When Bitcoin was launched, it gained a lot of popularity as a decentralized currency that could be used to transfer money anywhere in the world efficiently. But now there are many other cryptocurrencies on the market and some have been gaining more attention than others.
Altcoin season is a time when many altcoins release their own new coins. Altcoin season usually lasts from November to December. The “when is altcoin season 2021” is the time in which most of the altcoins release their new coins.
The year 2021 was a watershed moment in the history of cryptocurrencies. The whole industry has experienced massive price gains and considerable volatility, led by Bitcoin. Decentralized finance (DeFi) technology apps and cryptocurrency ecosystems have exploded in popularity, allowing consumers to trade and lend their tokens without the need of a conventional financial institution.
Some have asked what the bitcoin ecosystem will look like with all of this activity and instability. Will Bitcoin maintain its dominance and skyrocket? Will other coins challenge for first place in the field? Insiders have already devised a word to describe the risk of Bitcoin stalling out as the value of other cryptocurrency goods and tokens rises. “Altcoin season” is what it’s called.
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1. What are altcoins and what do they mean?
Cryptocurrencies that aren’t Bitcoin or Ethereum are known as altcoins. In fact, Bitcoin has such a stronghold on the market that Ethereum is frequently referred to as an altcoin.
Bitcoin is cryptocurrency’s big kahuna, the one that began it all, the one that’s traded the most every day, the one that’s garnered the most support from conventional financial institutions, and, of course, the one that’s worth the most ($885,497,080,149 as of Dec. 17, 2021).
Ethereum is comparable in that it has a lengthy history, a wide range of projects and systems built on top of it, a large trading volume, and a high total value (valued $459,827,737,310 as of Dec. 17, 2021).
Altcoins are essentially anything else. Sometimes they’re Ethereum-based tokens for DeFi projects, sometimes they’re issued as part of a “initial coin offering” for usage with a particular product, and sometimes they’re created by developers who believe something is wrong or missing in the present crypto ecosystem. This might be forks or versions of mainstream currencies (such as Litecoin (LTC) or Bitcoin Cash), or a whole new form of currency with a particular purpose (stablecoins like Tether or USDC), or tokens for use in a specific ecosystem (such as XRP for Ripple).
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2. When is the “altcoin season”?
When tokens and currencies that aren’t Bitcoin consistently outperform Bitcoin, it’s known as altcoin season.
There’s no certainty that every Bitcoin rally will end in a fall or that altcoins will begin to outperform the original cryptocurrency. In fact, it’s not unusual for all cryptos to climb at the same time as interest in the industry develops and fresh money pours into various currencies in search of profit.
There are a variety of hypotheses as to why an altcoin season can occur. One frequent theory is that Bitcoin investors would take advantage of a rising Bitcoin price by selling part of it and investing the proceeds in other cryptocurrencies.
This might be for one of two reasons:
- To achieve success. This might happen if an investor’s Bitcoin value has increased in relation to the dollar, other fiat currencies, or other cryptocurrencies, and they wish to spend part of their winnings on items that cannot be purchased with bitcoin.
- Future growth expectations shift. An investor’s estimated future growth or worth of an asset may vary compared to the price of investing after a strong runup in Bitcoin. As a result of the inflated Bitcoin value, altcoins may be a superior investment in the future. And they will be if enough investors and traders make that choice.
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3. How do you know when altcoin season is upon us?
You can’t predict altcoin season only based on the price of altcoins, Bitcoin, or any other cryptocurrency.
A better measure of what’s going on with investor valuation of cryptocurrencies is to look at their “market cap,” or the total value of all circulating tokens. This is due to the fact that price is controlled not just by investor interest or apathy, but also by the amount of coins in circulation.
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4. How are altcoins doing in comparison to Bitcoin?
We can identify whether we’re in altcoin season by looking at two factors. The first is Bitcoin’s “dominance” in comparison to the rest of the crypto market, as well as altcoin performance in comparison to Bitcoin.
According to CoinMarketCap, Bitcoin controls 41% of the overall market at the time of writing in December 2021. It was at 70% at the start of this year. Bitcoin’s maximum dominance was 96 percent in late 2013, and its lowest dominance was about 33 percent in early 2018. Its lowest point this year is roughly 40%, which it reached in May.
Bitcoin’s value has plummeted by about 40%, allowing altcoins to rise in value in contrast. However, we can also compare Bitcoin’s market value to that of other cryptocurrencies:
- The market capitalization of Bitcoin has risen from $176 billion to $885 billion.
- The market value of XRP, the Ripple cryptocurrency, has risen from $9 billion to little under $38 billion.
- Cardano (ADA), whose coin is ADA, has surged in value from $3 billion to $41 billion.
- Litecoin, a Bitcoin alternative that was launched in 2011 and is therefore one of the oldest cryptocurrencies, has increased from $3 billion to $10 billion in value.
- Ethereum (ETH), the smallest of the altcoins but the most well-known of all non-Bitcoin currencies, has increased from $29 billion to $459 billion in market capitalization.
It’s still unclear if altcoin season is occurring at all, and if it is, whether it will continue.
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The food that was delivered
The term “altcoin season” refers to a period of time when altcoins consistently surpass Bitcoin. There are a few methods for predicting altcoin season, but none of them are foolproof. You’ll know it when you’re in it, basically.
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Altcoin season is a time when many cryptocurrencies are created and released. The end of altcoin season usually coincides with the end of Bitcoin’s “halving”. Reference: when will altcoin season end 2021.
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