Altcoins are all the cryptocurrencies other than Bitcoin, from large networks such as Ethereum to stablecoins, exchange tokens and thousands of tiny memecoins. They differ enormously in purpose, size and risk, which is why a good starting point is to ask what each one is meant to do and who stands behind it. Many altcoins have little or no real use, and a large share of them eventually stop trading.
In brief
- Altcoins are all crypto-assets other than Bitcoin, a group that includes Ethereum, stablecoins, exchange tokens and memecoins.
- They belong to very different categories, so it only makes sense to compare an altcoin with others of the same kind.
- The market is concentrated: at the moment Bitcoin alone accounts for roughly three fifths of the total value, and most altcoins are far smaller.
- Many tokens fail, so assessing the purpose, the supply, the team, the liquidity and the risks of an altcoin matters more than its recent price.
In this article · 10 min read
What altcoins are
The term comes from "alternative coins". According to the Corporate Finance Institute, altcoin originally referred to every cryptocurrency launched after the success of Bitcoin, and today it is often used for any coin other than Bitcoin and Ethereum. Both uses are common, so in this guide altcoins means every crypto-asset except Bitcoin, and we say clearly when we talk about Ethereum on its own.
Two technical terms help here. A coin is the native currency of its own blockchain (the shared digital ledger that records every transaction), such as Bitcoin on the Bitcoin network. A token is an asset created on top of an existing blockchain by a smart contract (a program that runs on the blockchain by itself). According to ethereum.org, tokens can represent almost anything, and the ERC-20 standard defines how interchangeable tokens behave on Ethereum, which is why so many projects launch this way. Launching a token takes little effort, which explains why there are so many of them.
The main types of altcoins
Altcoins can be sorted into families. The table below uses categories that are common among crypto educators, and the limits between them are not always sharp.
| Type | What it is | Example | Main thing to watch |
|---|---|---|---|
| Other layer 1 coins | Coins of their own blockchain, often compared to Ethereum | Solana | Real use of the network and competition |
| Stablecoins | Tokens that aim to track a currency such as the US dollar | USDT, USDC | The reserves and the issuer behind the peg |
| Exchange tokens | Tokens tied to one exchange, often with fee discounts | BNB | Dependence on a single company |
| Payment coins | Coins built mainly to move value | XRP | Adoption outside the crypto world |
| Memecoins | Tokens born from jokes, trends or online communities | Dogecoin | Prices driven by hype, few real uses |
| Wrapped tokens | Tokens that represent another asset held by a third party | Wrapped versions of Bitcoin | Counterparty risk, you rely on the holder |
The Securities and Exchange Commission (SEC), the American markets supervisor, described memecoins in a staff statement of 27 February 2025 as crypto assets inspired by internet memes, characters, current events or trends, whose value rests mainly on market demand and speculation. Stablecoins are a different animal, and our guide to stablecoins explains how they work and how their peg can fail.
How big the altcoin market is
The market is far less balanced than the long list of names suggests. On 25 October 2026, according to CoinGecko, the total value of the crypto market was about 2,722 billion US dollars. Bitcoin was worth about 1,623 billion, Ethereum 288 billion, Tether (USDT) 182 billion, BNB 98 billion, XRP 82 billion, USD Coin (USDC) 72 billion, Solana 60 billion and TRON 31 billion. Bitcoin alone therefore accounts for roughly three fifths of everything, and each of the others is a fraction of it.
Market value, or market capitalisation, is the price of one unit multiplied by the number of units in circulation. It is a rough way to compare size, but it is not the same as the money that could actually be sold at that price, and for small tokens the gap can be wide. Two of the eight names in the chart are stablecoins, which hold a steady value by design and are not meant to grow.
Why so many altcoins fail
Creating a token is cheap, and many are launched with little behind them. CoinGecko, which tracks crypto prices, counted the tokens on its onchain tracker GeckoTerminal that are no longer actively traded, grouped by the year of their last trade. In its dead coins study, covering the period to 31 December 2025, about 1.4 million tokens last traded in 2024 and about 11.6 million in 2025. Only tokens that had at least one trade before going quiet were counted. The definition of "dead" is simply that nobody trades the token any more, but the size of the numbers shows how short-lived many tokens are.
The warnings from public authorities go in the same direction. In March 2022 the three European financial supervisors, the EBA, ESMA and EIOPA, warned consumers that many crypto-assets are highly risky and speculative. Rules have changed since then, but the basic message about volatility and possible total loss still applies. Our guide to crypto scams shows how fake projects use the same enthusiasm.
Bitcoin Dominance Explained (And How It Affects Other Coins), by CoinGecko (in English)
John Bax's view
In Cryptocurrency Investing, John Bax insists on a simple rule of method: crypto projects should be compared within their own category. Comparing Bitcoin with Ethereum, or Ethereum with a memecoin, makes no sense because they are totally different assets. He also presents Bitcoin as the only project created to change the form of money rather than for speculation, and sees decentralisation as a scale, with Bitcoin at the top and many projects far below.
For people who decide to hold altcoins in a long-term portfolio, he offers a personal framework: at least 80% of the crypto part in Bitcoin and Ethereum, and no more than 20% in other altcoins, with Bitcoin much larger than Ethereum. It is an educational guideline from the book, not advice that fits everyone. Our guide on how to invest in crypto shows where this fits in a wider plan. Cryptocurrency Investing goes through each category of coin step by step.
How to assess an altcoin, step by step
- Define the category. Is it a layer 1 coin, a stablecoin, an exchange token or a memecoin? Compare it only with others of the same kind.
- Ask what problem it solves. A project that talks mostly about its price and little about its use deserves caution. A serious team usually speaks in technical, concrete terms.
- Look at the supply. How many tokens exist, how many are in circulation and when the rest will be released. A large amount still to be released can weigh on the price later.
- Check the team and the code. Read the whitepaper (the founding document of the project), look for independent audits of the smart contracts, and check whether the team can be identified.
- Check liquidity. Look at the daily trading volume and where the token is listed. With very low volume, a single order can move the price and make the market value meaningless.
- Decide the size in advance. Choose an amount you could lose without affecting your plans, and write it down before buying.
In our experience, beginners usually ask which altcoin to buy before they ask what problem it solves, and that order is worth reversing.
Advantages and limits
Advantages
- Some altcoins power real networks, with applications built on top of them, that Bitcoin was not designed to offer.
- The choice is wide, from payment coins to stablecoins, so there are tools for different purposes.
- Small projects can grow quickly in good periods, although this goes with a high risk.
Limits and risks
- Total loss is possible. Many small tokens end up with no trading at all.
- Hype and manipulation. Prices of small tokens can be pushed by social media tips, and the "secret tip" is a common way to attract buyers.
- Thin liquidity. It can be hard to sell at the price you see on the screen.
- Counterparty and platform risk. Wrapped tokens, exchange tokens and stablecoins depend on a third party keeping its promise.
- Fake projects. Scams often imitate real tokens, so check the exact contract and the platform before buying.
Where altcoins fit in a crypto plan
Most readers do better by understanding the large, well-known assets first. If you are new, our guide on buying cryptocurrency safely explains the first steps, and a hardware wallet keeps the keys under your control. If you later want to trade in a more automated way, Crypto Go Bot, which we built, follows the on-chain moves of wallets with a track record and trades your own Kraken account, with take profit and stop loss placed as orders on Kraken. Trading is risky, and the bot also closes trades at a loss.
Checklist before buying any altcoin
- I know which category it belongs to and what it is for.
- I have read what its team says and checked who stands behind it.
- I know how many tokens exist and how many are still to be released.
- I have checked the trading volume and that I can sell it somewhere reliable.
- I am buying the exact token, not a copy with a similar name.
- I have decided in advance the amount I accept to lose.
Who it is for
Whether altcoins make sense depends on what you want from them and how much uncertainty you can live with.
- Curious beginners: they can use the types of altcoins as a map, learning what each category is for before buying anything, as long as they start with the largest and best-known assets.
- Long-term crypto holders: they may keep a small altcoin section next to Bitcoin and Ethereum, sized so that losing it entirely would not change their plans, and reviewed a few times a year.
- Active traders: they can look at altcoins for the movement they offer, provided they accept thin liquidity, use stop losses and treat each position as a risk to be sized.
- People who like researching projects: they enjoy reading whitepapers, supply schedules and audits, and have the time to follow a project before deciding.
Key terms
- Altcoin: any crypto-asset other than Bitcoin, sometimes also excluding Ethereum.
- Token: an asset created on top of an existing blockchain through a smart contract.
- Layer 1: the base blockchain, such as Bitcoin or Ethereum, on which other things are built.
- Market capitalisation: the price of one unit multiplied by the number of units in circulation.
- Memecoin: a token born from a joke, a trend or an online community, whose price depends mainly on attention.
- Liquidity: how easily an asset can be bought or sold without moving its price much.
Frequently asked questions
What are altcoins?
They are cryptocurrencies other than Bitcoin. Some people also leave Ethereum out of the group, so it is worth checking which meaning is used.
Is Ethereum an altcoin?
Strictly speaking it is, since it is not Bitcoin. In practice many people treat Bitcoin and Ethereum as the two large assets and use "altcoins" for the rest.
Are altcoins riskier than Bitcoin?
Usually yes. They tend to be smaller, less traded and more dependent on a single team, so prices can swing more and some projects disappear. Bitcoin is also volatile, so holding any crypto-asset involves risk.
What is the difference between a coin and a token?
A coin is the native currency of its own blockchain. A token is created on top of another blockchain, for example on Ethereum, through a smart contract.
How do I tell a serious altcoin from a risky one?
Look at its purpose, supply, team, code audits and liquidity. Projects that promise quick gains or talk mostly about price call for extra caution.
How many altcoins should I hold?
There is no right number. John Bax suggests keeping a long-term crypto portfolio mostly in Bitcoin and Ethereum and limiting other altcoins, but each person has a different risk tolerance.
Can I lose everything on an altcoin?
Yes. Some tokens stop trading completely, and then the value can fall to zero. That is why the amount should be one you can afford to lose.
Sources
- Corporate Finance Institute, Altcoin guide
- ethereum.org, ERC-20 token standard
- U.S. Securities and Exchange Commission, Statement on Meme Coins, 27 February 2025
- CoinGecko, Dead coins: how many cryptocurrencies have failed?
- CoinGecko, Cryptocurrency prices and market capitalisation
- EBA, ESMA and EIOPA, EU financial regulators warn consumers on the risks of crypto-assets, 16 March 2022
- Wikipedia, Cryptocurrency
