It is no longer debatable whether or not Blockchain is one of the most important pieces of technology ever devised in the last decade. It has enabled the transfer of value across the board and the storage of wealth leveraging cryptocurrencies. Bitcoin, as well as a whole lot of others, have come to existence solving numerous global challenges, which was nothing short of revolutionary.
While many people still confuse the terms crypto, blockchain, and Bitcoin, the reality is that while Bitcoin is still the most valuable cryptocurrency, there are now countless blockchain technologies attempting to solve a wide range of problems, from bankless transactions to monetizing art and gaming. Each of these blockchains or cryptocurrency projects issues its own token, which the crypto community has dubbed altcoins, in place of Bitcoin, which is the native token or currency of the Bitcoin blockchain.
What is the Altcoin Season?
Altcoin season (abbreviated as “alt season”) is a period in the cryptocurrency market when other coins surpass the market leader, Bitcoin. As a result, alt-season refers to any time in the market when most altcoins make more money than Bitcoin. The Bitcoin dominance ratio frequently drops lower than it was at the start of the season during this time.
When Bitcoin dominance (the amount of the total crypto market share held in Bitcoin) declines rapidly, it leads to an increase of investments in Altcoins, which causes an Altcoin season.
Due to this symbiotic relationship, the value of many altcoins is frequently linked to Bitcoin. As a result, the value of an altcoin is often measured in terms of Bitcoin’s price, therefore the price of altcoins may fall if Bitcoin’s price falls, and vice versa if Bitcoin’s price rises.
Altcoins, on the whole, tend to remain in a permanent state of bearishness or stasis, with prices hovering or falling. Again, every now and then, an alt or two will catch a trend or go on an incredible run (generally a pump) or (once or twice a year if we’re lucky), all Alts will “moon” at the same time or in rapid succession for a lengthy amount of time (for example a week, a few weeks, or even a month or two).
Though some, such as Ethereum’s Ether, are well-known, the vast majority of the more than 10,000 altcoins available have yet to make an impact. Altcoins are a good example of how cryptocurrencies have the ability to disrupt current finance. However, before investing in them, investors should conduct their homework.
In the cryptocurrency market, Bitcoin commands the lion’s share. BTC has about 40.99% of the market capitalization, while Ethereum has 20.65%. Binance Coin, on the other hand, has only 4% of the market, while Tether and Solana both have a little more than 2.5%. Cardano has a market cap of $2.10, whereas Rippe, Polkadot, Dogecoin, and USD Coin each have a market cap of 1%. Apart from that, the rest of the altcoin market accounts for 21% of the US$3 trillion economies.
Altcoins are the center of volatility in the cryptocurrency market. Although some claim that BTC is extremely volatile, the worst swings occur in the altcoin market. Many new investors rush to BTC because they are afraid of altcoin volatility and are unwilling to take the risk. Furthermore, there are no regulations because registration with the SEC is not required by law.
Will this be a Different alt-season?
There is a huge feeling in the market that we could see another alt season where most of the altcoins pump at once.
However, the coming alt season will be very different from the market trend in 2017 and 2018 according to Cointelegraph. While Bitcoin and Ethereum are gaining popularity, Layer 2 technology or appealing staking ecosystems could outperform mainstream tokens in 2022. Bitcoin and Ethereum are still on the decline, despite receiving institutional backing. Other altcoins, such as Cardano, Decred, and Dogecoin, are on the straight road without much noise.
However, not everything is well in the altcoin market. Litecoin and Bitcoin Cash underperformed in 2021 and are expected to do so again in 2022. Furthermore, the original ‘Ethereum Killers,’ such as Tron and EOS, have failed to deliver on their promises and have lost ground in the current year.
Nobody can forecast anything about the cryptocurrency market with any degree of accuracy. The anticipations may go incorrect at any step because it is highly variable and fluctuates based on internal mechanisms.
Fortunately, we’ve outlined numerous altcoins that, based on their underlying technology, use case possibilities, and prior trading patterns, could perform well. The following are a few of them.
Following its strong performance in 2021, Ethereum is projected to continue to grow in 2022 and beyond. The altcoin is expected to increase value thanks to Ethereum 2.0, which will include an energy-efficient proof-of-stake consensus function.
Cardano is a serious competitor to Ethereum in terms of network efficiency and Dapp production. It is the world’s largest and most successful blockchain platform based on the proof-of-stake consensus algorithm.
Solana is anticipated to become a prominent cryptocurrency around 2022, with a mix of proof-of-stake and proof-of-history techniques.
It is critical to sell your altcoins before Alt-season ends in order to maximize your profits. Alt’s prices have dropped as swiftly as they have risen.
However, your concerns pale in comparison to the potential rewards.