SHORT ANSWER: You buy altcoins on Kraken, eToro, Coinbase and Robinhood!
While Bitcoin has made headlines in 2024, some altcoins have been much more profitable. Tokens ranging from Fetch.ai (FET) to dogwifhat (WIF) are examples of altcoins that have outperformed Bitcoin. These tokens present opportunities for profitability and trading. However, the diverse range of projects can make it difficult to decide on a token to buy and purchase the tokens. Let’s take a look at where to buy altcoins in 2024, as well as some key characteristics to consider when making a purchase.
Understanding Altcoins and the Market
While many investors no longer consider Ethereum to be an altcoin, it's still worth mentioning as the best risk-adjusted investment behind Bitcoin. Ethereum isn't an altcoin though – that would be its native asset, ETH. A native asset is a cryptocurrency that is required to transact on a platform or application and how you can bet on the future of the project. If demand for the platform increases so does demand for its native asset.
A new financial industry has been enabled by the global computer that is Ethereum's blockchain – decentralized finance (DeFi). Smart contracts aren't just useful for creating other decentralized currencies, they can also be used to make decentralized applications (dApps).
A developer would choose to make their application decentralized if they believe it stands to benefit from anonymity and peer-to-peer interactions. Take the foreign exchange (FX) market for example, which employs banks all across the world to facilitate trade. While FX may seem decentralized, each of these banks represents a central point of attack for hackers or malicious insiders. Additionally, these banks require personal information to protect themselves from fraud. All of this can be solved with a simple smart contract on the blockchain. No central points of weakness, complete anonymity and borderlessness – all thanks to the powers of the blockchain. Decentralized exchanges (DEXs) like Uniswap and SushiSwap are applications created using smart contracts and have native assets that are some of the most promising altcoins on the market today.
How to Buy Altcoins in 3 Steps
1. Create an Exchange Account
Exchanges power swaps between fiat currencies and digital currencies. There are plenty of great altcoin exchanges that will deliver you access to altcoins. Centralized U.S.-based exchanges require SSN, driver's license and sometimes other personal information for tax purposes. However, DEXs are entirely anonymous. You'll find a list below to compare crypto exchanges and pick the one that's right for you.
Creating an account is straightforward, usually just requiring an email and password, as well as verification.
2. Fund Your Account
With a verified account, you will need to add funds to it. This process can be accomplished in several ways, such as a wire or automated clearing house (ACH) transfer. Wire transfers occur directly between your bank and the broker and can be quick but often have higher fees. ACH transfers can be a bit slower but often do not have fees.
Some sites allow for instant access to buying power, such as Robinhood and Webull. This means that you can begin trading before the transfer is cleared and deducted from your bank account.
3. Study the Market and Buy
The altcoin market is ripe with winners and losers. The best way to attempt to figure out the winners is to spend time in the markets before investing your full amount. Start small and learn real lessons with small amounts of money before risking a bigger loss.
To buy, search for the token on the exchange, enter the dollar amount or number of tokens you would like to purchase and execute the trade. Look for a trade confirmation email and view the position in your portfolio.
How to Choose Which Altcoin to Buy
- Community and adoption: Some tokens, particularly meme coins, can see large price increases on the back of a strong community. The communities can band together to continue buying the token to send the price higher and keep it there. Additionally, adoption from institutions or individuals can help increase demand for the token.
- Use cases: Higher adoption rates can lead to price increases. One of the key drivers of adoption is use cases. If a project can provide lots of utility to its users, there is a chance that more people will buy the token.
- Liquidity: Another important metric is liquidity. This metric can show how large the project is as well as how easy it is to enter and exit a trade. Typically, tokens with larger volumes are seen as safer and easier to invest in.
- Tokenomics: Crypto allows the project creators to have full discretion over the token supply or the tokenomics. Projects can have different supply schemes, which has an impact on the price.
- Development team: Some projects intentionally keep the development team anonymous so that they can scam their users. While this is not the case for all projects with anonymous founders, it is usually better to invest in projects with known employees and developers to better ensure the credibility of the project.
Where is the Best Place to Buy Altcoins?
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
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How to Securely Store Your Altcoins
While storing crypto on a trading platform is the easiest option, it does not give you full discretion over your tokens. To be able to use your altcoins and have full discretion, you need a wallet.
Best Hardware Wallet: Ledger Nano S Plus
Ledger is a hardware wallet that supports thousands of altcoins. Hardware wallets are physical devices that store private keys to crypto wallets. Funds cannot be accessed without the physical device present. Hardware wallets are the safest way to store crypto.
Ledger currently offers the Nano S Plus and Nano X models. The Nano S Plus is a rudimentary device that is beginner-friendly. The Nano X is for more advanced users, offering more space and connectivity options.
Best Software Wallet: Coinbase Wallet
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
Different from the crypto brokerage, Coinbase Wallet is a wallet service provided by Coinbase. Funds are held in the wallet instead of by Coinbase themselves. You do not need a Coinbase account to have a Coinbase wallet. The wallet supports most of the major blockchains.
Coinbase wallet is a great option for those looking for more security but do not want the hassle of a physical device. It is also free, whereas most hardware wallets require purchase.
Is It Worth Buying Altcoins?
Investing in altcoins can be rewarding and risky. While some altcoins have experienced significant growth and have made early investors wealthy, others have failed and caused significant losses. Conduct thorough research and analysis before investing in altcoins because of the high volatility and unpredictability of the cryptocurrency market. Investing in altcoins can offer opportunities for diversification and potentially higher returns compared to traditional investments, but it also carries a higher level of risk. The decision to invest in altcoins should be based on an individual's risk tolerance, financial goals and understanding of the market dynamics.
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About Caden Pok
Caden has been involved with crypto since 2018, when he began investing, trading, and mining tokens. He took part in undergraduate research studying cryptoeconomics at the University of Michigan, where he will graduate Phi Beta Kappa with a bachelor’s in economics in 2025. He is experienced with DeFi technology and multiple blockchains, currently investing in Ethereum and Bitcoin.