DEFEED on Binance Feed: TOP 10 Altcoins of 2023 with Growth Potential.

Bitcoin is the most recognisable brand in the cryptocurrency market and the most capitalised asset. However, due to its high capitalisation, bitcoin cannot experience huge price movements in a short period of time and the price is subject to clear market cycles that do not suit all investors. For this reason, many crypto enthusiasts try to earn more and faster by investing in altcoins.

In this article, we will discuss what altcoins are, which ones to choose for investment, and which assets could do well in 2023.

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What are Altcoins?

Altcoins in crypto refer to coins that are not bitcoin. The term originated in the early stages of the market (~2014) when the first cryptocurrencies began to emerge. They were often positioned as an alternative to bitcoin, hence the name altcoins (alternative coins).

However, there are now two approaches to defining altcoins:

• Narrow: Proponents of the narrow approach believe that an altcoin should be described as a “non-Bitcoin” asset that has coin (currency) status, meaning that it is launched on its native blockchain.

  Examples of altcoins in this sense are LTC, DOT, ATOM, APT and the like. According to this classification, the market consists of bitcoin, altcoins and tokens of individual projects that do not have their own blockchains.

• Broad: In the broad approach, altcoins refer to all market assets except bitcoin, as was the case in the early days of crypto.

  This is how most influencers and analysts understand “alt” as a collective term for interchangeable tokens and coins. In the rest of the text, we will consider altcoins in this sense.

Note: ETH’s status in the modern market is not entirely clear. Some analysts classify it as an altcoin based on the “non-bitcoin” criterion, while others believe that it is distinct from BTC and other coins/tokens, has a weak correlation with them and therefore occupies a special niche in the market.

Opportunities in the Cryptocurrency Market in 2023

Despite a prolonged sideways trend and unfavourable macroeconomic factors in 2023, the cryptocurrency market provided various opportunities for both experienced crypto traders and newcomers to make profits through investments. The most profitable market trends were:

Some of these narratives were short-term and have already exhausted their potential, while others are considered long-term and allow for profits to be made now or in the future.

It is important to note that not all of the promising narratives for 2023 have yet manifested or fully unfolded. There are always opportunities to profit in the crypto market, but not everyone is able to consider them in time or take advantage of them effectively.

Top 10 Promising Altcoins in 2023

Based on current market trends and events that have occurred in the cryptocurrency market in 2022-2023, the following promising altcoins can be identified:

1. Ethereum: The strongest blockchain ecosystem in the market and the second largest asset by market capitalisation after BTC. Moreover, after the transition to PoS, ETH has gained additional value in the form of staking and deflationary tokenomics, which reinforces investors’ bullish sentiment.

2. Litecoin: The main source of positive expectations is the Litecoin halving, which is expected to occur in August 2023. As LTC price cycles follow BTC cycles, the halving could lead to a rapid increase in the value of this coin.

3. Arbitrum: the leading Layer 2 solution for Ethereum. The native token was launched in March 2023 and is showing good momentum. It has a strong and fast growing ecosystem.

4. Polygon: another L2 solution with a developed network of partners, including traditional companies. The project has recently launched a solution based on zk rollup and continues to develop new products.

5. Aptos: a next generation L1 blockchain offering high throughput and low cost transactions. Launched last year, it has already updated its historical maximum.

6. Sui: another new blockchain that was launched on the mainnet in May 2023. Its high market capitalisation and short trading period may indicate the token’s potential. However, much depends on the competition with Aptos. 

7. Lido: Ethereum’s most popular liquid staking protocol. It allows investors to stake ETH and receive liquid stETH tokens in return. It is the core of a separate DeFi ecosystem. 

8. Frax: Another liquid staking protocol, as well as an algorithmic stablecoin issuer and a full DeFi platform. It fits into several market trends and therefore has high growth potential.

9. Ripple: provides blockchain infrastructure to banks and government institutions, so it could get a boost as traditional financial institutions adopt blockchain solutions.

10. Cardano: focused on creating solutions to launch CBDCs. It already has several successful cases of launching national digital currencies and could grow with further adoption of the technology.

How to Choose the Best Altcoins for Investment?

Choosing assets to build a portfolio is the main task of an investor, especially when it comes to niche altcoins whose price depends on specific conditions, rather than fundamental cryptocurrencies like BTC or ETH. To find promising coins, consider the following factors when researching:

• Tokenomics: key economic metrics (total supply, supply in circulation, market capitalisation, etc.), utility, use cases for the token in the native ecosystem, and unlock schedules.

• Asset Distribution: The more investors that own the altcoin and the fewer whales among them, the less susceptible the asset is to market manipulation. Bubblemap is an effective tool for exploring the ownership structure. 

• Project Narrative: Narrative plays a big role in crypto, so the more compelling the project’s narrative, the better the token’s chances of success. The narrative includes the concept, values, prospects, benefits for investors, etc.

• Market trends: The narrative should also be in line with current market trends. It’s important for investors to follow current general narratives and learn to spot trends during formation.

• Community: The main liquidity and distribution of the token is provided by its community. The larger, more active and loyal the community, the greater the chances of success and potential growth for the project. The main measure of community is social media activity.

Many crypto investors also use market indicators and technical analysis to make decisions, but these tools usually work in the short term and require skills to use properly. 

This is not an exhaustive list of criteria. Each investor will create their own checklist of requirements that the asset must meet in order to be included in their portfolio.

Tips for Beginners When Buying Altcoins.

As altcoins make up a large segment of the market and are often associated with new projects, they represent additional opportunities as well as additional risks for inexperienced users. If you have no experience investing in cryptocurrencies, here are some things to consider when buying altcoins:

• Market cycles: investors should understand the rules by which capital moves in the crypto market, why and how the alt season begins, what are the signs of bullish and bearish rallies, what affects the price of certain assets and the overall market performance.

• Investing is a strategy: if you don’t understand how to choose an entry point, what part of your portfolio you are willing to risk, and when to take profits, then investing becomes gambling.

• Diversification: Spread your investments not only across different assets, but also across different market segments and categories of altcoins. A well-diversified portfolio will help hedge risks and reduce potential losses.

• Networking: Follow people, wallets and social networks. The right information channels will allow you to capture alpha and use smart money investment strategies.

• Do your own research: always do your own research, especially when it comes to a new venture. This will help you avoid scams and learn to be critical of information from influencers and developer beliefs.

It is also worth remembering that you can make money on altcoins at any time, but it is much easier to do so during a bull market: the overall risk/reward ratio during the alt season is better than during a bear market or a period of strong BTC dominance. In some periods, the best investment decision may be not to invest at all.

Investment Risks in Altcoins

Remember that the first task of a crypto investor is to survive, and only then to make money. Therefore, it is important to be aware of the risks associated with investing in altcoins and how to protect your assets. Some of the possible dangers include:

• Rugpull: This is where developers keep up the appearance of activity for a while and then disappear with investors’ money. This tends to affect young projects, so they require particularly careful DYOR.

• Scam smart contracts: If a token is offered to be claimed or obtained through a DEX pool, it is worth checking the smart contract for malicious code. This can be done here. It is also a good idea not to interact with suspicious platforms from your main wallet.

• Market manipulation: Altcoins with low capitalisation and centralised distribution are vulnerable to whales. Manipulators can cause an unjustified and unpredictable rise or fall in price, and retail investors tend to suffer.

• Lack of real value: Not all altcoins are really needed by the crypto community. Developers may make mistakes in assessing the market or building tokenomics, leading to the quick or slow death of the project or token.

The list does not include the general risk of volatility, i.e. sudden and unpredictable changes in value caused by news background, the actions of the project itself or other market factors. Altcoins tend to be more volatile than underlying assets.

Conclusion

Altcoins are a separate category of assets in the cryptocurrency market, often positioned as more productive compared to bitcoin. These coins form market cycles called altseasons, which typically follow the bitcoin season.

Investors are attracted to altcoins primarily by their volatility and growth potential, which allows them to earn more and faster than investing in stablecoins or the more conservative bitcoin. However, investing in altcoins also involves additional risks that are not typical of BTC investments.

In this article, we have provided a list of promising altcoins for 2023 based on current market narratives, but it should only be used as a starting point for your own research, not as an exhaustive list.

Remember, a crypto investor’s best friends are DYOR and a risk management strategy!

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