# Altcoins > Altcoins are cryptocurrencies other than Bitcoin, from smart contract platforms to memecoins. Learn the main types, how to evaluate them and the risks. Source: https://learn.tradelabsai.com/crypto/altcoins/ Track: Crypto · Level: Beginner · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Altcoins", https://learn.tradelabsai.com/crypto/altcoins/ Altcoins, short for alternative coins, are cryptocurrencies other than Bitcoin. There are thousands of them, ranging from large smart contract platforms like Ethereum and Solana to stablecoins, exchange tokens, DeFi governance tokens and memecoins with no purpose beyond speculation. Altcoins can rise much faster than Bitcoin in bull markets and fall much further in bear markets. Many have failed entirely. Learning to tell the difference between projects with real use and pure speculation is a core skill for crypto traders. ## Main types of altcoins | Type | Examples | Purpose | |---|---|---| | Smart contract platforms | Ethereum, Solana, Avalanche, Cardano | Run applications and tokens | | Stablecoins | USDT, USDC | Hold a stable value, usually $1. See [Stablecoins](https://learn.tradelabsai.com/crypto/stablecoins/) | | Exchange tokens | BNB | Fee discounts and ecosystem uses on exchanges | | DeFi tokens | UNI, AAVE | Governance or fee sharing in protocols. See [DeFi Basics](https://learn.tradelabsai.com/crypto/defi-basics/) | | Layer 2 tokens | ARB, OP | Governance of Ethereum scaling networks | | Payment coins | XRP, LTC | Fast or cheap transfers | | Oracle and infrastructure | LINK | Data and services for blockchains. See [Oracles](https://learn.tradelabsai.com/crypto/oracles/) | | Memecoins | DOGE, SHIB and many newer tokens | Community and speculation | ## Bitcoin dominance Bitcoin dominance is Bitcoin's share of total crypto market value. When dominance falls, altcoins are outperforming, sometimes called "alt season". When dominance rises, money is concentrating in Bitcoin, which often happens in uncertain markets. **Example: Altcoin beta** During the 2021 bull market, Bitcoin roughly doubled from January to its November peak, while some altcoins, such as Solana, rose more than 100 times from their 2020 lows. In the 2022 bear market, Bitcoin fell about 77% from its peak, while Solana fell about 96% and many smaller tokens lost nearly all their value. Altcoins often behave like leveraged versions of Bitcoin. See [Position Sizing](https://learn.tradelabsai.com/risk/position-sizing/). ## How to evaluate an altcoin | Question | Why it matters | |---|---| | What does the network or token do? | Real usage supports long term value | | Who uses it, and how much? | Look at active users, transactions and fees. See [On-Chain Analytics](https://learn.tradelabsai.com/crypto/on-chain-analytics/) | | Does the protocol earn revenue? | Revenue and fee capture. See [Tokenomics and Protocol Revenue](https://learn.tradelabsai.com/crypto/tokenomics-and-protocol-revenue/) | | What is the supply schedule? | Inflation and token unlocks can dilute holders. See [Token Unlocks and Vesting](https://learn.tradelabsai.com/crypto/token-unlocks-and-vesting/) | | Who holds the tokens? | Heavy insider concentration is a risk | | How liquid is it? | Thin markets mean wide spreads and slippage. See [Liquidity](https://learn.tradelabsai.com/markets/liquidity/) | | Is the team credible and the code audited? | Reduces risk of failure or exploits | | What is the fully diluted valuation? | Price times total eventual supply | ## Market cap vs fully diluted valuation ``` market cap = price × circulating supply fully diluted valuation (FDV) = price × maximum or total supply ``` A token with a small circulating supply and a large FDV may face heavy selling as locked tokens unlock. ## A simple research routine Before buying an altcoin, write down in one paragraph what the project does and why the token should gain value if it succeeds. Then check usage data, the unlock calendar, the largest holders and where most trading volume happens. If you cannot answer these questions, treat the position as a speculation and size it accordingly. ## Where altcoins trade - **Centralised exchanges** list larger tokens with deeper liquidity. - **Decentralised exchanges** list almost anything, including brand new tokens. See [Centralized vs Decentralized Exchanges](https://learn.tradelabsai.com/crypto/cex-vs-dex/). - **Perpetual futures** on many altcoins offer leverage, adding liquidation risk. See [Perpetual Futures](https://learn.tradelabsai.com/crypto/perpetual-futures/). ## Risks - **Extreme volatility** and sharp drawdowns. - **Project failure:** many tokens from previous cycles are now worthless. Terra's LUNA collapsed from about $80 to almost zero in May 2022. - **Low liquidity** and manipulation, including pump and dump schemes. See [Market Manipulation](https://learn.tradelabsai.com/industry/market-manipulation/). - **Rug pulls:** developers abandon projects and take investors' money. See [Identifying Trading Scams](https://learn.tradelabsai.com/start-here/identifying-trading-scams/). - **Regulatory risk:** some tokens may be treated as securities. - **Dilution** from unlocks and high inflation. ## Frequently asked questions ### What is an altcoin? Any cryptocurrency other than Bitcoin, including smart contract platforms, stablecoins, DeFi tokens and memecoins. ### Are altcoins riskier than Bitcoin? Generally yes. They tend to be more volatile, less liquid and more likely to fail. ### What is alt season? A period when altcoins strongly outperform Bitcoin, usually shown by falling Bitcoin dominance. Next, learn how blockchains actually work in [Blockchain Basics](https://learn.tradelabsai.com/crypto/blockchain-basics/). ## Continue learning - Next lesson: [Blockchain Basics](https://learn.tradelabsai.com/crypto/blockchain-basics/) - Previous lesson: [Ethereum](https://learn.tradelabsai.com/crypto/ethereum/) - Related: [Ethereum](https://learn.tradelabsai.com/crypto/ethereum/): Ethereum is a programmable blockchain that runs smart contracts, with ether (ETH) as its native asset. Learn how it works, proof of stake, gas and price drivers. - Related: [Bitcoin](https://learn.tradelabsai.com/crypto/bitcoin/): Bitcoin is the first and largest cryptocurrency, with a fixed supply of 21 million coins. Learn how it works, halvings, what moves its price and how to trade it. - Related: [Tokenomics and Protocol Revenue](https://learn.tradelabsai.com/crypto/tokenomics-and-protocol-revenue/): Tokenomics covers a token's supply, demand and value capture. Learn fees vs revenue, buybacks and burns, valuation ratios and how to spot weak token designs. - Related: [Token Unlocks and Vesting](https://learn.tradelabsai.com/crypto/token-unlocks-and-vesting/): Token unlocks release locked tokens held by teams and investors on a schedule. Learn vesting terms, cliffs, how unlocks can pressure prices and how to research them. - Related: [Liquidity](https://learn.tradelabsai.com/markets/liquidity/): Liquidity is how easily you can trade without moving the price. Learn the signs of a liquid market, how illiquidity costs you and when liquidity disappears.