Categories: MarketsMenafn

What makes an altcoin valuable?

With Bitcoin becoming more mainstream, its value has soared. But what about all the other cryptocurrencies out there? We’ll discuss what it takes for a cryptocurrency to be valuable and how you can tell if an altcoin is worth your time.

Most altcoins are forks of Bitcoin with minor changes to its underlying code

Most altcoins, or alternative cryptocurrency coins, are forks of Bitcoin. An altcoin is extremely unlikely to surpass Bitcoin in market capitalization. In addition to being the first digital currency to gain popularity, Bitcoin has also maintained its dominance due to several key characteristics. These include:

  • Highest market capitalization
  • Greatest network effect (most developers, greatest user base)
  • Most secure blockchain
  • Highest liquidity among all cryptocurrencies

Altcoins usually don’t have any intrinsic value like Bitcoin

Bitcoin and other altcoins are digital currencies that are not backed by any central authority. Most of the time, “altcoin” refers to cryptocurrencies after Bitcoin. While there aren’t any hard-and-fast rules for what makes a cryptocurrency valuable, there are several important factors:

  • Altcoins aren’t backed by anything. Their price is entirely determined by how many people want them. In contrast, Bitcoin has an underlying utility in terms of being useful as a payment protocol or store of value (like gold).
  • The most widely used cryptocurrencies will always be considered more valuable than others.

Things to consider before investing in an altcoin

Before investing in an altcoin, you should consider the following:

  • The backstory of the developers. You want to ensure that the development team behind your chosen altcoin has a strong and consistent history of improving their cryptocurrency. Is it being actively developed? Does it have a diverse group of contributors? Do they have previous experience working together on other projects?
  • How many people are using it? If only a few thousand people use an altcoin, its price may be artificially inflated because of low supply and high demand. That is the case for virtually every altcoin that exists today and in the future.

An altcoin will have a different value than Bitcoin

One of the most critical factors in an altcoin’s value is how much Bitcoin it can be exchanged for. Most altcoins are not as valuable as Bitcoin, and less valuable means less demand for them. 

As we’ve seen, if you have less demand for something, it has a lower price. So the more supply of an altcoin there is—the more people who own or sell it—the lower its price will be.

Altcoins are generally less secure than Bitcoin because they don’t have a fixed supply like BTC. Nor do they have nearly as much market adoption or recognition worldwide.

Conclusion

Altcoins can be valuable, but they have a different value than Bitcoin. The market capitalization of an altcoin is mostly derived from speculation. 

If you want to invest in altcoins, some important things need to be considered before making any decisions.

The post What makes an altcoin valuable? appeared first on CryptoMode.

Jerry Rolon

After working for 7 years as a Internet Marketer, Jerry now aims to explore the journalistic side of Internet. With his impeccable knowledge in this domain, he churns out some of the best news articles from the internet niche. With respect to acedamics, Jerry earned a degree in business from California State University.

Recent Posts

VTrader Unveils AI-Powered Price Prediction Tool to Redefine Market Intelligence in Crypto Trading

Delaware, US, 18th July 2025, VTrader, an AI-native financial intelligence platform for digital asset markets,…

13 hours ago

ZARO Launches with Locked Liquidity, No Team Control, and Community-Owned Mascot

Road Town, British Virgin Islands, 17th July 2025, ZEX PR WIRE, ZARO has emerged as…

2 days ago

SyntecBiofuel Predicts Biofuels Market to Hit $208 B by 2030

Cambridge, UK, 17th July 2025, ZEX PR WIRE, SyntecBiofuel, a pioneer in sustainable bioenergy solutions, today…

2 days ago

Tradeview Markets Receives Multiple International Awards

Cundinamarca, Colombia, 16th July 2025, ZEX PR WIRE, Tradeview Markets is proud to announce its…

2 days ago

Zak Manhire Launches Mint. io: A Web3 Gaming Platform Driven By AI That Prioritizes Product Over Token

Marbella, Malaga, 14th July 2025, Serial entrepreneur and global strategist Zak Manhire has announced Mint.io,…

4 days ago

Bitcoin Hits New Highs Above $118,000, Triggers Massive Short Liquidations

Bitcoin reached over $118,000 in early July 2025. This quick rise led to $1.1 billion…

1 week ago