Most Undervalued Cryptocurrency
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The number of coins and tokens in today's market is several thousand positions. With such a large number of potential means of payment and objects for investment, many virtual currencies are left behind. But if you invest in some of the undervalued crypto coins now, you can get excellent dividends in the future.
Today it is not so easy to single out the most undervalued crypto. There are young projects with small capitalization on the market. Due to weak marketing, the rate of cryptocurrencies of such startups can grow extremely slowly.
The price of Bitcoin or any altcoin depends entirely on the interest of the crowd or, to be more precise, supply and demand. Unfortunately, the level of development of the project no longer matters. It is much more important that it uses the hype, like, for example, Dogecoin.
What is its use? It gives the opportunity to earn on the hype.
How to find undervalued projects with prospects for further growth in a declining market? Which coins are worth paying attention to and what are the selection criteria? From the point of view of fundamental analysis of projects, it is worth paying attention to crypto projects that are working to solve the problems of scalability and increase the speed of operations in the blockchain.
If we are talking about speculation, then absolutely any cryptocurrency can grow if it receives the necessary hype. Underestimated, on the other hand, are only projects that can benefit the world and the financial system, which are undeservedly bypassed.
First of all, you need to study all the factors that guide investors. In this regard, it is recommended to objectively assess the reputation of the development team and the target audience of the project. Ideally, this should not be an already existing niche in which the founders of the project want to introduce digitalization/blockchain/NFT, etc. It should be a new niche that the project itself creates around itself.
It is worth applying a deeper price analysis to the token, which may indicate that it is not undervalued:
- Growth below market average in 2021;
- Growth below the historical high reached in 2017-2018;
- Significant growth in user base/liquidity without a similar increase in the rate.
The easiest way to make money on undervalued tokens is to look for large projects that have fallen in price more than the average market over the past two or three weeks. It is also necessary to take into account the fundamental potential and major expected events that may increase the value of the altcoin in the future.
If we consider the metrics of technical analysis, then the Relative Strength Index (RSI) will be useful; upon reaching extremely low values, the token has a very high chance to start a corrective upward movement.
First of all, you need to pay attention to those projects that have been working for more than a year and have their own flow of customers. For some of these projects, development may be more important than exchange speculation, so the value of their tokens will be underestimated. When projects start promoting the asset and integrating it with larger market participants, the price of the token can skyrocket.
Tips from Experts When Looking for Undervalued Tokens
- It is necessary to buy tokens only at the moment when mass panic sales occur on the market.
- Do not buy tokens when it seems that a reversal has occurred and the asset should start to rise in price. At such moments, it is necessary to take into account only technical analysis, and focus on trading volumes and positions in the order book.
- You should not join the pumps, the best periods to buy are the moments of sideways movement at a key level after an increase or decrease, depending on the overall market picture.
- The best strategy is not to try to beat the market and buy in equal shares at equal intervals of time, which will allow you to evenly distribute the price of entry into the asset.
- Divide the working volume into several parts and always leave a part of the deposit free so that it is possible to average out a bad entry.
In order to make money on investing in new tokens, or at least not lose money on it, it is important to choose promising projects correctly, paying attention to:
- Development team. They must have knowledge, experience and understanding of the market – this is an important criterion. It is important to study the past of the project team and who is behind it.
- A promising startup must have detailed documentation. It should clearly describe the task that the developers are solving, and cannot, for example, consist of only two pages: it is a more voluminous document.
- It is necessary to determine how interesting and promising the idea is.
- Check for an MVP, a minimum working prototype.
- Check the implementation of the roadmap. It is important to understand how the work on the development of the project is progressing, whether the deadlines are being met.
- Get to know the project community.
- Determine the market value of the project. That is, understand whether it is really necessary for the market and whether it will be beneficial.
Assess the market segment to which the project belongs. Now projects related to the field of fintech, logistics and cloud solutions are in demand at the start. In the fintech sector, you should pay attention to companies that provide crypto debit cards, custodial services, online wallets, as well as decentralized exchanges.
You need to invest in projects from sectors that are in demand among venture and institutional investors. This is the foundation for the medium-term growth in the price of tokens, and not just its local surge after listing on exchanges.
It is worth buying tokens even before they are added to the trading platforms, until the price has risen. After listing, it is difficult to make money by investing in new coins.
On the other hand, although it is possible to buy new tokens cheaper before listing on exchanges, it is better to wait for the project to appear on trustworthy trading platforms. There are undoubtedly advantages to buying a coin at an early stage – first of all, low cost. But it makes sense to wait for listing on medium and large exchanges, since such exchanges usually have a rather complicated due diligence process.
If a trader is lucky to find a project with great prospects, but the goal is speculative, then it is better to buy tokens at the ICO phase. If we are talking about long-term investments, then it will be more efficient to first wait for the project to launch, and then purchase coins after their value has decreased.
In general, it is extremely important to choose projects that develop a real product and have a fundamental basis for growth.
Overview of Promising Undervalued Coins
Some cryptocurrencies do not receive the attention of market participants for a variety of reasons. This may be a conviction that the project has no potential, a focus on specific more popular positions, and so on. Here are just some of the undervalued virtual currencies that really deserve attention:
The Aave token belongs to the platform of the same name, which is engaged in cryptocurrency lending. Currently, capitalization volumes exceed $2 billion. Relatively recently, the value of the cryptocurrency exceeded the $600 mark. But since then, the price has fallen by almost 80%. At the same time, it should be noted that many experts make positive forecasts about it. And soon it is quite possible to expect an increase in the rate.
Thanks to the acquisition of Aave, the trader is given the opportunity not only to receive interest on deposits, but also to borrow assets. The token is often used in trading with leverage.
- a large selection of cryptocurrencies that can be borrowed;
- can be used with leverage;
- good growth prospects.
Internet Computer – that's the full name of the ICP project – deserves much more attention than it currently receives. After all, it is based on the grandiose idea of a decentralized Internet. Experts have repeatedly noted that modern computer technologies have been moving towards this goal for decades.
This project is an important basis on which the new generation Internet will begin to be created. IT companies will lose power, which will pass to ordinary users.
The ICP project can be hardly classified as a cryptocurrency project. However, it has a token of the same name, which can be considered an excellent object for investment.
- support for popular cryptocurrency exchanges;
- compatibility with smart contracts.
Investors should pay attention to a coin with an increased level of anonymity – ZCash. Today, many major players are only interested in capitalization leaders – Bitcoin and Ethereum. ZCash, on the other hand, remains in the shadows. Cryptocurrency is distinguished by a complex encryption system and provides complete anonymity during transactions.
The decentralized platform Compound offers borrowed funds to traders. For the payment of remuneration, the COMP currency is used. This altcoin has recently fallen in price. However, many experts are sure that traders should not take their eyes off COMP, because there is every reason to expect a reverse trend. That is, an impressive growth rate.
And these words should be trusted. After all, the project really has good prospects. Cryptocurrency loans are held through a liquidity pool. The Compound platform offers customers to earn money on their own funds by lending them to other people. There is every chance that in the future the popularity of the project will increase.
- the project can be used by traders, regardless of experience;
- a good option for increasing leverage.
The key task of the IMPT platform is to unite people who want to protect the planet from an environmental disaster, and provide all the opportunities for this.
Any actions are carried out through IMPT – native tokens of the project. Each user can keep them on his account and interact with the site. Both entrepreneurs and ordinary people can take part in saving the environment.
Tokens are awarded for various actions, for example, for purchasing goods from partner companies. The user can choose any suitable brand and make the usual purchases, both online and offline.
For making purchases in any case, customers receive IMPT. Also, these tokens can be bought independently, for cryptocurrency or fiat. They can then be spent on carbon credits, traded and earned points. Most points are awarded for burning loans, that is, withdrawing them from circulation. Each such burning is a feasible help to projects fighting against climate change.
- an investment that is profitable in all respects;
- availability of a referral program;
- helping the environment.
This protocol is used to obtain blockchain information. It is thanks to Graph that many decentralized applications exist. The project is in demand and processes millions of requests every month. The benefit of Graph is also that applications are able to work without the presence of servers. Active users make a profit for information transfer services. This state of affairs deprives the monopolists of power. Plus, Graph offers more secure sources of information.
That is why you should not underestimate the GRT cryptocurrency at all. It is highly likely that the rate will soon rise in price.
- numerous applications;
- friendly community;
- regular burning of tokens.
Members of the crypto community don’t pay due attention to the IOTA project, the blockchain and the ecosystem, which can change the structure of the Internet of Things. The project is ahead of its time.
It is a distributed ledger with source code that allows you to conduct fast transactions. There are no blocks in the IOTA ecosystem. When transmitting IOTA, the sender automatically approves/validates two extraneous transactions in the ecosystem. Such a scheme was originally intended for the Internet of Things, for marketplaces and stores. In the future, IOTA technology can be used in the automotive industry.
Back in 2020, the European Union, the United Kingdom and the United States announced their plans to reduce carbon dioxide emissions into the atmosphere. Countries are switching to environmentally friendly fuel materials and vehicles that use alternative energy.
Tesla's success has shown that such cars are in demand and investments in their production pay off. It is also worth paying attention to the interest of manufacturers in the creation of "smart" equipment that can solve user problems. As an example, you can point to cars with autopilot. There is a development of cars that can exchange data with each other. IOTA positions itself as a project that can solve this problem.
You can also pay attention to the statements of the IOTA team that the project does not charge commissions during data transfer. This approach makes it the most attractive for smart car manufacturers. Moreover, IOTA proposes to install an embedded wallet in the car, which could make contactless payments for parking, recharging, toll roads and so on. IOTA technology can also find its application in many areas where large amounts of data need to be processed quickly.
- variety of projects to use;
- exemption from paying commissions.
The Polkadot project is currently under active development. The creators are developing new products that can attract the attention of investors. Which, in turn, will significantly increase the degree of competitiveness of the project's own coin – DOT. It is noteworthy that the creators of DOT want to surpass ETH. And although this idea is perceived as something incredible, one cannot deny the real prospects for the growth of the rate of this coin. Over time, investors will appreciate the prospects of the project.
Factors Affecting the Price of Coins
As you know, the price of assets is influenced by two main forces – supply and demand. In turn, their balance is influenced by such factors:
- News – any information in the media affects the prospect of course development.
- Scope – the rate of the coin will be unstable if it is used for speculation.
- Community – the more participants, the higher the interest and the more investments.
- The prevalence rate – the number of exchanges where the coin can be bought or sold.
- Emission – if the number of units of a particular digital currency is limited, it is not subject to inflation.
How to Understand If It Is Worth Investing in a Coin?
The secret of a profitable investment portfolio is the division of capital into two parts. One should be invested in the leaders of the cryptocurrency market, the other – in undervalued coins. But each of them should be analyzed before making a purchase decision. To do this, you need to consider the following points:
- A white paper – description of the technological aspects of a project of interest.
- Roadmap – stages of project development.
- Creators – it is important to evaluate their qualifications, to make sure of their experience.
- Tokenomics – you need to clarify how many coins are planned to be issued and how they will be distributed. This affects supply and demand.
What Are the Risks?
Digital scam attacks. Experts are sure that this problem has become the main “splinter” of the cryptocurrency market for a long time. And this cannot be ignored.
Lack of legal basis. Today's exchanges rarely provide clients with insurance funds. And in case of problems, there is nowhere to wait for help.
The degree of volatility. Changes in the course depend on many factors that are not easy to keep track of. Therefore, forecasts can often be erroneous.
The basis of investing is maintaining a balance between profit and risks. Even undervalued coins can generate income. A small amount of investment will allow you to minimize the risks as much as possible. In addition, most altcoins have the potential for impressive growth. After all, each development team tries to make their project maximally useful and make sure that it is noticed.