The term is a holdover from when Bitcoin was effectively the whole market and everything else was an alternative to it. It now covers assets with almost nothing in common — established smart contract platforms, stablecoins, governance tokens and joke coins are all altcoins by this definition, which limits how much the word can tell you.
It survives because the market does often move in that shape. Capital rotates between Bitcoin and everything else, a pattern visible in Bitcoin dominance, and traders use the word to describe that rotation. As a category for analysis it is far too broad; as a description of flows it is still used daily.
Is Ethereum an altcoin?
By the strict definition, yes — it is not Bitcoin. In practice many traders treat Bitcoin and Ethereum as a category of their own and reserve the term for everything below them.
Last updated October 17, 2026