If you’re a technology or crypto coins enthusiast interested in diversifying your cryptocurrency trading portfolio, you may ask yourself how to buy altcoins. Apart from Bitcoin (BTC) and Ether (ETH), several other promising other coins offer growth, innovation, andprofit-making opportunities.
This guide explains the step-by-step process for buying and selling altcoins to help you make an informed investment decision in the cryptocurrency market.
What are Altcoins and Why Do People Buy Them?
The term “altcoins” is the short form for “alternative coins” and refers to any other popular cryptocurrency apart from Bitcoin (BTC). The word implies that altcoins are alternatives to traditional government-issued fiat currencies and Bitcoin, the flagship cryptocurrency.
If you’ve been in the crypto assets space for a while, you already know thousands of altcoins are in the market, with the initial ones being launched as early as 2011.
The first altcoins were designed to address Bitcoin’s perceived shortcomings and improve transaction speeds, energy efficiency, low transaction fees, and other related aspects.
Besides their investment potential, people buy altcoins, often perceived as “improved versions” of cryptocurrencies, because they serve various purposes. The most common factors associated with popular alternative coins include utility and broader use cases.
Where to Buy Altcoins
Whether you’re a beginner trying your first altcoin investment or an experienced trader refining your strategy, choosing where to buy your altcoins is your first crucial step.
The crypto space offers various cryptocurrency exchanges with different features, transaction fees, and security measures. Selecting a fast, secure, reliable, and user-friendly centralized or decentralized cryptocurrency exchange is convenient and determines your overall experience and trading outcomes. Some of the top altcoin trading platforms in the market include Binance, OKX, Bybit and MEXC.
Regardless of which exchange you’re using, always verify trading platforms comply with Know Your Customer (KYC), Anti-Money Laundering (AML), and other forms of regulatory compliance to optimize your trading experience.
How to Buy Altcoins: Step-by-Step
When it comes to buying and selling altcoins, the process involves only a few more steps than buying Bitcoin. Most experts recommend buying BTC and trading it for your desired altcoin since most can be paired with Bitcoin.
While you could get altcoins directly over the counter (OTC) or from other traders, we highly recommend that beginners use trusted cryptocurrency exchanges to avoid fraud.
The following are steps to take when choose to trade altcoins:
Step 1: Decide what percentage of your crypto portfolio you will dedicate to altcoins
Research shows that most altcoins fail within 1.2 years. When speculating on untested coins, you need to divide your crypto portfolio into risky layers. Consider using a portfolio tracker to monitor your coins.
Step 2: Research and find the best coins
Consider factors such as liquidity and trading volume, purpose, adoption rate and community support to decide on which altcoin to buy. Additionally, check whether the coin has an official working website or is supported by your digital wallet or plan to use it.
Step 3: Deposit funds to buy cryptocurrency
Since you can’t purchase altcoins with fiat currency in most cases, you need to buy digital currencies like Bitcoin to swap with your preferred altcoin at the cryptocurrency exchanges you’ll be using.
Some exchanges accept bank transfers credit card purchases from leading financial institutions, so check on the best cryptocurrency exchanges.
Step 4: Select the right exchange
Once you’ve bought your Bitcoin, scout the cryptocurrency market for an exchange that offers your altcoin. Choose from the available alternatives using factors like daily volumes, currency pairs, hourly trades, and market cap.
Unless you’re an expert, avoid less popular exchanges and choose more liquid ones. The next step is registering for the exchange before using it.
Step 5: Select the currency pair
After you register, transfer some Bitcoin from your hardware wallet to the exchange. Since trading is done in currency pairs, you must exchange your BTC for your altcoin. Since the altcoin market is dynamic, always check how the currency pair you selected has traded over the past few weeks or months for reference.
Step 6: Trade Bitcoin for your selected altcoin
Once you’re ready to proceed, visit the exchange and place a market order to buy. If you’re using the exchange for the first time, take the time to understand how orders work.
Step 7: Transfer the altcoins into your wallet
Once you finish the process, the altcoins you just bought will be live on the exchange. Complete the process by moving your precious cryptocurrencies off the exchange and into your crypto wallet.
There are two types of wallets to store altcoins: a hot wallet connected to the internet and lives on your mobile phone or computer, or a cold wallet, such as a paper wallet or hardware wallet, that isn’t connected to the internet. Cold wallets are considered more secure.
You just learned how to buy and sell altcoins, and started speculating about the future of money. If your crypto’s value escalates, you can reap a good return on investment.
Key considerations to buy altcoins effectively
When it comes to buying altcoins, the following should be your key concerns when making a decision:
- Purpose and Technology Used: Discover the functionality the altcoin serves to determine its potential in the future.
- Market Performance: Evaluating the market performance by analyzing factors like price history and market capitalization to understand how it could perform.
- Community and Support: An altcoin with a robust and engaged community indicates a healthful ecosystem; monitor social media sites to determine the altcoin’s standing within the community.
- Adoption Rate: The higher the adoption rate, the more likely it is that the altcoin is reliable and capable of attracting more customers and institutions to utilize it for various functions.
How to Select the Altcoin to Buy
There are different types of altcoins to choose from today’s altcoin market, each addressing a different issue within the cryptocurrency space. As a result, selecting the right one from a multitude of choices can be a difficult task.
You need precise criteria to help you evaluate the relevance of any altcoins and their potential return on investment before you add them to your portfolio. Among the essential factors to consider include the following:
Project and Objective
Select an altcoin with a clear objective, one designed to solve a specific problem. Understand the solution it offers and how it integrates with the broader blockchain and cryptocurrency space.
Development Team
Research information about the professional background and reputation of the development team members. An experienced team with relevant skills increases confidence in the altcoin’s ability to thrive, or whether it has community support.
Liquidity and Trade Volume
An altcoin with enough liquidity and a high trading volume shows it is highly traded, reducing the risk of manipulation or high market volatility. High liquidity guarantees that you can quickly convert your altcoin investment into fiat money or other digital assets.
Among the most popular altcoins you can buy today include several well-established coins with a large market cap, like Ethereum (ETH), Binance Coin (BNB), Solana (SOL), Ripple (XRP), Cardano (ADA), Dogecoin (DOGE) and Avalanche (AVAX).
Nonetheless, note that many of these have experienced tremendous growth and overcrowding. Consider some lesser-known altcoins with better investment opportunities after carefully researching the altcoin market. This can include low liquidity altcoins like Shiba Inu (SHIB), Toncoin (TON), Polkadot (DOT, Chainlink (LINK), Injective (INJ), and Stellar (XLM), among others.
Most Popular Altcoins to Buy
The following are the best altcoins you can buy right now:
- Ethereum (ETH) – A favorite with program developers because of its potential to develop decentralized applications and smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).
- Litecoin (LTC) – A peer-to-peer cryptocurrency that enables fast, near-zero cost payments to anyone worldwide due to its faster transaction speeds and lower fees, often used for day-to-day expenses.
- Stellar (XLM): Stellar is mostly used to facilitate affordable cross-border payments and serve as a bridge currency between different currencies in cryptocurrency exchanges.
- Ripple (XRP) – One of the most significant altcoins focusing on facilitating an efficient global payment system, designed to provide low-cost cross-border transactions aiming to improve the traditional SWIFT system.
- Uniswap (UNI) – A governance token native to the Uniswap platform that enables holders to participate in decision-making.
- Polkadot (DOT)—The DOT token facilitates payments, crypto staking, network governance, transaction fees, and reward incentives, among other things.
Where to Store Altcoins
Protecting your digital assets is the most critical aspect of investing in the digital currency market because, compared to government-issued currencies, crypto is more susceptible to hacking attacks. Thus, be careful when choosing which crypto wallet to store your altcoins. For hot wallets, Trust Wallet, MetaMask, and Coinbase Wallet are the top choices of most traders.
However, a careful approach to safe storage demands that you use a hardware wallet, which is a physical device that offers offline altcoin storage. Unlike hot wallets, hardware wallets like Ledger, Trezor, and Exodus are not vulnerable to online attacks since they’re not connected to the internet.
How to Sell Altcoins
The process of selling altcoins resembles the process of buying altcoins:
- Log into your crypto exchange account
- Select the altcoin you intend to sell
- Choose a matching trading pair
- Place a sell order that’s within your preferred parameters
- Wait for a buyer and close the sale after receiving payment.
Conclusion
Altcoins have transformed the crypto landscape and offered exciting opportunities for investors. Whether you choose more established cryptocurrencies or stick to the high-risk, high-reward altcoins, always exercise caution when buying or selling altcoins.
Frequently Asked Questions (FAQs)
Why do people choose altcoins?
People in the crypto market interested in diversifying their crypto portfolios choose altcoins because they are less expensive than Bitcoin and have more use cases.
What is the difference between altcoin and token?
The main difference between altcoins and tokens is their structure. Altcoins are independent cryptocurrencies with their own blockchains, while tokens operate on top of blockchains and facilitate the creation of decentralized applications (DApps).
What are examples of altcoins?
The most popular altcoins based on market cap include Ethereum, Ripple, Tether, Bitcoin Cash, Bitcoin SV, Litecoin and popular meme coins like DOGE.
What is the purpose of altcoins?
Most altcoins operate as cryptocurrencies, with the main purpose of serving as a store of value and handling decentralized peer-to-peer payments.
What is the best site to buy altcoins?
User reviews show that Binance is the go-to exchange for altcoin traders as it offers the widest selection and an unparalleled diversity of altcoins for trading.
What is the best altcoin to buy?
Solana (SOL) would be the best altcoin to buy as it has a high potential for explosion. The altcoin has developed blockchain infrastructure that aligns with the Web3 era.
What is the best wallet for altcoins?
The best altcoin wallets you can use for your altcoins include Trust Wallet, MetaMask, Coinbase Wallet, and Exodus Wallet.
What crypto coin will give you 1000x?
While it’s impossible to guarantee a 1000x gain in the crypto market, history shows it can happen. Crypto coins like Solana, Polygon, and Shiba Inu have delivered such profits in previous cycles.
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