Over recent years, cryptocurrencies have surged in popularity, creating a whole new financial sector and infrastructure, while virtually revolutionising finance and commerce as we once knew it. On top of this, crypto has also provided an exciting and versatile framework for new technologies and innovations to arise.
Within the booming world of crypto, altcoin season has become a term that is frequently used to describe a certain period when the prices of altcoins are known to outperform even Bitcoin. Such periods can prove to be incredibly lucrative for the knowledgeable and savvy crypto trader.
Read on to learn the basics of what altcoin season is, and how it can potentially benefit you and your crypto portfolio.
Altcoin is a common and popular term in cryptocurrency and is basically short for alternative coin. Generally, it refers to all cryptocurrency that is not Bitcoin, which remains the leading type of cryptocurrency by a substantial margin.
Bitcoin is also the oldest crypto, and since it was first created, thousands of new altcoin cryptocurrencies have been invented. Many of the most successful altcoins such as Ethereum, offer various new and useful features, while others are designed for specified purposes. Sometimes, cryptos may provide improvements like faster transactions, lower fees, greater privacy, or better smart contracts.
Examples of the most popular choices of altcoins for traders include the following:
These coins, however, are just the tip of the iceberg when it comes to the sheer number of other altcoins out there, and swiftly becoming available with every passing day. Many of the newer and more obscure altcoins, however, should be approached with caution and well researched before buying or trading in them. Some may well be scams or else can lack the useful features of the more established altcoins.
Unfortunately, altcoin season isn’t a regular clockwork event that traders can rely on happening at a particular time. Rather, it is used as a term to describe any period where altcoins collectively out-perform Bitcoin and overtake BTC’s market cap. When this happens, altcoin season is said to have begun, attracting multitudes of crypto investors seeking to diversify their portfolios. Investors and traders also tend to be in a great mood during altcoin season, giving it a favourable reputation as a time of plenty.
While it may be difficult to pinpoint a direct single cause for every altcoin season that may occur, as many do differ, there are generally four major factors that are known to bring it about.
This is the most simple, obvious, and logical explanation for altcoin season, and while it’s not always the case or the only factor, it is likely the most common cause. When Bitcoin’s value decreases, all other coins tend to automatically increase in value by default as the traders’ interest shifts to altcoins.
Historically, BTC has always maintained a longer period of stability after a notable upward trend than other cryptocurrencies. During such times of stability, high BTC prices generally also tend to drive traders towards altcoins. Often this will happen just as BTC begins to fall again, making it a definite contributing factor to altcoin season.
In addition to the huge variety of altcoins that are available, there are also a growing number of popular and useful crypto tools and services becoming available for traders. These include decentralised finance services, commonly known as DeFi tools and dApps, as well as other popular crypto assets like NFTs. Otherwise, web3 is also often cited as a possible cause.
In 2020, it was the introduction of DeFi technology that is said to have sparked it off. And in 2021, NFTs were taking the world by storm, resulting in a subsequent altcoin season. The widespread implementation of Web3 technology in 2022 is believed to have had a direct effect.
The establishment of web3, which is a collective term for the next generation of internet technology and infrastructure, is expected to have a notably beneficial impact in general on crypto. Though it can be particularly beneficial when it comes to events such as altcoin season. This is because web3 allows for far greater speeds, stability, and interconnectivity over the internet, all of which aids the success of crypto as well as the altcoin season.
Altcoin season is often described as being bullish, which is a term used in the finance world for periods of notably high optimism and good cheer. Perhaps for some, it is the expectation of reward, or the excitement of new opportunity for others. Either way, the appetite for investment and risk-taking tends to skyrocket as soon as altcoin season is even mentioned.
With the above facts in mind, there are a few signs that experienced crypto traders will generally look out for that can indicate that an altcoin season is imminent. These include:
Keeping in touch and up to date with crypto news, however, can often be enough to at least catch it at the start. Getting in early can be beneficial but it won’t necessarily guarantee any extra level of success.
Altcoin season can bring several major benefits to crypto traders and investors, as well as the crypto markets alike. These benefits generally include:
In a nutshell, the best way to prepare for altcoin season is to simply keep your eyes and ears open. Check the crypto trends and news on a regular basis, particularly during bull runs. Try not to jump the gun though until you are certain. As mentioned, altcoin season is not definite, until it happens, and that may be for varying reasons. Altcoins also vary in potential and risk.
Due diligence and thorough research are the greatest ways to help make sure that you are ready to jump into action when it happens. Otherwise, keeping well-informed is generally the best way to ensure success in all altcoin trading, whether it is during altcoin season or not.
Altcoin season is a highly anticipated and potentially lucrative event for altcoin traders and investors. However, as we’re discussing here, there are also certain risks that accompany altcoins regardless of when they’re bought or traded. It is also unlikely that any individual altcoin will replace Bitcoin as the dominant cryptocurrency any time soon.
On the other hand, collectively, altcoins and altcoin season are definitely worth the attention they are receiving from traders and investors. Whether or not altcoins suit you and your crypto investment portfolio is something that only you can answer.
Otherwise, crypto in general continues to evolve and alter the world’s economy and markets, providing exciting new opportunities and greater benefits and features like faster and more improved security. In the future, it may eventually replace centralised systems completely, or something even better may replace it. For the foreseeable future though, most experts, even those that were previously doubtful of crypto, will agree that it’s here to stay.
The duration of an altcoin season will generally vary and can be anywhere from several weeks to months at a time. Various market factors and other surrounding aspects make it difficult to predict the exact length as it happens.
Ethereum is usually the most popular and top-performing crypto next to Bitcoin. Although other altcoins, particularly those with a robust platform, a solid development team, and a clear use-case, are also well worth looking at.
Investing in altcoin during altcoin season can clearly be highly profitable, which is why so many investors and traders flock to it each time it happens. However, this doesn’t change certain risks involved with altcoin. Altcoins are well-known for their volatility and may rise and fall unexpectedly. In the latter instance, investments can go downhill very quickly. The altcoins’ performance during altcoin season may also vary, so it’s worth keeping this in mind.
Though it may seem unlikely considering all the above, and how Bitcoin’s success appears to be a major factor, nevertheless it can and does occasionally happen. Arguably though, it’s more like an over-lapping transitional period than an actual altcoin season itself.
One day, perhaps, an altcoin may rise to take the throne. However, for the foreseeable future, Bitcoin will likely remain on top. Nothing lasts forever though, and as altcoin seasons become steadily more frequent and lengthier, we could eventually see Bitcoin toppled.
There is no particular e-wallet that traders prefer to use during alt season. However, a wallet supporting multiple altcoins is always a good recommendation. Usually, it will depend on a traders own personal preferences and needs. There are a huge range of different e-wallets that you can choose from, supporting a wide range of cryptocurrencies, and often also including useful services.
Otherwise, some of the most popular e-wallets used by traders during altcoin season include the following:
o Exodus – a popular desktop browser and mobile compatible e-wallet that supports 100+ cryptocurrencies. This includes the most popular altcoins.
o Trezor – a popular cold wallet made for Bitcoin which can also support over 1,000 other cryptocurrencies.
o Ledger Nano S – a popular hardware wallet that supports over 1,500 cryptocurrencies.
o MyEtherWallet – a popular Ethereum-based wallet made to store mainly Ethereum and ERC-20 tokens. You can, however, store other altcoins too.
o Atomic Wallet – a free Ethereum-based wallet that supports over 500 cryptocurrencies.
