What is an altcoin in crypto?
An altcoin is any cryptocurrency other than Bitcoin. The word is short for “alternative coin”, and it covers everything from Ethereum and stablecoins to meme coins and thousands of small tokens that may never become popular. For you as an investor, the label matters less than what a specific altcoin does, who is behind it, and how much of its value could disappear.
What is an altcoin in crypto?
An altcoin in crypto is every coin or token that isn’t Bitcoin. Bitcoin launched in 2009 as the first cryptocurrency; every project that came after it is an “alternative” in the crypto market, whatever it is designed to do.
The first altcoins appeared in 2011. Namecoin is often called the first altcoin, and Litecoin followed later that year as a faster, lighter version of Bitcoin. Since then, many altcoins have launched, and many have also disappeared. Nobody knows exactly how many altcoins exist, because new tokens appear every day and most never trade on a large exchange.
Some people use “altcoin” only for coins with their own blockchain, and call coins built on another network a crypto token. In everyday use, and on exchanges, both count as altcoins.
Why do altcoins exist?
Altcoins exist because developers wanted to fix specific problems with Bitcoin or build something it can’t do. Bitcoin is deliberately simple and slow to change, so new features usually arrive as new coins rather than as Bitcoin upgrades.
Altcoins serve a range of goals:
- Faster transactions and lower transaction fees, for example Litecoin.
- Programmable money. The Ethereum blockchain added smart contracts, so developers can build decentralized applications (dApps) without a central authority.
- Stable prices. Stablecoins track a fiat currency such as the US dollar or the euro.
- A different consensus mechanism. Many altcoins use proof of stake instead of energy intensive proof of work mining. The Ethereum network itself switched to proof of stake in 2022.
- Privacy. Privacy coins hide who sends what to whom.
Types of altcoins
The main types of altcoins are listed below. A single coin can fit more than one category, and the categories matter for how EU rules treat them.
| Type | What it does | Example |
|---|---|---|
| Platform coins | Native token of a blockchain that runs smart contracts | Ether (ETH), Solana (SOL) |
| Payment coins | Digital money, often a variation on Bitcoin | Litecoin (LTC), Bitcoin Cash (BCH) |
| Stablecoins | Track the value of a fiat currency | USD Coin (USDC) |
| Utility tokens | Give access to a service or app | Exchange tokens, network fee tokens |
| Governance tokens | Let holders vote on a project’s rules | DeFi protocol tokens |
| Security tokens | Represent shares, debt or other securities | Tokenised bonds |
| Meme coins | Driven by community and jokes, little or no utility | Dogecoin (DOGE) |
| Privacy coins | Hide transaction details | Monero (XMR) |
Stablecoins
Stablecoins are altcoins designed to hold a steady value, usually one US dollar or one euro. Traders use them to park funds between trades. In the EU, MiCA’s rules for stablecoins have applied since 30 June 2024, so licensed exchanges may only offer stablecoins whose issuers meet those rules.
Meme coin
A meme coin is an altcoin whose price depends almost entirely on attention and social media. Some have grown very large, but prices can collapse just as quickly. Treat them as speculation, not as an investment with a business behind it.
Security tokens and utility tokens
Security tokens represent a real financial claim, like a share or a bond. In the EU they count as financial instruments under investment law, not as ordinary crypto. Utility tokens only give access to a product or service. In the US, the Securities and Exchange Commission has argued that certain altcoins are securities, which shows how blurry the line can be.
Altcoin vs Bitcoin: what’s the difference?
The main difference between Bitcoin and an altcoin is purpose and track record. Bitcoin is designed as scarce digital money with a fixed limit of 21 million coins. Altcoins are everything else, and their supply rules, technology and goals vary widely.
| Bitcoin | Altcoins | |
|---|---|---|
| Launched | 2009 | 2011 onwards |
| Supply | Capped at 21 million | Varies: capped, inflating or managed |
| Main use | Store of value, payments | Smart contracts, stablecoins, apps, speculation |
| Market capitalization | Largest single coin | From very large to almost zero |
| Price swings | Volatile | Often far more volatile |
Market cap and Bitcoin dominance
Market cap (market capitalization) is a coin’s price multiplied by its circulating supply, and it’s the usual way to rank coins. Bitcoin dominance is Bitcoin’s share of the total market cap of all cryptocurrencies. When Bitcoin dominance falls because altcoins rise faster, traders talk about “altcoin season”; when Bitcoin leads, people call it “Bitcoin season”. When the next altcoin season comes is anyone’s guess.
How to buy altcoins in the EU
To buy altcoins in the EU, use a crypto exchange that holds a MiCA licence. Since 1 July 2026, only MiCA-authorised platforms may offer crypto services to EU residents, and the licence covers how they store your coins and which tokens they can list.
Before you buy, check these points:
- Is it listed on a licensed exchange? Many altcoins are only traded on offshore platforms, which means no EU regulator to turn to.
- Read the white paper. Under MiCA, most new tokens offered to the public in the EU need a crypto-asset white paper explaining the project and its risks.
- Look at trading volume. Low volume means wide spreads and difficulty selling.
- Check the token supply. A large share held by the team or still to be released can push prices down later.
- Watch for red flags. Promises of fixed returns, anonymous teams, and pressure to buy fast.
Our pick of exchanges for altcoins only includes platforms licensed for EU residents.
Risks of investing in altcoins
The biggest risk of investing in altcoins is that many lose most or all of their value. Smaller coins have less liquidity, fewer users and a higher chance that the project simply stops.
A worked example shows why losses hurt more than gains help. Put €100 into a small altcoin and let it fall 90%: you have €10 left. To get back to €100, it now needs to rise 900%. Growth potential exists, but so does that maths.
Keep in mind:
- Crypto is not covered by investor compensation. If an exchange fails, the EU’s investor compensation schemes don’t cover crypto-assets.
- Tax still applies. In the Netherlands, your altcoins count towards box 3 assets on 1 January. In some countries, such as Germany, swapping one altcoin for another can count as a sale.
- Diversify with care. Ten small altcoins are not ten times safer than one; they often fall together.
Read more about Bitcoin, Ethereum, stablecoins and market cap, and always do your own research.
The bottom line
An altcoin is simply any cryptocurrency that isn’t Bitcoin, from major platforms like Ethereum to tokens that exist for a week. Judge each one on its own: what problem it solves, where it trades, and whether you could live with losing what you put in.
Related terms
Questions people ask
Is Bitcoin an altcoin?
No. Bitcoin is the original cryptocurrency, and "altcoin" means every coin that isn't Bitcoin. Forks of Bitcoin, such as Bitcoin Cash, do count as altcoins.
Is XRP an altcoin?
Yes. XRP is not Bitcoin, so it is an altcoin, like Ethereum, Solana and every other cryptocurrency apart from Bitcoin.
What is an example of an altcoin?
Ethereum is the best-known example: it runs smart contracts and decentralized applications. Other examples are stablecoins such as USD Coin, meme coins such as Dogecoin, and Litecoin, one of the oldest altcoins.
Is it better to buy Bitcoin or altcoins?
Neither is better for everyone. Bitcoin has the longest track record and the largest market cap, while altcoins can rise or fall much faster. Many beginners start with Bitcoin and only add altcoins they understand, in amounts they can afford to lose.
What's the difference between Bitcoin and an altcoin?
Bitcoin is designed as digital money with a fixed supply of 21 million coins. Altcoins are everything else: some copy Bitcoin with tweaks, others add smart contracts, stable prices or completely different goals.