The term "altcoin" refers to all cryptocurrencies other than Bitcoin ¹. Altcoins were initially created by copying and pasting Bitcoin's source code, and they were not unique enough to have a distinctive term ¹. However, the community began to distinguish altcoins from tokens when Ethereum's smart contract platform was introduced, which can produce "smart contract tokens" - cryptocurrencies with the ability to perform intelligent tasks autonomously ¹. Altcoins are now coins that have their own blockchain, while tokens are defined as cryptocurrencies created on smart contract platforms ¹.
The value of altcoins is still completely dependent on Bitcoin's market capitalization ¹. In September 2021, Polygon, Avalanche, and Luna all experienced a decline in value due to the fear of a broad regulatory crackdown and lack of fundamental value ². In February 2021, altcoins experienced a decline in value due to the strength of Bitcoin, which sucked out most of the volume in the cryptocurrency market ⁴. In June 2023, an article published by The Economist stated that regulators are putting the future of America's crypto industry in doubt. The article suggests that even if regulators create a path for firms to exist within the law, crypto's value will shrink as it becomes more difficult to avoid the costly red tape that applies to regular financial institutions. Second, more crypto firms will move to places with friendlier regulation and shun doing business in America altogether ².
In summary, altcoins have experienced declines in value due to various factors such as regulatory crackdowns and Bitcoin's dominance in the cryptocurrency market. The future of altcoins remains uncertain.
Source: Conversation with Bing, 31/10/2023
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