How to Buy Altcoins
Ready to diversify your portfolio? Then let's discover how to buy altcoins.
Cryptocurrencies offer plenty of ways to get involved in the market. At the time of writing, over 19,000 cryptocurrencies and dozens of blockchain platforms are traded on almost 600 exchanges worldwide.
New cryptocurrencies are emerging daily and pushing inferior cryptos far from the top. Even though it may seem shaky, the market is still constantly growing. More and more entrepreneurs, investors, companies, and even governments are resorting to crypto as a way to fight against recession. At the time of writing, BTC held just a little over 46% of the total market cap of all cryptocurrencies. A few years ago, this number was almost 75%. Bitcoin is hugely admired mostly by long-term holders. However, alternative coins or 'altcoins' are becoming more and more popular amongst short-term investors since their price is more prone to changes.
Altcoins come in various forms but finding the hidden treasure isn’t an easy task. The thing that makes certain altcoins more worthy – and attractive – is the possibilities they offer outside of BTC. Here are some popular altcoins by market cap.
Ethereum (ETH). First and foremost, ETH is a ledger technology on which users can build programs (DApps) and smart contracts. It has a more extensive supply and a quicker block processing speed.
Litecoin (LTC) - Known as Bitcoin's wingman, LTC shares similar features with the largest cryptocurrency but operates on a different algorithm. Cardano (ADA). Third-generation, decentralised proof-of-stake (PoS) blockchain platform made to be a more efficient alternative to proof-of-work (PoW) networks such as Ethereum Polkadot (DOT). DOT envisages aiding developers to construct their own blockchains and integrate them with each other
How to Buy Altcoins: Step-by-Step
To buy altcoins there are a few steps that need to be taken. There are many platforms on which you can buy altcoins. The process for buying may slightly differ, but the steps are mostly similar. While we’d recommend beginners to use exchanges to protect from fraud, advanced traders can purchase altcoins over-the-counter directly from owners.
Let’s get into the seven main steps of getting you altcoins
Step 1: Decide on the percentage of your crypto portfolio allocation Even though altcoins are risky, that doesn’t mean they aren’t worth investing in. Therefore, separating your portfolio into different risk layers is good, especially if you plan to play with not-so-famous coins.
Step 2: DYOR to find the best altcoin for your needs There are many factors to consider when buying an altcoin, such as wanting a brand name, wanting a native cryptocurrency or crypto that exists on a platform. It is also good to check if there is an official website and active subreddit of the specific altcoin you want to buy, what's the volume, is it supported by a wallet, and, of course, can it bring an actual profit.
Step 3: Exchange fiat to crypto Most exchanges don't support USD purchases, so it's essential to buy supported cryptocurrencies in order to exchange them for the desired altcoin. Some exchanges support depositing assets via credit cards, purchasing stablecoins, and then trading that for the altcoin.
Step 4: Choose an exchange
Finding more crypto exchanges that offer wanted trading pairs is of utmost importance.
Some important points to consider when selecting an exchange are their reputation, fee level, and are there any reports on previous hacking or bugs.
Step 5: Finding you a currency pair Connect your Web 3.0 wallet storing the altcoins to the exchange. Watch closely for the trends of the currency pair and its performance for some time (one to three months is optional) before executing the trade. That’s how you will make sure you make the trade at the best moment.
Step 6: Execute the transaction When you are ready to execute, go to the chosen exchange and place your order. If you are placing the order for the first time, take some time to learn more about how placing orders work for the desired altcoin.
Step 7: Put purchased altcoins into a wallet If you are buying to hold for the longer term, place your altcoins into the wallet. Remember, if there is only a tiny amount of altcoins, putting them into your wallet could lead you to lose since gas fees are usually high for the repeated transfer.
Author: Teuta Franjkovic
A sincere writer with a strong will to share knowledge on all things blockchain, crypto, metaverse and DeFi. Starting out as a writer with Cosmopolitan, Teuta has risen through the ranks of business journalism, editing newspapers and websites within the fintech industry for over 15 years. She holds a double MA in Public Politics and Entrepreneurship.