With Bitcoin having surged 156% year-to-date (YTD) in 2020, there is clearly a growing interest in the crypto asset class among investors. For instance, back in October, billionaire hedge fund manager Paul Tudor Jones opined that Bitcoin’s rally is still in its “first inning.”
More recently, a similar opinion came from investor Mike Novogratz, who said that the infamous cryptocurrency could potentially hit $65,000. I would not be surprised by that, especially considering its supply is limited to 21 million coins.
I believe that asset class diversification is important. And clearly, cryptocurrencies are here to stay. Even BlackRock CEO Larry Fink noted that Bitcoin could “evolve into a global market” asset.
Therefore, it makes sense to allocate some funds to alternative coins (altcoins). For example, Ricardo Pliego has invested 10% of his liquid portfolio in Bitcoin. A 10% to 15% allocation to cryptocurrencies could boost any portfolio returns.
According to data from CoinGecko, there are over 6,000 coins listed in 417 exchanges. But looking further into the world of altcoins, I found some attractive medium- to long-term opportunities that I think can outperform Bitcoin in the future.
So, let’s delve deeper into these three promising crypto picks:
- SingularityNet (AGI)
- Filecoin (FIL)
- Vidt Datalink (VIDT)
Crypto to Buy: SingularityNet (AGI)
AGI crypto is among the smaller names in the altcoin industry, but it has big potential. Artificial Intelligence (AI) has been the subject of much interest and investment opportunities. For the current year, the global AI software market is expected to grow approximately 54% year-over-year (YOY). That growth will likely remain strong in the next five years.
SingularityNet is the world’s first decentralized AI network. Currently, AGI trades at 5 cents with a circulating supply of over 950 million coins. I would not be surprised if the crypto delivers multifold returns from current levels.
However, one of the biggest reasons to be bullish on AGI is the team behind the business. Ben Goertzel is the CEO at SingularityNet and the “AI pioneer behind Sophia the Robot.” Therefore, the team is high on innovation with a vision to bring decentralized AI to companies. In terms of products, this altcoin offers one of the largest open AI marketplaces in the world.
So, clearly AGI’s industry is attractive. Right now, it looks undervalued at current levels.
The cloud computing market is already big and is growing at a healthy pace. However, the market is dominated by only a few players, including Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Alibaba (NYSE:BABA). These names are all part of the centralized network of cloud service providers.
This is where Filecoin becomes interesting as an investment. The company is among the few decentralized cloud service providers in the world. The coin, FIL, is a relatively new listing on exchanges and I believe that the altcoin has potential to deliver robust long-term returns.
When it comes to its business progress, the following company note is already encouraging:
“Fewer than four weeks after its mainnet launch, the Filecoin network is celebrating a major milestone. As of today, the global community of Filecoin miners has dedicated 1 exbibyte (EiB) of decentralized storage capacity to the Filecoin network.”
In the altcoin world, there are thousands of names to choose from. So, it makes the most sense to invest in coins that are backed by a strong business plan. From that perspective, Filecoin is one of the better crypto picks.
Vidt Datalink (VIDT)
Last on my list of cryptocurrencies is Vidt, another interesting name to consider out of all the altcoins.
As a business overview, Vidt Datalink protects digital data of organizations against fraud and manipulation. The unique feature of the company’s application is that V-ID — its main blockchain component — is compatible with any existing system without impacting the workflows. Therefore, organizations will not find it challenging to adopt the company’s blockchain-powered document certification and protection service.
In the last year, the Vidt coin has surged by almost 845%. However, at over 70 cents, the crypto is still attractive from a long-term perspective.
It’s also worth noting that Vidt has a maximum supply of just 56.7 million coins. Limited supply can push the coin price higher as strong business developments continue.
The company already has clients that include the likes of AmSpec and IBM (NYSE:IBM). That blue-chip client base is an indication of its service quality. Again, it’s great when an altcoin has this sort of strong company behind it.
Overall, I think this crypto has the potential to deliver multifold returns even after its big rally in the last one year. As the client base swells, this name will likely trend higher.
On the date of publication, Faisal Humayun did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modelling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.