An altcoin is any cryptocurrency other than Bitcoin. The word is short for "alternative coin," and it covers everything from Ethereum, the second-largest crypto by market cap, down to a memecoin that launched last week. If a token isn't Bitcoin, traders call it an altcoin, no matter how big or small it is.
There are more than 20,000 cryptocurrencies tracked across major platforms like CoinMarketCap and CoinGecko. Nearly all of them are altcoins. Bitcoin is the one exception, because it's the coin every other coin gets defined against.
What does "altcoin" actually mean?
The term goes back to Bitcoin's early years, when developers started forking its open-source code to build coins with different rules. Namecoin, launched in April 2011, is usually credited as the first altcoin. Litecoin followed a few months later and became the first one to gain real trading volume, marketed at the time as "silver to Bitcoin's gold."
The definition hasn't changed since. What has changed is the size of the category. In 2011, "altcoin" meant a handful of Bitcoin clones. Today it means everything from a smart contract platform worth hundreds of billions down to a token that exists for one joke.
This creates a real gray area at the top of the list. Ethereum is, by definition, an altcoin. But traders rarely talk about it that way. Market commentary usually splits the space into three tiers: Bitcoin, Ethereum, and "the alts," because Ethereum's size and its role in the industry set it apart from the category it technically belongs to.
Bitcoin vs. altcoins: what's the difference?
| Aspect | Bitcoin | Altcoins |
|---|---|---|
| Primary role | Store of value, digital gold | Ranges widely: smart contracts, payments, governance, utility |
| Supply | Fixed at 21 million | Varies by project; some are fixed, many are inflationary |
| Consensus mechanism | Proof of Work only | Proof of Work, Proof of Stake, and hybrid models |
| Track record | Launched 2009, longest continuous history | Anywhere from over a decade old (Litecoin) to weeks old |
| Typical volatility | High, but lower than most of the category | Usually higher; small-cap tokens can move 20% or more in a session |
Types of altcoins
Not all altcoins are trying to do the same job. The category breaks down into a few clear groups.
| Type | What it's built for | Examples |
|---|---|---|
| Smart contract platforms | Run decentralized apps and other tokens on top of a blockchain | Ethereum, Solana, BNB Chain |
| Payment coins | Move value quickly and cheaply between parties | XRP, Litecoin, Stellar |
| Stablecoins | Hold a steady value, usually pegged to a fiat currency | USDT, USDC, DAI |
| Governance tokens | Give holders a vote on how a protocol is run | UNI (Uniswap), AAVE (Aave) |
| Utility tokens | Unlock features, discounts, or access inside a specific ecosystem | $MBG, which gives holders fee discounts and access across the mb.io ecosystem |
| Memecoins | Built around internet culture rather than a technical use case | Dogecoin, Shiba Inu |
| Privacy coins | Obscure transaction details for holders who want confidentiality | Monero, Zcash |
Stablecoins are a useful edge case worth calling out on their own. Technically, USDT and USDC are altcoins, since neither one is Bitcoin. In practice, traders talk about them as a separate bucket, because their entire design goal is the opposite of what most altcoins are chasing: no volatility, no price discovery, just a stable unit for parking cash between trades.
Why altcoins exist
Bitcoin was built to do one thing well, which is move value without a middleman. It wasn't designed to run applications, vote on upgrades, or settle payments in under a second. Altcoins exist because developers kept finding problems Bitcoin's design wasn't built to solve, and the source code was sitting there for anyone to build around.
Ethereum added programmability. Litecoin optimized for faster block times. Monero rebuilt the model around privacy. Each altcoin, at least in theory, is a bet on a narrower problem than the one Bitcoin already solved.
Altcoins and market cycles
Bitcoin dominance (ticker: BTC.D) measures Bitcoin's share of the total crypto market cap. It's the single most-watched number for gauging where money is flowing across the market.
- High dominance means capital is concentrated in Bitcoin and altcoins are underperforming as a group. Traders call this "Bitcoin season."
- Falling dominance usually means profits are rotating out of Bitcoin and into altcoins, which is when an "altcoin season" (or "altseason") tends to start.
The swings can be dramatic. During the 2021 altcoin run, Bitcoin dominance fell to roughly 39%, meaning altcoins as a group briefly held nearly two-thirds of the entire crypto market. Through 2025 and into 2026 the pattern reversed hard, with dominance climbing back above 55% as ETF-driven institutional demand flowed almost entirely into Bitcoin rather than the broader market. Where that number sits, and which direction it's moving, tells a trader more about altcoin conditions than any single coin's chart.
Risks of trading altcoins
- Volatility. Most altcoins swing harder than Bitcoin in both directions, and small-cap tokens can move sharply on light volume.
- Liquidity risk. Thin order books mean a large order can move the price against you on the way in and again on the way out.
- Project risk. Some altcoins never ship the product in their roadmap, and some are abandoned outright.
- Correlation to Bitcoin. Altcoins tend to fall harder than Bitcoin in a downturn, even when nothing about the specific project has changed.
- Regulatory risk. How a token gets classified can shift quickly and affect where it's listed and who can trade it.
- Concentration risk. Many altcoins have a large share of supply held by the team or early investors. When that supply unlocks, sell pressure often follows.
How to evaluate an altcoin before trading it
- Use case. What problem the token solves, and whether there's a working product or only a roadmap.
- Tokenomics. Total supply, circulating supply, and whether a large unlock is coming for the team or early investors.
- Liquidity. Daily trading volume and how many exchanges actually list it.
- Team and transparency. Whether the team is public and whether the code has been independently audited.
- Real usage. Active wallets and on-chain transactions tell you more than follower counts ever will.
Trade altcoins on mb.io
Knowing what an altcoin is answers half the question. The other half is where to trade one without taking on counterparty risk you never signed up for.
mb.io is a regulated crypto spot exchange backed by MultiBank Group, a financial institution founded in 2005 that serves more than 2 million clients across 100+ countries.
- Regulated by VARA in the UAE and AUSTRAC in Australia
- 10/10 security score from Hacken, an independent blockchain security auditor
- Institutional-grade MPC custody powered by Fireblocks, with segregated client funds
- A curated list of assets, so you're not sorting through thousands of tokens to find the ones worth trading
- Buy, sell, and swap in three steps, from sign-up to purchase
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Open your account and start trading on mb.io.
Frequently asked questions
Is Ethereum an altcoin?
Yes, technically. An altcoin is any cryptocurrency that isn't Bitcoin, which puts Ethereum in the category by definition. In practice, traders often separate it into its own tier because of its size and its role as the base layer for most of DeFi and NFTs.
Are stablecoins altcoins?
Yes, by the strict definition. USDT, USDC, and DAI are not Bitcoin, so they qualify. Most traders still treat stablecoins as a distinct category, since their purpose (stability) is the opposite of what drives most altcoin trading.
What was the first altcoin?
Namecoin, launched in April 2011 using a fork of Bitcoin's code. Litecoin, launched later that same year, became the first altcoin to gain widespread adoption.
How many altcoins are there?
Over 20,000 are tracked across major listing sites like CoinMarketCap and CoinGecko, though only a small fraction have meaningful trading volume or active development.
What does "altcoin season" mean?
A stretch of the market where altcoins as a group outperform Bitcoin. It typically follows a drop in Bitcoin dominance, as profits rotate out of Bitcoin and into the broader market.
Could an altcoin ever overtake Bitcoin's market cap?
Traders call this scenario "the flippening," usually in reference to Ethereum. It hasn't happened. Bitcoin has held the largest market cap of any cryptocurrency since altcoins first existed.
