Altcoin
An altcoin is any cryptocurrency other than bitcoin.
Bitcoin came first; everything else got lumped together as 'altcoins'. The label covers thousands of very different projects with very different risks.
- Category
- Cryptocurrency and Blockchain
- Reading time
- 2 min
- Also called
- Alternative coin, Alt, Non-bitcoin crypto
- Updated
Altcoins in plain words
Any cryptocurrency other than Bitcoin — whether a spin-off or a competitor — is usually called an altcoin.1
Even in 2015 the ECB counted around 500 such crypto-currencies, and rising.1
The IMF tracks the broader altcoin market separately from Bitcoin and Ether.2
How to assess an altcoin
Classify it
Decide if it is an offshoot of or alternative to Bitcoin.1
Check history
Early leaders included Ripple, Litecoin and Dogecoin.1
Compare performance
Altcoins can move differently from Bitcoin.2
Assess survival
The ECB said it was too early to tell their future.1
Check liquidity
Look at volume and order book.
Size small
Use position sizing for volatility.
Worked examples
Example 1 — Relative return
Altcoins +$174 moreA hypothetical portfolio holds $1,000 Bitcoin and $1,000 altcoins; Bitcoin rises 39.1%, altcoins 56.5%.
| Bitcoin | $1,000 × 1.391 = $1,391 |
| Altcoins | $1,000 × 1.565 = $1,565 |
These are the percentages the IMF reported for one period.2
Example 2 — Downside
−$800A hypothetical altcoin bought at $2 falls 80%.
| New price | $2 × 0.2 = $0.40 |
| Loss on 500 coins | 500 × $1.60 = $800 |
Many altcoins' futures were uncertain from the start.1
Example 3 — Sizing
$500 positionWith $10,000 and a 2% risk cap, an altcoin with a 40% stop distance:
| Risk budget | $10,000 × 2% = $200 |
| Position | $200 ÷ 40% = $500 |
Sizing small reflects how uncertain altcoins' futures are.1
Bitcoin vs altcoins
| Aspect | Bitcoin | Altcoins |
|---|---|---|
| Number | One | Thousands |
| Liquidity | Deepest | Varies widely |
| Volatility | High | Often higher |
| Survival risk | Lower | Many fail |
How traders use altcoins
Diversification
Some use altcoins for Diversification, though correlation is high.
Momentum trades
Trade Momentum in strong markets.
Pairs
Trade vs Bitcoin as a Trading Pair.
Sizing
Apply strict Position Sizing.
Advantages and disadvantages
Advantages
- Wide choice of projects.
- Potential for larger moves.
- Different features from Bitcoin.
- Many trading pairs.
Disadvantages
- Higher volatility.
- Thin liquidity for many.
- Many projects fail.
- Scams are common.
Going deeper
Read as far as you need. Each level builds on the one before it.
Common mistakes
Treating all alike
Very different projects.
Oversizing
Volatility wipes out accounts.
Ignoring liquidity
Hard to exit.
Chasing pumps
Late entries.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Altcoin = any crypto other than Bitcoin.
- Thousands exist.
- Often more volatile.
- Many fail.
- Size positions carefully.
Frequently asked questions
Are stablecoins altcoins?
Are altcoins riskier than Bitcoin?
How many altcoins are there?
Further learning
- Market Capitalisation
Sizing a project.
- Volatility
Price swings.
- Position Sizing
Controlling risk.
- Liquidity
Getting out.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- European Central Bank. Virtual currency schemes – a further analysis (2015) (opens in a new tab) Checked .
- International Monetary Fund. Crypto Assets Monitor (2026) (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.