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Bitcoin is the most popular cryptocurrency. But every now and then, altcoins claim the spotlight during the so-called “Altcoin season”. The majority of the top altcoins, such as Ethereum (ETH), Cardano (ADA) or Ripple (XRP), have seen significant price jumps as well as increased trading volumes in recent weeks. Read on to find out what this might mean for you.
What are altcoins?
It is very simple: every crypto, coin or token other than Bitcoin. You’ve probably already heard of the top ones: Ethereum, XRP, Tether, Polkadot or Cardano. Of course, our very own BEST (Bitpanda Ecosystem Token) and Pantos (PAN) are also classified as altcoins!
What happens during Altcoin season?
Generally speaking, during Altcoin season, Bitcoin tends to lose some of its dominance in the crypto market to Altcoins. You can see this displayed in a chart format here. In other words, the market cap of Bitcoin decreases compared to the overall market capitalisation of other crypto assets on the market. The market cap metric is used to illustrate the “size” of a crypto asset relatively often, and is mostly set by multiplying the price of an asset with the circulating supply.
There are certain calculations out there that attempt to determine the beginning and the end of Altcoin season through percentages and numbers. The reason why none will be discussed in this article is because they lack any objective basis and can therefore be very misleading. Just remember, whenever altcoins are the talk of the town, it’s an indicator Altcoin season is here.
Why does Altcoin season happen?
It is virtually impossible to tell exactly what causes Altcoin season. However, the generally-accepted idea is that after a Bitcoin bullrun (or at least the signs of it), investors tend to sell some of their BTC to realise their gains.
Then, they seem to be buying altcoins with some of these profits, which could naturally lead the prices of various altcoins to go up.
Other driving factors behind this particular Altcoin season might include the Dogecoin hype that happened 2 months ago, the NFT craze that is still ongoing and the recent news surrounding the XRP-SEC lawsuit. As you can see, it’s hard to connect it to singular events.
What are the most popular altcoins right now?
On a global scale, in terms of coins with the biggest market cap, Ethereum (ETH), Polkadot (DOT) and Cardano (ADA) have been trending recently. When it comes to coins with smaller market caps, Bitpanda Ecosystem Token (BEST) and Pantos (PAN) both have experienced changing movements recently, as well as Chiliz (CHZ), Komodo (KMD) and 0x (ZRX).
Which altcoins should you invest in?
If we could predict the price movements, we would be very happy to tell you what will happen. Unfortunately, we can’t. If you believe you can, then you already have the answer to this question.
On the other hand, if you are like us and can’t predict the future, but don’t want to miss out on the next big Altcoin gains either, you should check out the world’s first real crypto index, offered by Bitpanda, where you can choose from indices representing the top 5, top 10 and top 25 cryptocurrencies.
Are you ready to be part of Altcoin season? Start trading altcoins on Bitpanda today!
This article does not constitute investment advice, nor is it an offer or invitation to purchase any digital assets. Please note that an investment in digital assets carries risks in addition to the opportunities described above.