An altcoin is any cryptocurrency other than Bitcoin — the term is short for “alternative coin.” Most Australian crypto platforms list dozens or even hundreds of altcoins alongside Bitcoin, ranging from well-known names like Ethereum and XRP to thousands of smaller, less-liquid tokens.
How Altcoins Work — A Practical Example
Imagine you deposit A$2,000 onto an Australian crypto platform and decide to buy Ethereum (ETH), one of the most traded altcoins. At a price of A$4,000 per ETH, your A$2,000 buys you 0.5 ETH. Over the next two weeks, ETH rises 20% to A$4,800, making your holding worth A$2,400 — a A$400 gain before fees.
Now consider a smaller altcoin with lower trading volume. The same A$2,000 might move the market price noticeably when you try to sell, and the spread — the gap between buy and sell price — could be far wider than on ETH or Bitcoin. This liquidity risk is one of the key differences between major and minor altcoins.
Some brokers also offer altcoin exposure through CFDs rather than direct ownership, meaning you speculate on price movement without holding the actual token. If you want to understand how that structure works, see our guide to CFDs.
Why Altcoins Matter for Australian Traders
ASIC has progressively tightened its oversight of crypto-related products sold to Australian retail clients. Any platform offering altcoin CFDs to Australians must hold an Australian Financial Services Licence (AFSL), which means the broker is subject to dispute resolution requirements, capital adequacy rules, and client money segregation obligations.
Altcoins carry significantly more volatility than Bitcoin, and smaller-cap tokens can lose 80–90% of their value in a matter of weeks. ASIC has specifically flagged that retail investors often underestimate the risk of lesser-known tokens, particularly those promoted heavily on social media. Always check whether a platform is ASIC-licensed before depositing funds for altcoin trading.
When a broker handles altcoin listings well, they provide transparent fee schedules, clear information about which coins are available for direct ownership versus CFD trading, and real-time pricing. Poorly managed platforms may delist coins without notice, impose hidden withdrawal fees, or offer altcoins only through opaque pricing structures.
Altcoins vs Bitcoin
Bitcoin is the original cryptocurrency and still holds the largest market capitalisation globally, which generally makes it more liquid and less prone to extreme price swings than most altcoins. Altcoins can offer higher potential returns but come with greater risk of price collapse, project failure, or low liquidity. Some altcoins, like Ethereum, have real utility underpinning their value — others are largely speculative. For most Australian traders, Bitcoin’s liquidity and regulatory familiarity make it the safer starting point, with altcoins better suited to experienced traders who understand the additional risks. For most Australian traders, the liquidity and regulatory status of an asset is the more important factor to check.
What to Check When Comparing Brokers for Altcoin Trading
- ASIC licence status: Confirm the platform holds a valid AFSL before depositing any funds. ASIC’s register is publicly searchable and takes less than two minutes to check.
- Available altcoins and structure: Clarify whether you are buying actual altcoins or trading CFDs — this affects ownership rights, tax treatment, and what happens if the platform goes insolvent.
- Spreads and fees: Altcoin spreads can be significantly wider than Bitcoin spreads. Compare the spread on your chosen altcoin across at least two platforms before committing capital. eToro is one ASIC-licensed platform that lists a broad range of altcoins with published spread information.
- Withdrawal conditions: Some platforms impose minimum withdrawal amounts or delays on altcoin withdrawals. Read the fine print before you fund an account.
- Security and custody: For direct altcoin ownership, check whether the platform uses cold storage, offers two-factor authentication, and carries any insurance on digital assets. If you plan to move coins off-platform, understand how a crypto wallet works before you start.
See our picks for the best crypto platforms in Australia — all ASIC-licensed, all live-tested by our team.
Trading CFDs carries significant risk. 70–80% of retail accounts lose money. ASIC regulated. We may earn commission via links.