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How To Buy Altcoins In the Most Efficient Way Possible [2024]
As the leading two cryptocurrencies by market cap (Bitcoin and Ethereum) continue to gain traction, so too are many altcoins, which are capturing investor interest through their unique value propositions, and enticing tokenomics. This is hardly surprising, given how the performance of altcoins has historically been influenced by how well Bitcoin and Ethereum does.
But understanding the potential value of altcoins is only half the battle, and what is arguably more important is knowing how to buy these digital assets in an efficient and streamlined manner, as this can significantly impact your ROI potential, whilst also reducing risks.
This guide will therefore act as your evergreen resource for knowing how to buy altcoins in the most efficient way possible, and will uphold ICONOMI as the go-to platform for seamless altcoin investments. So whether you're a crypto newbie or a seasoned trader, mastering these steps will help you navigate the altcoin market with confidence and precision.
Let's dive right in!
What Are Altcoins?
Put simply, altcoins are any digital assets that are not Bitcoin. This includes a wide range of cryptocurrencies, with each having unique features and utilities. It is important to note that even though Ethereum is arguably just as influential as Bitcoin, it is still widely viewed as an altcoin.
In terms of their value, altcoins offer ample investment and innovation opportunities. From tokens that provide price stability, to ones that power dApps (decentralised applications), altcoins play a very important role within the crypto space.
Below is a list of the main types of altcoins:
1) Stablecoins
Stablecoins are cryptocurrencies that are designed to maintain a stable value, and are usually pegged to a fiat currency like the USD. Examples include Tether (USDT), USD Coin (USDC), and Dai (DAI); to name a few.
2) Utility tokens
Utility tokens are cryptocurrencies that either provide access to a product or service within a blockchain ecosystem, or that help to maintain a blockchain network by incentivising miners/validators. Examples include Ethereum, Binance Coin (BNB), Chainlink (LINK) and Filecoin (FIL); to name a few.
3) Governance tokens
Governance tokens are cryptocurrencies that grant holders voting rights to influence decisions within a blockchain project, protocol or DAO (decentralised autonomous organisations). Examples include Uniswap (UNI), Maker (MKR) and Aave (AAVE); to name a few.
4) Privacy coins
Privacy coins are cryptocurrencies designed to provide enhanced privacy and anonymity for transactions. Examples include Monero (XMR), Zcash (ZEC), Dash (DASH); to name a few.
5) Meme coins
Meme coins are cryptocurrencies that originate from internet memes or jokes, often with a strong community focus. Examples include Dogecoin (DOGE), Shiba Inu (SHIB) and Bonk (BONK); to name a few.
Why Consider Altcoins Over Bitcoin?
The next question you need to ask yourself, is why consider investing in altcoins over Bitcoin; or alongside it? Below are some of the main reasons why crypto enthusiasts tend to invest in altcoins:
Diversification opportunities
For one, investing in altcoins allows you to diversify your portfolio, which in turn spreads risk across multiple assets. By not putting all your eggs in one basket, you can potentially mitigate losses from a single cryptocurrency’s poor performance, whilst also capitalising on gains from others.
Potential for higher returns
Because altcoins often have relatively small market caps, in the event that they offer compelling tokenomics, they can often present opportunities for higher returns compared to Bitcoin. While they carry more risk, the growth potential of emerging altcoins can lead to significant profits, especially if you invest early in a promising project.
Involvement in innovative projects
Many altcoins are used to power crypto projects that are at the forefront of technological advancements and innovation. So by investing in them, you can potentially be part of groundbreaking projects that are shaping the future of blockchain technology, including those found within DeFi (decentralised finance) to RWAs (real world assets).
Community and ecosystem engagement
Many altcoin projects have vibrant communities that encourage active participation. So by investing in certain altcoins, you have the opportunity to engage with communities that can offer valuable insights, networking opportunities, and a sense of belonging. Quite often, the performance of a token can be influenced by how active a community is.
Common Mistakes to Avoid When Buying Altcoins
So after seeing the various types of altcoins on offer, and some of their benefits, you may feel ready to invest? But before you do, it's perhaps best to be aware of common mistakes to avoid when buying altcoins:
Not doing proper research
The first and perhaps most critical mistake is failing to conduct thorough research. Understanding the fundamentals of an altcoin, its use case, the team behind it, and its market potential is essential. Relying on hearsay or hype can lead to poor investment decisions and significant losses.
Valuable information on how to best go about this can be found in our previous article titled "A Guide For Long-Term Crypto Investing [2024]".
Investing more than you can afford to lose
Because cryptocurrency investments can be highly volatile, one should never invest more money than they can afford to lose. It's therefore vital to set a budget and stick to it, ensuring that your financial stability is not jeopardised by potential market downturns.
To help, many crypto exchanges and investment platforms also offer stop loss and rebalancing utilities to help minimise risk.
Falling for scams and phishing attacks
The crypto industry is rife with scams and phishing attempts. Therefore, you should always double check that the exchanges or platforms you are buying from are legit, and avoid clicking on suspicious links. Scammers often pose as legitimate entities, so it's vital to always check URLs, and avoid sharing delicate information.
Steps to Buy Altcoins Efficiently
It is now time to buy your desired altcoins, and there are many ways to do this. But not all are equal in terms of utilities, efficiency and value for money. For this reason, we shall provide you with a step-by-step guide on how to buy altcoins in the most efficient way possible.
Step 1: Choose a reliable platform
The first thing you should do is identify a reliable platform that meets the following criteria:
Regulated: Ensure the exchange or investment platform has been regulated, and has a good reputation in the industry. This helps to ensure trust and security for your investments.
Security features: Only buy altcoins from exchanges or platforms that offer robust security measures, such as two-factor authentication (2FA), secure storage solutions (cold wallets) and encryption. Protecting your assets should always be a top priority.
User-friendly: In order to ensure that buying altcoins is a smooth affair, opt for an exchange or platform with an easy-to-use interface, and easy navigation. Responsive customer support is also something you should look for.
Wide range of available altcoins: Choose a platform that supports a diverse selection of altcoins. This allows you to explore different investment opportunities and diversify your portfolio effectively.
Reasonable fees and transaction/withdrawal costs: Compare the fee structures of different platforms. Opt for one that offers competitive fees without compromising on the quality of services provided. Lower transaction and withdrawal costs can significantly impact your overall returns.
Step 2: Set up an account with ICONOMI
Taking the above into consideration, there are few investment platforms that offer a better route for efficiently investing in altcoins than ICONOMI. This is because the crypto investment platform is regulated (FCA), has an intuitive interface, offers the the best market prices (thanks to its trading engine and ability to find the best price from the top ten crypto exchanges), is highly secure, and caters for 150+ cryptocurrencies.
In order to set up and account with ICONOMI, you should adhere to the following steps:
1) Visit the ICONOMI website: https://www.iconomi.com/
2) Click on the "Register" button, usually located in the top right corner of the homepage.
3) Provide the required information:
- Email address
- Strong password
- Confirm your password
4) Agree to the Terms of Service and Privacy Policy.
5) Click on the "Create Account" button.
6) Verify your email address by clicking the confirmation link sent to your inbox.
7) Once verified, log in to your ICONOMI account using your email and password.
8) Complete your profile by providing additional information as requested, such as your full name, date of birth, and country of residence.
9) Enable two-factor authentication (2FA) for added security.
10) Successfully complete any Know Your Customer (KYC) verification process required by ICONOMI. This may involve providing identification documents.
11) Once your account is fully verified, you can proceed to deposit funds and start investing in altcoins.
Step 3: Funding your account
There are various ways to fund your ICONOMI account, and they include:
1) Transfer euros or British pounds to ICONOMI from your bank account. Click here for more information.
2) Money - deposit via instant transfer (iDEAL, Giropay, Bancontact). Click here for more information.
3) Money - deposit via credit/debit card. Click here for more information.
4) Crypto - deposit. Click here for more information.
Step 4: Choosing the right altcoins
Once you have funded your account, it's time to determine which altcoins are best for your needs. But before you start analysing, it is essential to first determine whether you will have a short-term or long-term investment outlook. This is highly important, as certain altcoins will be more suited for short-to-mid term investing, and others long-term. It is advisable to read our previous article regarding this.
Now, in terms of what you should be looking for in altcoins, the following factors are good starting points:
Market Trends:
Look for altcoins that are experiencing positive market trends, such as increasing trading volume, rising prices, and growing market capitalisation. These trends can indicate rising investor interest and potential for future growth. You should also look at historical market performance. All of this can be seen on ICONOMI's user-friendly dashboard.
Project Fundamentals:
Research the underlying project behind the altcoin. This includes looking into its purpose, technology, and roadmap, whilst also evaluating the team's experience and expertise in the blockchain space.
The best place to analyse all of this is usually on the project's website, and by going onto the project's whitepaper which normally details its goals, tokenomics (distribution and utility of the token), and potential real-world applications.
Community Support:
A vibrant and active community can be a positive indicator for an altcoin. Engaged communities can provide valuable insights, support the project's development (especially with marketing), and contribute to its long-term success.
The best way to gauge this is to explore the project's social media channels (Telegram, Discord, Twitter), forums, and online discussions to gauge community sentiment and activity.
Step 5: Making your purchase
Once you have identified the altcoins you would like to purchase, all that is left to do on the ICONOMI platform is:
- Go to Invest
- Select the Cryptocurrencies tab
- Select the asset you wish to buy
- Click/tap Buy
- Select euro or British pound under Fiat currencies (or the cryptocurrency you want to use)
- Enter the amount to spend or amount to receive)
- Follow the on-screen instructions
Alternatively, if you are still not sure on the best altcoins for your need, or simply don't have the time to efficiently manage your crypto assets, then ICONOMI's crypto strategies provide an excellent hands-off solution for gaining exposure to an array of different altcoins.
Conclusion
As can be seen, knowing how to buy altcoins in the most efficient way possible can significantly enhance your investment potential.
So by following the steps outlined in this guide, you can optimise your altcoin purchases, mitigate risks, and potentially maximise returns. What's more, all of this can be done in an incredibly streamlined manner on ICONOMI, which boasts a user-friendly interface, an extensive altcoin selection, competitive fees, and advanced security, making it an excellent choice for both beginners and experienced investors alike.
So are you ready to take the next step in your crypto journey? Sign up with ICONOMI today, and start building a diversified and prosperous altcoin portfolio!
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