- Cryptocurrencies that share similar features with Bitcoins but are way different from them are called altcoins.
- Due to cheap prices, many investors have been moving towards Altcoin.
- Altcoins use different consensus mechanism validate transactions.
According to various media reports, Altcoins have surged over 60% of the cryptocurrency market in October 2021. This article will walk you through - why are altcoins gaining strength in the cryptocurrency market.
What is altcoin?
Cryptocurrencies other than Bitcoins are referred as Altcoins. As per its name, it is an alternative coin that includes all alternatives to the Bitcoin. Some major altcoins types are mining-based crypto, security token, utility token and stablecoins.
Why are altcoins gaining strength in the cryptocurrency market?
Their basic framework is like Bitcoin, where giant computers are capable of processing large data and transactions at the same time.
Why are altcoins surging in the crypto market?
Altcoins have become a viable investment option for several investors. According to experts, this cryptocurrency is likely to surge over the upcoming years. Supported by reasonable prices, these cryptocurrencies drive huge buying.
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Most of the investors in the crypto market are small investors, hence, they trade Altcoins. Further, it should also be noted that Bitcoin’s price fluctuations are risky, that’s why small traders tend to buy Altcoins more.
There are several reasons behind the increasing popularity of Altcoins, some of the major poinst are mentioned below –
Scalability is one of the most important features in cryptocurrencies as high scalability drives higher growth rate. It refers to the ability of network to perform large number of transactions during busy network.
Altcoins drive more scalability, that’s why it has been gaining strength in the crypto market. One of the most recent examples is - Ethereum 2 that was launched in 2021, which revolutionised the crypto world with its launch.
As described earlier, most of the crypto market traders are small investors, and Altcoin is cheaper than Bitcoin, hence, it is becoming more popular over the time.
Expected increase in Ethereum prices
According to experts, Bitcoin’s price is likely to exceed US$50,000, which can increase the price of other Altcoins like – Ethereum. Hence, investors are switching towards Altcoin to make quick money.
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Moreover, analysts predict that Ether prices will rise further which adds to the Altcoin’s growing market strength.
Limited number of Bitcoin
Due to increasing demand for Bitcoins over 2021, analysts predict shortage of the cryptocurrency. In such scenario, Altcoins becomes the best option, as Bitcoin comes with a limited amount of 21 million and around 18,853,668 Bitcoins have been extracted so far.
Due to the increasing price of Bitcoin and several other factors, analysts predict that Altcoins will take over most of the currencies soon. However, its always important for the investors to properly follow the market trends.