Altcoins explainedWhat are altcoins?

An altcoin is any coin or token except bitcoin. The term is a contraction of alternative and coin. When Bitcoin appeared in 2009, it was the only coin. By now there are thousands of alternatives, each with its own purpose, technology and user base. Below you'll read which types of altcoins there are, how to choose a good altcoin, and what the risks are.

A few well-known altcoins in 2026:

• Ethereum (ETH): platform for decentralised apps and smart contracts.
• Solana (SOL): fast Layer 1 blockchain with low fees.
• Cardano (ADA): Layer 1 with a focus on scientific rigour.
• USDC: stablecoin pegged to the US dollar.
• Dogecoin (DOGE): memecoin, once started as a joke.

Altcoins can roughly be divided into six categories.

Layer 1 blockchains. Independent networks with their own blockchain. Examples: Ethereum (ETH), Solana (SOL), Cardano (ADA). These are often "platform coins" that other projects are built on.

Utility tokens. Give access to a service within a specific crypto project. With MANA (Decentraland) you buy virtual land, with OXT (Orchid) you use a decentralised VPN.

Governance tokens. Give voting rights over a project's direction. Popular within DeFi (decentralised finance): think of UNI (Uniswap), AAVE or YFI (Yearn Finance).

Stablecoins. Have a value pegged to a traditional currency, usually the dollar or the euro. Big names: USDT (Tether) and USDC. Since the EU MiCA regulation came into force (2024), strict requirements apply to which stablecoins may be offered within Europe.

Memecoins. Coins that often started as a joke or a cultural nod. Dogecoin is the best-known example, launched in 2013 as a parody of Bitcoin. By now the dog has its own multibillion market, thanks to social media and celebrity attention. It remains speculative.

Layer 2 tokens. Extensions of a main blockchain. Arbitrum (ARB), Optimism (OP) and Base lower costs and speed up transactions on Ethereum.

Investing in an altcoin takes three steps:

1. Open a free account at BTC Direct. A one-off verification with your ID and a selfie, after which you can start straight away.
2. Choose the altcoin you want to buy from our range. Our coins are pre-selected on market value, project quality and reliability.
3. Place your order from 30 euros. You don't have to buy a whole coin, you automatically get the fraction that matches your deposit, in your own wallet.

Tip: spread your entry. Instead of putting in a large amount at once, you can also buy in instalments: a fixed amount every month, for example (DCA, dollar-cost averaging). That way you average out the price swings.

Doing your own research (DYOR) matters even more with altcoins. Four things to check:

1. The team. Look at the website. Are there real names, photos and LinkedIn profiles? Or only anonymous avatars? An open team is usually a good sign, though you should stay critical there too, because fake photos and stolen identities do occur.

2. The whitepaper. A whitepaper is the foundation of a crypto project: purpose, technology, how many coins there will be, which problem it solves. Every serious altcoin has one. No whitepaper, or a vague story? A serious red flag.

3. The roadmap. This is where you find future plans. Are they concrete and achievable? Or are there vague goals like "Q4: marketing"? Specific milestones that were actually met strengthen confidence.

4. Activity and community. A healthy project has active developers (visible on GitHub), discussions on Discord or Reddit, and regular updates. A "ghost project", with no GitHub activity for months, is a warning.

Altcoins are a serious investment, but they carry extra risks on top of the risks of bitcoin.

Volatile price. The crypto market is young and altcoins often have a smaller market capitalisation than Bitcoin. That makes the swings sharper, more upside potential, but also more chance of loss.

Lower liquidity. Some altcoins are traded very little. That means you can influence the price yourself with large orders, and that it's sometimes hard to exit quickly at a reasonable price.

Scams and rug pulls. Not every crypto project is honest. A rug pull is a notorious type of fraud where developers disappear with investors' money. Promised returns ("100x in 30 days") are a red flag. That's why at BTC Direct we work with a pre-selected range based on market value, project and reliability.

Regulation. Cryptocurrency is on regulators' radar. The EU MiCA regulation (since 2024) has considerably tightened the rules for stablecoins and providers. Stricter rules can be negative for the price in the short term; at the same time they can increase confidence in the long term.

Tax. In most European countries your crypto holdings have to be declared as assets. The rules differ per country, so check what applies where you live. Keeping track of your transactions saves you trouble at tax time.