While Bitcoin reigns supreme as the king of cryptocurrency with a market capitalization of over $820 billion, it’s not the only game in town. Thousands of alternative coins, or “altcoins”, offer various possibilities, from financial services to gaming experiences. Altcoins boast a combined market capitalization of over $1 trillion, making them an integral part of any serious crypto investor’s portfolio.
Let’s look at the best altcoins for 2023.
Why Invest in Altcoins?
“Altcoin” refers to any cryptocurrency other than Bitcoin, such as Litecoin, Dogecoin, or Ethereum. Of course, there is no single reason to invest in an altcoin since each project is different. For example, Dogecoin was initially built as a meme, whereas SushiSwap is a decentralized finance token that pays a dividend from smart contract income.
There are many different types of altcoins:
- Cryptocurrencies are digital currencies that seek to improve fiat currencies, similar to Bitcoin’s goal. Ex. Dogecoin (DOGE)
- Stablecoins are digital tokens backed by real-world assets that provide a stable store of value. Ex. Tether (USDT)
- Decentralized Finance (DeFi) is an ecosystem of blockchain-based financial services that eliminate intermediaries. Ex. Uniswap (UNI)
- Non-Fungible Tokens are unique tokens representing a digital or physical good, such as a piece of artwork. Ex. Flow (FLOW)
- Play to Earn is a term that describes blockchain-based games featuring a token-based economy. Ex. Decentraland (MANA)
CoinMarketCap further divides altcoins into categories like:
- Marketing tokens typically support ad networks or similar protocols. Ex. Basic Attention Token (BAT)
- Tokenized Stock represents stocks traded on centralized exchanges, like the NASDAQ. Ex. Mirrored Apple (mAAPL)
- Real Estate tokens represent the physical real estate market. Ex. Propy (PRO)
- Exchange tokens are those issued by exchanges to facilitate liquidity. Ex. Binance Coin (BNB)
- Sports tokens represent various sports-related efforts. Ex. FC Barcelona Fan Token (BAR)
Short-term traders may invest in altcoins based on their momentum or other technical factors. On the other hand, long-term investors may seek altcoins that offer a compelling value proposition and growth potential. Either way, investors should do their due diligence by reading whitepapers and understanding an altcoin’s goals and objectives.
Best Altcoins for 2023
There are thousands of different altcoins, but only a fraction of them have become highly successful. Investors should factor in the percentage price movement and the overall market capitalization when looking at success. After all, an obscure altcoin with a $10,000 market capitalization could experience a steep rise thanks to a single buyer.
1. Telcoin (TEL)
Telcoin (TEL) is a cryptocurrency that aims to facilitate global remittances and mobile payments by leveraging the existing global telecom infrastructure. Telcoin (TEL) is currently ranked 227th in the overall cryptocurrency market. It has a circulating supply of 65 billion TEL, with a market capitalization of $130 million. At the time of writing this, the value of TEL has increased by a small amount, and over the past 7 days, it has risen by 1.45%. Some people believe that Telcoin has strong potential for growth and could be a good investment opportunity.
2. Axie Infinity (AXS)
In 2023, it’s possible that the use of non-fungible tokens (NFTs) in the gaming industry could grow, which may have a positive impact on the value of AXS. According to Coinpedia, this could lead to the price of AXS reaching its highest point of $11.0269. However, it’s also possible that negative comments and decreasing trading volume could cause the price to drop to $7.6168. Based on these factors, the average price of AXS might end up being around $9.3218.
3. Solana (SOL)
Solana is one of the best altcoins and fastest-growing blockchains globally, with over 400 projects spanning DeFi, NFTs, Web3, and more. The network is extremely fast with 400ms block times and scalable with less than one cent transaction costs, helping its token soar more than 7,700%.
Solana, although not a recent addition to the cryptocurrency market, has seen a surge in popularity and adoption in recent months, making it one of the best altcoins. Its dramatic price increase has caught the attention of many investors, leading them to discover the project’s exceptional usability and functionality.
4. Fantom (FTM)
Fantom is another fast, high-throughput open-source smart contract platform for digital assets and dApps. In addition, the venue features an all-in-one DeFi suite. Fantom utilizes a unique consensus mechanism called Lachesis, which is “leaderless” in nature. This mechanism enables fast transaction speeds, low fees and deterministic finality. Lachesis allows developers to create Peer-to-Peer (P2P) applications without the need for a separate networking layer.
A week ago, the price of Fantom was $0.22. In the past seven days, it has seen a 42.19% increase and is currently at $0.32. However, at the time of writing this, FTM experienced a decline of -0.04%. The overall sentiment in the cryptocurrency market is slightly bearish, but the outlook for the long-term remains positive and it is predicted that FTM could reach $5.43 by 2024,” according to AMBCrypto.
5. Polygon (MATIC)
Polygon is a protocol and framework for building Ethereum-compatible blockchain networks. MATIC is the network’s ERC-20 token that provides a gateway to multi-chain Ethereum.
At the time of writing this, MATIC’s value stands at $0.9671 after hitting a high of $1.05. It has seen a 21.2% rise in the past 7 days. MATIC currently holds a global ranking of #10, with a market capitalization of $8.4 billion. The price of MATIC remained stagnant between 75 cents and $0.90 for several weeks before experiencing a 10% increase within 24 hours on January 14th.
According to Analytics Insight, currently, the market outlook for MATIC is positive, and it is expected to experience further growth in the future. Analysts forecast that in 2023, MATIC may reach $1.2 in the short term and $1.8 in the medium term. In the long term, this altcoin could potentially reach prices as high as $2.5 by the end of the year.
Trending Altcoins in 2023
The top-performing altcoins may have been the strongest historical performers over the past year, but other coins may just be starting their rise moving into the latter part of the year and beyond. As a result, investors may want to keep an eye on these coins considering many have smaller market capitalizations than more established cryptocurrencies.
6. Gala (GALA)
Gala is a developer of blockchain-based games where the GALA coin plays a central role in the in-game economies. Unlike competitors, the Gala Network aims to build a player-owned ecosystem and has already attracted more than 8,000 play-run nodes.
7. Ariva (ARV)
Ariva is a next-generation local tourism and travel network targeting one of the largest industries in the world. The company aims to develop a network where members can meet with global and regional tourism providers with digital payments made in ARV tokens.
8. Troy (TROY)
Troy is a smart hybrid asset management platform that adheres to inclusivity, profitability, and security principles. The platform offers liquidity and the ability to claim a return on the tokens that the platform uses to operate and quant strategies for global investors.
9. Tron (TRX)
Tron is seeking to build a decentralized web by supporting many decentralized platforms on its network. Using the TRX token, these apps cover everything from decentralized voting to decentralized exchanges, with high throughput, scalability, and availability.
10. Conflux (CFX)
Conflux is another blockchain network that features high throughput, security, interoperability, scalability, low fees, and built-in staking. Using the CFX token, the network’s goal is to enable creators, communities, and markets to connect across borders and protocols.
What Are The Tax Implications on Altcoins?
Taxes have become a big concern for cryptocurrency investors as the IRS steps up enforcement. While the tax agency provided some guidance, there are still many ambiguous areas, especially with altcoins.
The IRS’ general stance on cryptocurrencies is that they’re taxable as property. So, for example, if you purchase Dogecoin at $0.10 and sell it for $0.20 six months later, you will owe short-term capital gains tax on the $0.10 profit. However, if you hold cryptocurrencies for more than one year, you will be eligible for the lower long-term capital gains tax rate.
Some altcoins present a more complex tax scenario. For instance, if you lend $500 worth of USDC on Compound and receive cUSDC, you might treat the token as a capital gain or interest taxed at ordinary income tax rates. However, since the IRS hasn’t issued any specific guidance, the right decision depends on the interpretation of existing tax laws.
Non-fungible tokens, or NFTs, present a similar tax conundrum. In addition to triggering taxes upon purchase, if you sold Ethereum to purchase an NFT, you may treat any increase in the NFT’s value as a capital gain or a collectibles tax. The collectible tax rate applies to trading cards or wine and is higher than the capital gains tax rate.
The best way to navigate these complexities is to use dedicated crypto tax software to organize your transactions and work with a professional accountant to ensure that you’re making the right decisions. Many accountants offer audit protection or support for an extra fee, which may be a good decision if you’re already an audit risk.
The Bottom Line – Best Altcoins for 2023
Bitcoin may be the most well-known cryptocurrency, but altcoins have become increasingly popular over the past decade. In addition to Ethereum and dApps, the rise of non-fungible tokens (NFTs) and decentralized finance (DeFi) has spawned endless possibilities for traders and investors interested in the space.
If you trade cryptocurrencies, ZenLedger can help you keep everything organized for tax time. Try it for free!
Read also – The Top 6 Cryptocurrency Trends in 2023
