One of the best ways to invest in cryptocurrencies is to find quality coins that are still undervalued by the market. Such coins are ideal for the buy and hold strategy, because they are much more likely to increase in value over time than the market as a whole.
Cryptocurrencies values are greatly correlated, as the market usually moves in waves. When Bitcoin rises, most altcoins rise as well, while when Bitcoin falls, altcoins tend to fall as well. But similarities end here. What matters most is which altcoins will outperform the market.
Short term moves are usually erratic and are not necessarily based on fundamentals. Some coins may get artificially pumped, or increase due to exaggerated hype while having no real value proposition. Some coins are just a nice story that will never happen, but for a while they get pumped “to the moon” as bitcoiners use to say. We consider such altcoins to be overvalued by the market. They carry a higher risk of devaluation, and less potential for further growth. While some of them may continue to perform well and prove to be good long term bets, the risk-reward ratio is not very good since current prices are artificially inflated.
On the other side, there are the undervalued coins. Those are the good coins the market did not price yet according to their potential. Altcoins may be undervalued for various reasons. The most common reason is the focus on technology and product development as opposed to marketing. While this is a long term winning strategy, it doesn’t create the hype needed for short term pumping and exaggerated media buzz. We think such undervalued alt coins are the best long term investments in the crypto space.
Most Undervalued Cryptocurrency in 2018
It is impossible to name a single coin as the most undervalued. However, after doing plenty of research on the altcoin markets we have spotted some very solid projects that are still underpriced compared to the overall market. In order to make it easier to create a diversified altcoin portfolio, we have searched for the ideal Crypto exchange where you can buy the largest diversity of altcoins and access even the exotic ones with low market capitalization. Our conclusion is that in order to access the best undervalued altcoins you need access to at least two cryptocurrency exchanges. The ideal combination of exchanges that combines a solid operating reputation, good liquidity with the access to even the most unknown coins is Binance and Cryptopia. All the altcoins we will discuss in this article can be found on at least one of the two mentioned exchanges.
As we consider that a good diversified portfolio must include both large, middle and small cap cryptocurrencies, we will present undervalued coins in each market segment. As a general rule, large caps have lower upside potential but come with lower risks, while small cap altcoins have huge upside potential but the risks are also higher. This is why a balanced portfolio must have all types of coins, from high market cap to high risk low market cap coins.
Best Undervalued Large Cap Cryptocurrencies in 2018
We consider cryptocurrencies to be large-cap when their market capitalization exceeds 1 billion USD. Since crypto valuations suffer wild swings during both upturns and downturns, some altcoins may move across the one billion line faster than predicted, but for the simplicity of the argument, we will just consider the prices at the time of writing the article when deciding if an altcoin is large-cap or mid-cap.
At the time of writing this article, there are 27 cryptocurrencies in the large-cap category. Of course, the largest five are the most famous as well (Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin). However, being in the top five doesn’t mean they are necessary overvalued.
Here are the most undervalued large cap coins according to our evaluation:
1. Litecoin (LTC)
While the fifth spot in the current ranking may seem a very high one, we believe Litecoin actually deserves better. With a market cap of only half that of Bitcoin Cash and a fourth of that of Ripple, Litecoin is obviously the undervalued coin among the top five. In the long term, a few years from now, it is almost a certain fact that Litecoin will be more valuable than both Bitcoin Cash and Ripple. All cryptocurrency insiders believe that. However, the current prices are still rather low for Litecoin.
Litecoin’s market cap currently sits at 12 billion, while Bitcoin is valued at 169 billion and Ethereum at 91 billion. We believe Litecoin should be a strong contender for the second spot. If we consider Bitcoin and Ethereum to be fairly valued, than Litecoin should be worth more. In our view, Litecoin should be valued at least half of Ethereum, so a 45 billion market cap would be more suitable if we consider Ethereum’s value to be correct.
With the upcoming launch of LitePay, Litecoin is set to have a great year in 2018. We think every crypto investor should own Litecoin, and there is still time to accumulate at a good price. Litecoin under $500 is still a good buy, and with the current price of $223 we think Litecoin is still undervalued.
The current leader among anonymous coins sits at the 13th spot in the Coinmarketcap ranking with a market cap of 4.5 Billion. We believe there is a great future for anonymous coins considering the crackdown pressures that governments exert on cryptocurrencies. Monero is a very solid coin with low supply and a perpetual inflation set at below 0.87%. We think Monero has great potential and should be in the top 10 cryptocurrencies. It is a much better coin than many altcoins that are currently priced higher.
Currently priced at $283 per coin, we think Monero is a good long term buy below $500, just as Litecoin.
While not an “altcoin”, we wanted to include Bitcoin in this list because nobody should dismiss it from the cryptocurrency portfolio. The king of cryptocurrencies is still undervalued compared to the general market. While Bitcoin dominance (currently at 35%) may still continue to drop, we believe Bitcoin will outperform more than 90% of the altcoins in the long term.
If the Lightning Network starts getting implemented and succeeds, Bitcoin will receive a huge boost this year. It may even recover some of the market dominance as many people will start to question the value of altcoins based solely on cheap transactions. Everyone must own Bitcoin as a hedge, because if Lightning is successful, there is a big chance for a huge shake-up in the altcoin valuations, and Bitcoin will come out on top.
At the time of writing, Bitcoin just got back to the $10,000 mark. Is it cheap, or is it expensive? Nobody can answer that for sure, because Bitcoin is the benchmark of the cryptocurrency markets as a whole, but chances are it will look very cheap at $10,000 at the end of the year. Just as the $1,000 price was replaced with $10,000 in no time, we would not be surprised to see Bitcoin move at $100,000 in two-three years if Lightning proves to be a success.
Most overvalued large cap altcoins
While this article is about undervalued coins, we felt it is important to point out some altcoins that are currently in the large-cap list and many people have heard about them, which we consider to be overvalued and can be a huge trap for investors. We think investors should be cautious about Ripple, Bitcoin Cash, Ethereum Classic or Bitcoin Gold. We also think other large cap coins such as Cardano, EOS, Stellar and NEO are probably overpriced at current levels.
Most undervalued mid cap altcoins in 2018
We consider altcoins to be mid-cap when their market capitalization ranges between $100 million and $1 billion. Coins in this range can be everything from hyped up scams to advanced projects that are still not valued correctly by the market. The risk of buying overpriced coins in this range is huge, as many of the coins in this category have no real value proposition, and they were just artificially inflated so that their developers will get rich quick. However, there are also some very good coins in this category that will probably grow out to be large caps in the near future.
Right now, mid cap altcoins are the ones from the 28th to the 148th place on the Coinmarketcap list (a total of 120 coins). As you can see, there are a lot of coins to choose from in the mid cap range. Which one we believe will outperform the market in the long term?
Here are the best undervalued mid cap coins according to our research:
1. NAV Coin (NAV)
On the 128th spot of the market cap list comes NAV Coin, with a valuation of 130 million. This Proof of Stake coin is very advanced from a technological point of view. It has a very solid development team, a very good track record of delivering on time, and a very ambitious roadmap. NAV Coin has solid anonymity features with a side blockchain that can be used for anonymous transaction, it features its own light wallet for both desktop and mobile devices (NAVPay) and it is working on several outstanding features including the Valence platform.
There is so much to say about NAV Coin that an entire article would not be sufficient. You can learn more about this amazing coin from their official website: https://navcoin.org
After following this project for more than a year, we are confident that NAV Coin has a great future and it will become a large cap coin. This means NAV Coin can achieve 10x growth rates from the current prices. At $2 (which is the current price) we believe NAV Coin is a steal. This coin will be worth more than $10 in the not so distant future.
Currently sitting on the 35th spot among cryptocurrencies with a market cap of $780 million, WAVES is a very strong project with Ethereum-like potential. Before the January crypto bust, WAVES used to be a large cap, and we believe it is only a question of time before it gets back above one billion. With a fixed total supply of 100 million Waves already in circulation, Waves has zero inflation.
The Waves platform has huge technological advances compared to other altcoins. Their blockchain is considered to be the fastest of all and has a huge transaction capacity. The Waves nodes earn rewards from the transaction fees and do not rely on mining or inflation to power the network. This is possible because of the Waves DEX, the Decentralized Exchange that runs on Waves tokens and which constantly generates fees for those powering the network as well as demand for additional Waves. You can read more about this coin on their official page at https://wavesplatform.com
Waves is a very advanced project with working products and many more additions in the roadmap. Buying it below $10 is an opportunity that will not be waiting for long, so take advantage of the low price of $7.8 while it lasts. Anywhere under $20, Waves is still a great buy.
Just to understand the upside potential of this coin, you should consider a market cap equal to that of Ethereum today ($91 Billion). This would translate in the price of one Wave at $910! This is a more than 100x potential gain.
We will have only two recommendations in the mid-cap category, because we were not able to find other altcoins with a convincing long term buy outlook like the ones we are presenting here.
Best undervalued low cap cryptocurrencies in 2018
The low-cap category includes all coins with a market cap below $100 million. There are lots of such coins, from the 149th place down to 1530th, if we take only coins presented on Coinmarketcap. Of course, there are many coins and tokens that are not even included on the list, so the number of low cap altcoins is huge.
Fishing for the next big hit among so many projects is not easy, but the greatest potential will always be at a low price. This is why we looked for undervalued altcoins in the low cap category for a very long time, and once we find something with potential, we monitored the coin for a few months in order to see if the project is legit and it has a real future.
Investing in low cap altcoins is riskier, but it also has higher potential. We think that people willing to take risks should have part of their portfolio invested in such coins, in the hope of getting a huge boost.
Below are the best low cap altcoins we have found:
1. DeepOnion (ONION)
At the 218th place in the cryptocurrency ranking, with a market cap of only $53 million we find DeepOnion, the hidden gem of Cryptopia. We call it like this, because right now Cryptopia is the only important exchange where you can purchase Onions. Buy them cheap while you still can is an understatement when speaking about DeepOnion.
This coin has one of the strongest communities in the cryptocurrency world. The current low value is only because the coin is very new (not even one year old) and it has received a lot of FUD from competing cryptocurrencies that are envious of DeepOnion’s fast growing community. There are a few milestones that DeepOnion has still to pass in order to boom, but they are a sure bet to happen this year.
Once DeepOnion gets listed on more exchanges, the mobile wallet is released and the airdrops are over, we will see an exponential rise in Onion’s price. We are talking about one of the most famous anonymous altcoins that is powered by a huge vocal community and a top notch development team. You can read more about this coin on https://deeponion.org
Currently priced at $5, DeepOnion is a steal at current levels. With a total supply of about 20 million after airdrops are over, a one billion market cap would give DeepOnion a price of $50, which translates into a 10x increase. Considering the huge community support and the fast advancing roadmap, we believe DeepOnion may be able to become a large cap as soon as this year.
SpectreCoin sits at the 275th place in the altcoin ranking with a market cap of only 36 million. This coin is one of the most focused coins on the anonymity aspect of addresses and transactions. The team developing this project is obsessed with anonymity and is focused purely on technology, which is advancing rapidly with Spectre.
This explains why such a good coin is still so cheap. The lack of marketing activity has kept Spectre under the radar for now, but once the community and the developers decide to market the coin more, it has the potential to boom. We believe great technology will be rewarded sooner or later, and this is why it is just a matter of time before SpectreCoin gets the value it deserves. You can read more about this coin on https://spectreproject.io
SpectreCoin is currently valued at $1.8 and has a total supply of close to 21 million. With an inflation rate of 5% thanks to the Proof of Stake model, the total supply is not going to increase much in the following years, while the market cap is almost surely set to explode. This would make SpectreCoin very cheap below $10, so the current prices are a steal.
At the 493rd place on the ranking comes Hush, a small coin valued at only $9 million right now. The price of a single HUSH is $2.80, which is a real steal, since the coin was valued at $20 during the January boom. With the next boom in altcoin prices around the corner, Hush is very likely to get back to its all-time high pretty soon, which implies a 7x value appreciation. When it comes to low cap coins, volatility is huge. This is why a coin like Hush went from $1.5 to $20 and then back to $2.5 in only two months. But with volatility comes huge growth potential, and with the next bullish wave there is a great chance for a booming Hush price.
The good part about Hush is that the downside risk is pretty low now, and the upside potential is enormous. This is an anonymous coin of the same type as ZCash, but with several improvements over the latter. The coin supply is limited to 21 million just like Bitcoin, but right now only 3.2 million Hush have been mined, around the same amount as with ZCash. The big difference is that Zcash is valued at $471 while Hush at $2.8 (168 times lower). If Hush continues to be developed, it has great potential.
A proof of Hush’s potential was the creation of Bitcoin Hush (BTCH), a revolutionary anonymous coin which will use multiple blockchains. The team behind Bitcoin Hush decided to allocate the BTCH to the owners of Hush, Bitcoin and another two altcoins. Hush was selected as a source of ownership for BTCH along with Bitcoin, and this speaks volumes about how Hush is seen in the anonymous currencies space.
With such a low market cap and a very solid project, Hush is a good option to add and hold long term in your altcoin portfolio.
As with other low cap coins, you can buy Hush only on Cryptopia.
A growth portfolio in the cryptocurrency space must contain various coins, from big coins with high name recognition to low cap altcoins with huge growth potential. Diversification is essential, just like when it comes to mining cryptocurrencies, since big coins have less upside potential while low cap coins are riskier, since they are newer projects with less overall adoption, but have higher upside potential.
It is important to avoid overvalued and overhyped coins, as the focus should be on solid projects with low inflation rates and great potential. All the coins presented here as undervalued are serious projects that are here to stay for the long term. Nobody knows how successful each coin will be, but what we know for sure is that a great coin, with great technology and a passionate community behind it will never be abandoned.
What was presented in this article is in no way to be interpreted as short term advice. The coins we presented here are for long term holding. They may drop in value before they go up, and they can be extremely volatile. Short term trading with altcoins should never be based on long term projections, because volatility is so high in this market that long term trends are powerless against short term moves.
For those looking for short term trading, we recommend using professional cryptocurrency brokers that allow you to trade the markets in both directions (up and down) using Contracts for Difference. Such brokers allow traders to speculate on the most famous cryptocurrencies, because the lower-cap altcoins are just too volatile for short term trading. Brokers such as 24Optionand Etoro offer the best instruments for short term cryptocurrency trading.
Risk Disclaimer: Cryptocurrency trading is not suitable for everyone, and can result in the entire loss of your investment. Trading with derivative instruments such as Contracts for Difference, Futures or Options involves risk and can result in the total loss of your account balance. Do not trade using instruments you do not fully understand. Do not trade with money you cannot afford to lose.
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