What is Altcoin?

Where the term comes from

Started simply: "alt" as in alternative coin to Bitcoin. Litecoin (2011), Namecoin (2011), and dozens of others through 2014–2016 were the original altcoins. Ethereum's 2015 launch is sometimes treated as the moment "altcoin" expanded from "Bitcoin clone" to "any non-BTC chain."

The category has evolved with the market. By 2024, "altcoin" usually doesn't mean ETH (it's its own category — sometimes called "ETH and friends" or "majors"). It typically means everything past the top 10–20 by market cap.

Example

Tiers people informally use:

• Bitcoin — its own category
• ETH and major L1s (SOL, AVAX, etc.) — increasingly treated as separate from "altcoins"
• "Mid-cap alts" — top 50–200 by market cap, mostly DeFi tokens, infrastructure plays, layer-2s
• "Low-cap alts" / smaller alts — below that, where token quality is mixed
• Shitcoins — the bottom tier where most are explicit memecoins or scams

"Altseason" is the cyclical pattern where capital rotates from BTC into smaller tokens, often after a BTC rally peaks. Returns are higher and so is the volatility — many alts go up 5× then back to 0.5× the starting price within six months.

Why it matters

How you think about "altcoins" shapes how you allocate. A few honest framings:

• For long-term holders: BTC and ETH are the only assets with a track record across multiple cycles. Allocating to alts means accepting both higher upside and meaningful chance of permanent loss.
• For traders: Alts have wider spreads, thinner liquidity, and bigger moves — both better setups and bigger draw-downs.
• For builders: "Investing in altcoins" sometimes means buying the governance token of a protocol you actually use. That's a different exercise from chasing a memecoin pump.

The mistake to avoid: treating a top-100 listing as a quality signal. Coingecko/CMC track every traded token, including ones that are pure pump vehicles. Look at usage metrics, code activity, and team rather than market cap rank when picking alts to actually hold.