altcoins hitched a ride on that wave and saw significant increases.
The second largest cryptocurrency, in terms of *Market Capitalization, completed 5 years on July 30th.
Despite dropping by almost 50% in March 2020, ETH followed in the footsteps of Bitcoin and had an expressive appreciation. In January 2020, ETH was worth $120.26 and ended the year at $732.27. On December 29th, ETH had its maximum registered at $741.31. In 2021, ETH continued to grow and today it is being traded on Blocktane at $1,331.50.
In 2020 Ethereum started an update to address some limitations and problems that the network had, this update became known as Ethereum 2.0. Even though the network was updated, it maintained all the characteristics of a decentralized network.
Is it worth investing in Altcoins?
Like any other investment, before taking a risk, study about the Altcoins that interest you and make sure you understand how each one works.
To find out if one or another Altcoin is good or bad is not an easy task and it is up to the investor to analyze them and see if they fit within their investment strategies.
According to Future Of Money magazine, there are some factors that can help you understand which Altcoins may be relevant in your strategy, but for that you need to understand information such as: “the user community, the technology used, the objective of the Project, Popularity and Qualification of the developer team ”(Future Of Money).
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*“Market Capitalization is a way of classifying the relative size of a cryptocurrency. It is calculated by multiplying the Price by the Current Supply. ” (CoinMarketCap)