What are altcoins? 84 coins above one billion dollars: how they differ from Bitcoin

An altcoin is any cryptocurrency other than Bitcoin. The word is a contraction of "alternative coins", and with that the definition is already complete: there is Bitcoin, and there is everything else. How large this "everything else" is can be put in figures. On October 23, 2026 the alternatives stand for around $1.22 trillion, which is 42.62 percent of the entire crypto market of $2.86 trillion. Only 84 coins carry any notable weight, however, because that is how many clear one billion dollars at all.

That makes the term as useful as it is misleading. It sorts a market with thousands of entries into two drawers, one of which holds almost everything: stablecoins that are never meant to rise, platform tokens for smart contracts, memecoins with no technology behind them and wrapped versions of Bitcoin itself. This article shows which types of altcoins exist, how you tell them apart, what applies in Germany for tax and supervision, and why a quarter of the altcoin capitalisation is, on closer inspection, no Bitcoin alternative at all.

Altcoin: the definition in one sentence

Altcoin denotes any cryptocurrency that is not Bitcoin. This boundary is not a technical one but a historical one. Bitcoin came first in 2009, everything later became the alternative, regardless of whether it pursues the same goal. That is why things fall under the term that have little to do with one another.

An example makes the difference clear. Ethereum is the largest altcoin at $293.4 billion and stands for 10.25 percent of the total market. It does not compete with Bitcoin as digital money, though; it is a platform for programs that run on a blockchain. Tether, the second-largest altcoin at $182.6 billion, is by contrast pegged to the US dollar and is specifically not supposed to rise. Both are altcoins. There is no more common ground than that.

For you as an investor that means: the term is good for classifying the market, not for picking an investment. Anyone who wants to "invest in altcoins" has decided about as much as someone who wants to invest "in shares other than Siemens".

Why the term altcoin dates from 2011

The origin of the word can be dated well. Until 2011 there was practically only Bitcoin. Then the first forks and replicas appeared, among which Litecoin became the best known: the same basic idea, but with shorter block times and a different computing method. Only then did the need for a collective term arise at all, and "altcoin" was the obvious short form in the English-language forums of the time.

This prehistory explains a peculiarity that still has an effect today. The early altcoins were technical variants of Bitcoin and wanted to do the same thing, only faster or cheaper. The promise of the "better Bitcoin" still shapes expectations of altcoins, even though today's large projects do something entirely different. Ethereum launched in 2015 with smart contracts, that is, with contracts that execute themselves, and shifted the whole category in the process.

A term from 2011 therefore describes the market of 2026 only imprecisely. It has survived because it is practical, and because the Bitcoin dominance metric lives off it.

42.62 percent of the crypto market: how large the altcoin market really is

For this article we counted the market ourselves on October 23, 2026. The result:

The metric behind this is called Bitcoin dominance: Bitcoin's share of the total market capitalisation of all cryptocurrencies. This figure is the most common way to measure the strength of the altcoins, because what Bitcoin does not hold, they hold.

Here it is worth looking at the imprecision, because it is larger than the number suggests. Two large market data sites report different values on the same day: 57.34 percent dominance at one provider, 59.43 percent at the other. The reason lies in the underlying population. One counts 11,351 cryptocurrencies, the other 22,457, and whoever includes more micro projects arrives at a different total and therefore at a different Bitcoin share. Dominance is thus not an exact quantity but an estimate with a range of around two percentage points.

In practice that means: as a directional signal, dominance works well. If it rises, Bitcoin is running better than the rest; if it falls, the alternatives are turning. You should not hang a decision on individual tenths of a point, however. How this shift can be read in real time is set out in our article on spotting an altcoin season.

Which types of altcoins are there?

The field can only be sorted sensibly by purpose. Six types of altcoin cover almost the entire market.

Platform altcoins

These projects provide a blockchain on which other programs run. The coin pays for the computing power. Ethereum is the model, Solana at $61.6 billion the best-known challenger. The technical term for the programs: dApps, decentralised applications that are executed on the blockchain without an operating company.

Payment altcoins

Here it is about moving money, as fast and as cheaply as possible. XRP leads this group at $83.2 billion, Litecoin is the historical representative. Transaction times here are seconds rather than minutes, and that is exactly what the projects advertise.

Stablecoins

A stablecoin is a token whose price is tied to a fixed value, usually one to one to the US dollar. Tether and USD Coin (USDC) are the largest. Both serve as a parking space between two trades and as a unit of account in trading. Price stability is the product here, not upside potential.

Privacy coins

These coins obscure who pays whom. Monero is the largest at $11.4 billion. Anonymity is their feature and at the same time their regulatory problem: several large trading venues no longer list Monero in Europe.

Interoperability altcoins

This group connects different blockchains so that value can move between them. Polkadot and Cosmos belong here, as do oracle projects such as Chainlink at $9.3 billion, which bring external data onto the blockchain.

Memecoins

Here the technical ambition is missing, and the price lives off attention. Dogecoin is the largest meme coin at $13.8 billion and thereby stands above established technology projects. That is the most honest indication that market capitalisation and substance can diverge in the crypto market.

A quarter of the altcoin capitalisation is stablecoins and wrapped tokens

Now comes the finding that puts the figure of 42.62 percent in a different light. We went through the 30 largest cryptocurrencies to see what they actually are. The result shifts the picture considerably:

• $269.2 billion sits in stablecoins. That is 22.1 percent of the entire altcoin capitalisation, and this money is tied to the dollar, so it takes part in no price movement.
• $62.3 billion sits in wrapped and staked tokens such as Lido Staked Ether, Wrapped Bitcoin or Coinbase Wrapped BTC. That is a further 5.1 percent, and behind it lie Bitcoin and Ether themselves, merely in another wrapper and on another blockchain.

Together that is 27.2 percent of the altcoin total which, on closer inspection, represents no alternative to Bitcoin at all. Wrapped Bitcoin is Bitcoin. Lido Staked Ether is Ether. Tether never wants to rise. Subtract these three groups and around 31 percent of the 42.62 percent remain, accounted for by independent projects with their own price risk.

This has a practical consequence for the dominance metric: a falling Bitcoin dominance does not necessarily mean that investors are rotating into altcoin projects. The decline can also mean only that more money is parked in stablecoins, waiting on the sidelines. Anyone reading the figure as a sentiment gauge should therefore always check which group has grown.

XRP was never mined: where the altcoin definition gets blurry

Under the common definition XRP is an altcoin, because XRP is not Bitcoin. It is asked about often all the same, and that has two understandable reasons.

The first is technical. XRP was not mined but created in full at its founding; there is therefore no proof of work and no block reward. Anyone who understands altcoin as "a cryptocurrency that works like Bitcoin" finds XRP falling outside the grid. The second reason is habit: in practice many people mean the smaller assets by "altcoins" and count the largest names separately.

For classification that means: the definition is unambiguous, everyday usage is not. When you read a market overview, it pays to look at whether Ethereum and XRP are included in the altcoin figure quoted. With Ethereum that alone makes a difference of 10.25 percent.

Smart contracts and dApps: what Ethereum does differently from Bitcoin

A smart contract is a program that sits on a blockchain and executes itself under defined conditions, without anyone having to trigger or confirm it. That is the decisive difference between Bitcoin and the largest altcoin, and it explains why the two are barely comparable.

Bitcoin can do one thing at its core: transfer value from A to B and record that tamper-proof. Ethereum can execute programs. On this basis, trading venues without operators have emerged, loan agreements without a bank and marketplaces for non-fungible tokens. The Ethereum project describes these functions in detail on its own page.

The price for this is complexity. Every smart contract is software and can contain errors, and an error in a contract that holds money costs money. Almost all the large losses in the crypto market of recent years go back to faulty contracts or hijacked bridges between blockchains, not to broken encryption. Anyone holding a platform altcoin carries this additional risk.

Proof of work and proof of stake: the two designs of the altcoins

Every blockchain needs a procedure by which the participants agree on the valid state. Two procedures dominate, and that is the most useful technical distinction between altcoins.

Proof of work has computers compete to solve a computational task; whoever finds the solution may append the next block and receives new coins for it. Bitcoin works this way, Litecoin and Monero likewise. The advantage is very robust protection, the disadvantage a high electricity consumption.

Proof of stake instead distributes this right by stake: whoever deposits coins may take part in the decision and receives a reward, but risks the stake in case of misconduct. Ethereum switched to this procedure in 2022, Solana and Cardano use it from the outset. Electricity consumption drops drastically as a result, and a yield on held coins arises.

This yield is at the same time a trap for investors in Germany. Earnings from staking are not price gains but current income, and the one-year deadline does not apply to them. More on that in the tax section further below.

Risks: what happens to the coins below the top 100

The distribution in the altcoin market is extremely skewed, and that is the most important risk. Our count from October 23, 2026 gives:

Depending on the provider, however, between 11,351 and 22,457 cryptocurrencies are counted in the market. Even at the lower figure, around 9,800 projects therefore do not even reach one million dollars. That is no longer an asset class but a residue in which trading barely takes place.

From this follow four risks that regularly materialise with small altcoins:

• No tradability. Without buyers there is no price. A coin can show a value in the portfolio that cannot be realised, because even small amounts move the price on sale.
• Delisting. Trading venues drop tokens when the volume is missing. After that a withdrawal deadline remains, and anyone who misses it has great difficulty getting at their holdings. We report on such deadlines continuously, because they come up regularly.
• Abandonment of the project. Development teams stop work. The token continues to exist technically, without anyone maintaining it.
• Fraud. With projects that have no track record and no verifiable use of funds, the risk of total loss is real. A token can be created in minutes; the fact that one exists says nothing about it.

A sober yardstick helps here more than any forecast: the further down the ranking, the more you have to check yourself, and the larger the share of the risk that has nothing to do with the crypto market but with the individual project.

Altcoins and tax: holding period, swaps and the 1,000 euro limit

For tax purposes German law treats altcoins exactly like Bitcoin. There is no special rule for Ethereum, XRP or Dogecoin, and that is the good news. The bad news: with altcoins in particular, a rule bites especially often that rarely stands out with Bitcoin.

The one-year deadline. If you sell a crypto asset from private holdings after more than one year, the gain is as a rule tax-free under section 23 of the German Income Tax Act. Within the year the gain counts as a private disposal transaction and is subject to your personal income tax rate, not to the flat-rate withholding tax.

The 1,000 euro limit. If all private disposal gains of a calendar year together stay below 1,000 euros, no tax is due. This is an exemption threshold and not an allowance: at 999 euros of gain everything stays tax-free, at 1,000 euros the entire amount becomes taxable from the first cent.

The swap is the catch. If you swap one altcoin directly for another, that counts as a sale of the first and a purchase of the second. The gain on the first falls due, and for the second the one-year deadline starts anew. Anyone actively rotating in the altcoin market thereby creates a long chain of taxable events without ever having seen a euro. That is exactly what distinguishes practice with altcoins from practice with Bitcoin, where buying and holding is more common.

On top of that comes the documentation requirement. For every event you need the time, the quantity and the price, and with hundreds of swaps across several trading venues that can no longer be managed by hand. Tools that take over this record keeping exist for precisely this purpose.

A note on the reform, because the question comes up frequently at the moment: the abolition of the one-year deadline is in progress but not decided. As we reported on October 15, 2026, the cabinet date passed without a decision. For acquisitions up to the end of the year the existing rule applies; for your planning, do not rely on newspaper reports but on the state of the law at the time of your sale.

MiCA and BaFin: how altcoins are regulated in Germany

Since the European regulation on markets in crypto-assets, MiCA for short, every provider of crypto-asset services in the EU needs an authorisation. The competent authority in Germany is BaFin, the national accompanying act is the Crypto Markets Supervision Act.

Three points of this matter for you as an investor, and they are often confused.

First: the regulation concerns the provider, not the coin. An authorisation says something about how the trading venue holds and documents client funds. About the quality of an altcoin it says nothing. A regulated trading venue can list memecoins, and most do.

Second: stablecoins are regulated more strictly than other altcoins. Separate rules on reserves and on redemption apply to them, which is why some dollar stablecoins are no longer freely offered in the EU.

Third: an authorisation from another EU state also applies in Germany. A provider licensed in the Netherlands or Ireland may serve German customers without being listed with BaFin. A BaFin list is therefore not a complete register of the providers admitted here. When in doubt, check which supervisory authority a provider names instead of only searching for a German entry. Which trading venues can show an authorisation in the EU and which authority granted it is set out in our overview of regulated crypto exchanges.

One practical consequence of the framework concerns the privacy coins: because traceability of payments is required, several large trading venues have delisted Monero and similar assets in Europe. With this category, tradability in Germany is therefore the first question, not the last.

Buying altcoins in Germany: spread, selection and custody

On purchase, altcoins differ from Bitcoin in three points that feed through to costs.

The selection decides the access. Large trading venues list several hundred assets, German brokers often only two dozen. A coin from the middle field is frequently not tradable at a broker at all, and in your bank's portfolio almost never.

The spread weighs more than the fee. With Bitcoin the gap between bid and ask is often in the per-mille range, with smaller altcoins it can amount to several percent. You pay this difference invisibly on purchase and again on sale. This gap appears in no fee table, but with altcoins it is usually the larger cost block.

Custody is more laborious with altcoins. Anyone wanting to hold assets themselves needs a wallet that supports the blockchain in question. Many hardware devices carry Bitcoin and Ethereum together with the tokens built on them, but not every independent blockchain. Check the support before buying the coin, not afterwards.

Altcoins: 84 out of more than 11,000 carry any weight at all

The market beside Bitcoin is large, but it is not broad: the substance sits in a few dozen projects, and a good quarter of the altcoin total consists of stablecoins and wrapped coins that do not want to be an alternative to Bitcoin at all. Anyone who knows this reads every market overview differently. Three steps that follow from it:

1. Check tradability first, then the story. Is your candidate listed at a trading venue you can use, and how large is the gap between bid and ask? A look at the exchange comparison clarifies where the asset is available at all.
2. Settle custody before the purchase. For holdings that are meant to sit for longer, the question of the supported blockchain belongs at the beginning. Which device carries which networks is set out in the hardware wallet comparison.
3. Set up the record keeping before you swap. Every swap between two altcoins is a taxable event and starts the one-year deadline anew. Anyone reconstructing that only in the spring pays with time. The suitable tools are in the tax tool comparison.

(As of October 23, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)