While Bitcoin has long held its title as the original cryptocurrency, an ever-expanding array of “altcoins”—digital currencies other than Bitcoin—has emerged to challenge its dominance. With more than 20,000 altcoins now in existence, only a select few boast significant market capitalisation and practical utility. Yet, their performance in 2024 has left even Bitcoin’s impressive 132% growth in the shadows.
On the Luno platform, some of the standout altcoins have soared dramatically this year. Dogecoin (DOGE) leads with a remarkable 327% increase, followed by Ripple (XRP) at 285%, Hedera (HBAR) at 274%, Stellar (XLM) at 243%, and Solana (SOL) at 210%.
Born from blockchain technology, altcoins address various technological, industrial, and financial needs. Their versatility has led to their classification into distinct categories, each serving unique purposes within the cryptocurrency ecosystem.
The Role of Stablecoins and Utility Tokens
Stablecoins, such as Tether (USDT), aim to minimise volatility by pegging their value to stable assets like the US dollar. These coins offer a predictable cryptocurrency experience, acting as a bridge between traditional financial systems and crypto markets.
Utility tokens, on the other hand, provide access to blockchain-based platforms or services. Ripple (XRP), for example, facilitates cross-border payments, bridging different currencies with transactions that are completed in as little as three to five seconds. Such innovations enable banks and payment providers to achieve faster and more efficient global transactions.
Governance Tokens and Meme Coins
Governance tokens empower holders to shape the future of crypto projects. Maker (MKR), for instance, allows investors to vote on decisions that affect the MakerDAO platform, underscoring the democratic potential of decentralised autonomous organisations (DAOs).
Meanwhile, meme coins, initially dismissed as novelties, have proven their staying power in the market. Dogecoin, the first meme coin, began as a humorous homage to the “doge” meme but has since evolved into a widely recognised digital currency. Its adoption has been bolstered by influential supporters, such as Elon Musk, and its integration into various payment systems.
Navigating the Altcoin Market
Altcoins offer exciting opportunities but come with heightened volatility, often exceeding that of Bitcoin. As the cryptocurrency industry matures, platforms like Luno have expanded their offerings, adding more digital assets based on robust data and thorough analysis.
Christo de Wit, country manager for Luno South Africa, advises caution. “We recommend customers start small, invest only what they are prepared to lose, and grow their crypto knowledge,” he says.
While altcoins present immense potential, a diversified approach, coupled with thorough research and prudent risk management, remains essential for navigating this dynamic market.
