Altcoin season: why it is good to invest in it
If you are interested in the world of cryptocurrencies, you will have heard of the term altseason or altcoins. It is undoubtedly captivating the interest of cryptocurrency investors, but it is still a fact that raises questions.
What does the altcoin season consist of, when does it occur and why is it good to invest in it? Join us in this article and find out.
What is altseason or altcoin season?
The altseason is known as the rising season of alternative cryptocurrencies to Bitcoin. The term gained notoriety in 2017 and 2018, after the Bitcoin bubble occurred with the price crash after reaching an all-time high of $19,0000 USD.
At that time, everyone could feel the panic of some investors after several drops in the price of the currency. Red dominated the markers. A new bubble had burst.
It was not long before BTC's competitors gained market share. To the facts we refer: in January 2017, Bitcoin accounted for about 90% of the market. In January 2018 this figure dropped to 30%. So, who occupied the remaining percentage? The altcoins or alternative cryptocurrencies to Bitcoin, Litecoin or Ethereum.
The altcoins were born to compete with them, bringing new utilities and advantages to users: lower energy costs, greater privacy, faster transactions... Little by little, users' interest in other cryptocurrencies has been awakening.
When Bitcoin exploded, the demand for altcoins grew like wildfire. This is how the altseason or altcoin season was born.
Is it possible to know when the next altseason will occur?
When the alerts go off, the cryptocurrency world does not stand still. There are more than 8,000 cryptocurrencies worldwide, and while Bitcoin and Ether are among the most popular, the market continues to heat up by sparking interest in other altcoins.
After the peak that altcoins reached in 2018, most of them fell again and Bitcoin regained its value.
It is very difficult to know precisely when the next altseason will be. Especially because many factors are involved, such as the increased interest of users in cryptocurrencies or market dominance. The latter is the most relevant factor according to analysts. When the most popular cryptocurrencies lose space, it means that investors are more willing to invest in other different virtual currencies.
Of course, we could not make an accuracy of the altcoins season without mentioning the FOMO (Fear of Missing Out) effect. It is the metaphor of the little snowball that starts rolling that everyone wants to get into before hitting the wall.
We all wish we had the power to guess the future, but we can't. What we can do is analyze the future. What we can do is analyze the market to see if it's a good time to invest in altcoins and be clear about the reasons why.
4 motivating reasons to invest in altcoins
At the end of 2021, the altseason was said to be in full swing.
It is clear that Bitcoin is the most well-known cryptocurrency, but, from time to time, altcoins claim its prominence. We tell you why to invest in them:
- They are accessible to everyone. Being much cheaper than Bitcoin, Cardano or other popular cryptocurrencies, anyone can afford to invest in them.
- Volatility is lower than in other cryptocurrencies. In fact, during the COVID-19 pandemic we observed how the Bitcoin's decline caused many investors to increase their concern and start selling.
- It is very easy to start trading them. You just need a computer and internet connection to access in a matter of minutes.
- They present unique functions integrated beyond investment, because they are much more than a token. In fact, they are the engine of innovation in blockchain technology.
And above all, investing in altcoins is a good option because they may one day be at the top. When you invest in them, you have the advantage of increasing your profits the moment an altseason happens again. Because if there is one thing that is certain in the cryptocurrency market, it is that nothing is certain.
Like everything in life, altcoins also have drawbacks, such as scams or frauds. But this is a problem that can be avoided by following the guidelines of checking the veracity of the cryptocurrency before investing. Don't forget it.
Conclusions about altcoins
The Internet is littered with other cryptocurrencies convinced that they are more than an alternative to the cryptocurrency of all time. Knowing whether their value will go up or down is practically impossible, although many think that their power will dethrone the big cryptocurrencies in the coming years.
In any case, altcoins and popular cryptocurrencies have found a point of equilibrium thanks to the multiple applications they are bringing to society: from utility currencies that have inspired the application of smart contracts, to stablecoins that reinforce market liquidity.
Despite the extraordinary performance and contribution that altcoins provide to society, remember that the cryptocurrency market is variable. Major changes can occur from one moment to the next.
To a greater or lesser extent, all cryptocurrencies enable progress towards a common goal: a decentralized system. It is not competition, it is complementarity.