Are Altcoins Slowly Taking Over the Cryptocurrency Market?

Analytics Insight explains why Altcoins are slowly taking over the cryptocurrency market

Altcoins are known as the best alternative cryptocurrencies after the successful case of Bitcoin with an aim to target drawbacks of Bitcoin and provide better alternatives to multiple new versions in the cryptocurrency market. But it has been observed that Altcoins are slowly taking over the cryptocurrency market because recently the market reached the US$2 trillion thresholds since May 2021 as Altcoins also joined Bitcoin. According to investors, Bitcoin is losing some dominance in the global cryptocurrency market due to the emergence of Altcoins like Ripple, Polkadot, XRP, Cardano, and many more. Bitcoin as well as Ethereum market share is constantly declining since the introduction of multiple Altcoins.

Altcoins are thriving in the cryptocurrency market and successfully attracting the eyes of professional investors for gaining higher ROI in the nearby future. It is well-known that prices of cryptocurrencies such as Bitcoin, Dogecoin, and many others depend on some cryptic tweets from the most popular cryptocurrency influencer, Elon Musk. There are sudden hits and drops in the prices, making the cryptocurrency market highly volatile and risky to invest in. Thus, investors have started eyeing the proof-of-stake method that reduces energy consumption including the time to create a blockchain for seamless transactions across the world. Investors prefer higher ROI than a massive loss in their digital wallets in a year through eco-friendly digital coins.

The cryptocurrency market is experiencing the advantages of Altcoins for investors to reap the benefits of smart functionalities such as enhancements of Bitcoin flaws including speed or mining cost, create space or new competitions to Bitcoin system as well as much secured blockchain provides lesser transaction fees. Altcoins can be more than just cryptocurrencies; they can be developed into new frameworks including messaging applications as well as online marketplaces. There are Stablecoins, such as Libra and Tether, designed to defend against the volatility of multiple cryptocurrencies. But Tether is also known as a digital token because it is built on the Ethereum blockchain.

The constant advancements in cutting-edge technologies have started affecting the demand for cryptocurrencies like Bitcoin. Each Altcoin is different from one another like content creators can work on licensing on Po.et, speedy payments through Ripple or Dash because these are created to make cross-border transactions seamless as well as to process one transaction per second respectively.

Though blockchain technology is used in both Bitcoin and Altcoins, there is a small difference between the applications. There are multiple kinds of consensus mechanisms to validate transactions and create blocks for recording minute details of valuable transactions across borders. Smart contracts perform mutual agreements between two parties automatically and efficiently. Altcoins are also known as utility tokens and security tokens for better anonymity.

Despite having a few drawbacks, investors have started paying heed to Altcoins over Bitcoins. Thus, it can be speculated that Altcoins are gradually taking over the cryptocurrency market while maximizing profit and minimizing potential risks. A report revealed that Altcoins have taken more than 40% of the cryptocurrency market till April 2021. According to CoinMarketCap, there are over 11,000 kinds of Altcoins present in the cryptocurrency market.