If you’re asking yourself how to buy altcoins, it’s essential to understand the background and context behind them. So, let’s take a moment to explore the history of altcoins before delving into the nitty-gritty of how to purchase them.
The growth of the cryptocurrency markets has seen numerous altcoins emerge to provide alternative coins to the industry’s mainstays. Blockchain technology pioneers have seen it grow from Bitcoin, the first fully decentralized digital currency, to the host of alternative crypto available in the market.
There are several cryptocurrency options for holders wanting to diversify their portfolios. Altcoins have become increasingly popular as the market seeks higher returns than what Bitcoin delivers.
In 2017, the ICO boom fuelled the rise of altcoins, which saw many exciting ventures in blockchain implement unique value propositions through their tokens. Distinctive smart contracts use cases with altcoin applications flooded the market following the bull run.
However, market events like the TerraLuna collapse and the crypto winter eliminated many weaker altcoins and failed experiments. Despite the shaking, altcoins buyers must be wary of the lurking rug pulls.
This article simplifies how to buy altcoins by providing a step-by-step guide from understanding to purchasing and storage solutions.
The term “Altcoin” refers to all cryptocurrencies apart from or that are not Bitcoin. In the cryptocurrency market, altcoins belong to an origin protocol, where their use case was defined during conception. Many altcoins result from forks (just straight-out copies that are no longer compatible with their origin), like Bitcoin cash – a cryptocurrency that is a fork of Bitcoin.
Altcoins accomplish various roles depending on their inspiration. They:
These listed roles also define the altcoin types. The main categories include digital currencies, utility, security, reward, asset and meme tokens.
Altcoins ultimately attempt to overcome the initial limitations of their origin blockchain in the world of cryptocurrencies. These coins feature in various decentralized applications as developers strive for a technological breakthrough to improve distributed ledger technology. Therefore, the first step in purchasing altcoins is understanding their underlying use case and their growth potential.
When buying crypto, the preliminary step before considering all other processes is conducting your own research. An adequate investigation into these assets will help your breeze through the first steps. Let’s dive in on how to buy altcoins:
As part of your research, determine your risk ceiling and compare it to the potential benefits. Prepare a plan by reading guides and reviewing other portfolio management material. Use software like portfolio trackers to help you plan your altcoin journey.
Buying crypto and deciding what altcoin works for you can be overwhelming with the numerous options. Create a filter to help sort through existing options.
While creating these considerations, also factor in security measures. Find out:
These steps will guide you to identify the coins that’ll work for you.
Your altcoin storage selection is crucial for your asset safety. Cryptocurrency wallets come in two options; hot or cold. The categories are based on their connection to the internet.
Hot wallets are connected to the internet and include options like CoinPayments.
Cold wallets are hardware devices without real-time web connectivity. Understanding these wallet options’ pros and cons will help your selection.
Unlike Bitcoin and Ethereum, most altcoins can’t be bought via a normal payment method like a debit card. To buy altcoins, you’ll have to set up a crypto wallet, which is like a bank account for your coins, and purchase bitcoins or other digital currencies which you can use to swap for your desired altcoin.
Various wallet options exist with different specializations and auxiliary services. Platforms like CoinPayments allow users to hold numerous (2,305+) cryptocurrencies, convert* crypto (buy altcoins) via a third-party and purchase gift cards.
It’s also crucial to separate your altcoin wallet from your Bitcoin wallet for asset management. Crypto wallets have various pros and cons which the user can leverage for tailored cryptocurrency control.
While setting up your wallet, consider your account security using two-factor authentication (2FA) methods to protect your assets from nefarious actors. Keep your wallet address safe by using it only on trusted crypto platforms.
After you exchange fiat currency for Bitcoin and securely store it, you need to find an altcoin exchange that supports most trading pairs with BTC. Experienced traders and successful traders understand the market dynamics and can trade anywhere as they know the risks; however, if you’re new to the altcoin exchange, it’s best to use established platforms.
Consider the following when selecting a crypto exchange:
The Binance platform can be a safe starting point as you identify the best exchange for your needs.
Once your Bitcoin or stablecoin is transferred to one of the cryptocurrency exchanges of your choice, you’ll identify the suitable crypto assets to exchange Bitcoin for your preferred altcoin.
If you own lesser-known altcoins or new coin, finding the appropriate trading pair may be difficult depending on the cryptocurrency exchange platform of your choice.
Ensure you understand how the exchange account operates before committing your assets. Learn how to buy altcoins and all the processes involved in acquiring them. Ensure you have the transfer fees in your wallet before initiating the transfer. Once everything is in place, order your altcoins.
Once you’ve purchased the chosen cryptocurrencies, send them to the CoinPayments wallet for safe storage. Move the altcoins to your wallet if you intend to hold them or plan on selling altcoins in the future.
Once you know how to buy altcoins, you can start exploring the market to find the best altcoin exchange to diversify your portfolio. If you decide to sell altcoins, these exchanges will give access to lucrative swap deals.
Network with altcoin traders to discover how they deposit money into their accounts by simply trading. Identify new coins in the market and their potential market yields based on the asset functionality.
With enough market experience, you can discover the best crypto exchange to satisfy your altcoin ambitions.
Want to stay ahead of the curve? You can integrate blockchain-based payments in your business easily. Open a CoinPayments account today and enjoy 0.5% low fees and instant transactions.
DISCLAIMER: The information provided in this article is for educational and informational purposes only and should not be construed as financial or investment advice. Readers should conduct their own research and due diligence before making investment decisions. It’s recommended to consult with a licensed financial advisor or professional before investing in cryptocurrencies or any other financial instruments.
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