Altcoins have become a hot topic of discussion on Wall Street. Given the returns over the past year, investors want to participate in potentially robust crypto moves. Following the recent declines in prices of most digital currencies, a slow but steady recovery promises to pave the way for some digital coins to shine in June. Today’s article discusses seven altcoins that should be on your watch in the coming weeks.
On the global front, analysts keep a close watch on China, which has “banned financial institutions and payment companies from offering services related to cryptocurrency trading and warned investors not to get involved in cryptocurrency trading.” In an opposite move, El Salvador became the first nation that officially classified Bitcoin (CCC:BTC-USD) as legal currency.
Meanwhile, institutional interest in the crypto space is on the rise, too. Apple (NASDAQ:AAPL), Deutsche Bank (NYSE:DB), Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google, Facebook (NASDAQ:FB), PayPal (NASDAQ:PYPL), and Tesla (NASDAQ:TSLA) have already made it public that cryptocurrencies are among their long-term strategic goals.
The second half of the year is still poised to hold many surprises for crypto investors. These altcoins mostly trade at modest prices, offering a lower threshold to entry for investors.
However, we should warn readers that as digital coins are extremely volatile, investors should exercise caution. With that said, here are seven altcoins poised for a rally:
- Compound (CCC:COMP-USD)
- Nano (CCC:NANO-USD)
- Neo (CCC:NEO-USD)
- Solana (CCC:SOL1-USD)
- Theta (CCC:THETA-USD)
- ThorChain (CCC:RUNE-USD)
- Waves (CCC:WAVES-USD)
Crypto to Buy: Compound (COMP-USD)
52-week range: $93.41 – $911.20
Market capitalization: $1.4 billion
Compound is a protocol on the Ethereum (CCC:ETH-USD) blockchain that aims to establish money markets. In the crypto space, money markets constitute pools of assets with algorithmically derived interest rates based on supply and demand for a specific asset. Suppliers or borrowers of an asset interact directly with the protocol, earning or paying a floating interest rate without the need to negotiate terms such as maturity, interest rate or collateral with a peer or counterparty.
Each money market is unique to an Ethereum asset. It contains a transparent and publicly inspectable ledger that includes a record of all transactions and historic interest rates. Investors with long-term investments in ETH-USD and other altcoins can use the Compound money market as a source of additional returns on their investment.
Decentralized applications (dApps) and exchanges with token balances can also use Compound as a source of monetization and incremental returns. Analysts point out that Compound could have significant long-term potential, as it promises to unlock entirely new business models for the Ethereum ecosystem.
For instance, without a need to wait for an order to fill or require off-chain behavior, dApps are capable of borrowing tokens to use in the Ethereum ecosystem. Investors can finance new Initial Coin Offerings (ICOs) by borrowing ETH-USD and using their existing portfolio as collateral. In addition, traders looking to short a token can borrow the token, send it to an exchange and sell the token, thereby profiting from declines in overvalued tokens.
COMP-USD currently hovers around $270, up over 147% year-to-date (YTD). Given the recent decline in price, interested investors could consider buying the dips.
Source: Lucio Libanori / Shutterstock.com
52-week range: $0.67 – $17.49
Market cap: $650 million
Nano wants to make money efficient and accessible for everyone. It was created by Colin LeMahieu, CEO and founder of the Nano Foundation. Launched under the name RaiBlocks in 2014, the project was rebranded as Nano in January 2018.
The altcoin does not rely on mining, printing or minting. Therefore, it is regarded as an eco-friendly cryptocurrency with less of a carbon footprint in comparison to other bigger cryptocurrencies. It claims to be a sustainable digital coin, requiring minimal resources to operate while processing a high transaction throughput.
Nano is fee-less and can instantly be exchanged into any currency. Each account comes with its own blockchain that only the owner can update. Users sign a transaction that updates their ledger and broadcasts it out to the Nano network.
Once Nano nodes see enough confirmations to validate a transaction, they independently confirm the transaction as irreversible, updating their copy of the ledger. This is a unique feature in the crypto space. All transactions are stored into blocks with a finite capacity, and users need to pay a fee to create new blocks.
Users may find Nano a compelling cryptocurrency, as it can process a high transaction throughput with minimal resources. The Nano convention can keep running on low-control equipment. For example, on the online gaming platform Steam, users have been recommending the use of Nano.
NANO-USD is currently shy of $5, up about 373% YTD. However, it is significantly down from its record highs, seen in April. This altcoin deserves to be on your watchlist.
Crypto to Buy: Neo (NEO-USD)
Source: Wit Olszewski / Shutterstock.com
52-week range: $9.54 – $140.37
Market cap: $2.5 billion
Neo was designed to use blockchain technology to digitize assets using smart contracts and a standard programming language, similar to Ethereum. It was founded by Da Hongfei and Erik Zhang in 2014. Initially launched under the name Antshares, the project was rebranded as Neo in June 2017.
The altcoin has a current supply of 100 million tokens with 70.5 million in circulation. Tokens are indivisible. The platform has a dual token mechanism that separates the rights of using the network from governance rights.
Put another way, the digital coin has two main features — the right to vote and participate in the governance of the network and to claim GAS tokens needed to perform transactions on the Neo network. As highlighted by its website, the “network charges GAS for the operation and storage of tokens and smart contracts.”
Neo is currently being upgraded to version 3.0, known as N3, which aims to bring “the first all-in-one blockchain development experience to the industry, packed with powerful native features such as distributed storage, oracles, and name services.”
NEO-USD currently trades around $34, up about 134% YTD. It might be a while for the altcoin price to return to the all-time-high (ATH) seen in the spring. However, buy-and-hold investors could begin to find value around these levels.
52-week range: $0.64 – $58.30
Market cap: $8.6 billion
The Solana blockchain aims to challenge the Ethereum blockchain by offering high-speed processing and low fees. SOL1-USD, the network’s native cryptocurrency, has gained significant traction in 2021. There are more than 272.6 million coins in circulation, with no fixed supply.
The Solana Labs project was founded in 2017 by Anatoly Yakovenko, and the Solana protocol was later launched in April 2020. The Solana Foundation, which develops the open-source blockchain project, is based in Geneva, Switzerland.
Solana employs a hybrid protocol combining its proof-of-history (PoH) consensus algorithm with the proof-of-stake (PoS) consensus. PoH “can provide a way to cryptographically verify passage of time between two events.” On the other hand, in PoS, “the rate of validation of transactions on the blockchain occurs according to how many coins a person holds.”
There are currently more than 250 projects in the Solana ecosystem. To the delight of its fans, unconfirmed reports suggest that Solana is soon planning to raise between $300 million and $450 million in response to high demand.
SOL1-USD was trading at $1.51 at the start of 2021. The price skyrocketed to an ATH of $58.30 on May 18 before plunging back down to $20 territory during the market selloff. SOL1-USD currently trades just under $32, up more than 1,600% YTD. Its followers believe that Solana is taking rapid and confident steps in becoming one of the so-called “Ethereum killers” in the long run.
Crypto to Buy: Theta (THETA-USD)
52-week range: $0.20 – $15.90
Market cap: $7.23 billion
THETA-USD is an altcoin of the blockchain-based video-streaming platform Theta Network. Users depend on the open-source network “to simultaneously watch video content and earn token rewards for relaying video to other users who are also watching the same content.”
Among the platform’s advisors are Steve Chen, co-founder of YouTube, and Justin Kan of Twitch, which is owned by Amazon (NASDAQ:AMZN). According to Chen, Theta’s “decentralized peer-to-peer network … can offer improved video delivery at lower costs.”
The Theta network uses two types of tokens. Theta pays users Theta Fuel (CCC:TFUEL-USD) for extending their computer’s bandwidth into the network, while THETA-USD functions as stimulus money for users that contribute excess bandwidth and computing resources. The supply of THETA-USD is fixed at one billion and will never increase.
The altcoin is likely to strengthen its position against other cryptocurrencies thanks to its growing list of partnerships. For example, Theta Labs’ “enterprise validator and governance council program” already includes Alphabet, Samsung, Sony (NYSE:SONY), Creative Artists Agency, Binance (CCC:BNB-USD), Blockchain.com and Gumi. According to CEO Mitch Liu, “Theta Network is quickly moving towards full decentralization with 14 enterprise validators.”
In April, the World Poker Tour and Theta Network announced their partnership to launch a non-fungible token (NFT) marketplace. THETA-USD currently hovers around $7.30, up about 270% YTD.
52-week range: $0.30 – $21.26
Market cap: $1.5 billion
ThorChain is a “decentralized cross-chain liquidity protocol” that allows users to “swap freely from one chain to another, one asset to another.” Put another way, the platform that supports interoperable blockchain communications.
Instead of using wrapped coins or intermediaries, ThorChain enables cross-chain swaps with real currencies while still interacting on a decentralized automated market maker (AMM) exchange. On a side note, other AMMs include Bancor and Uniswap.
Those cross-chain trades are powered by RUNE-USD, the native token offered by ThorChain. So far, ThorChain users can make trades with Bitcoin, Ethereum, Litecoin (CCC:LTC-USD), BitcoinCash (CCC:BCH-USD) and Binance. Other altcoins are likely to join the list in the near future.
In each trade, RUNE-USD acts as a settlement currency allowing swaps between any two other assets. For example, a user who wants to swap ETH-USD for BNB-USD would first trade their ETH-USD for RUNE-USD before trading that RUNE-USD for an equivalent amount of BNB-USD.
Investment firm Multicoin Capital has recently announced a major position in the RUNE-USD altcoin. The firm believes ThorChain will help “build products that enable trust-minimized, cross-chain trading.” The second half of the year could easily see the popularity of RUNE-USD grow more.
Crypto to Buy: Waves (WAVES-USD)
52-week range: $1.11 – $41.33
Market cap: $1.42 billion
Waves, the multipurpose blockchain ecosystem that functions as a token launch platform and a decentralized exchange (DEX), was founded by entrepreneur Sasha Ivanov in 2016. It is a fast blockchain with transactions settled quickly with low transaction fees.
WAVES-USD is the official currency of the Waves platform, which enables users to create and launch custom crypto tokens. The Waves ecosystem also includes its own built-in decentralized exchange, namely the Waves.Exchange, where users can trade a newly created coin in a trading pair with any other Waves coin.
Commenting on their near-term goals, founder Sasha Ivanov has recently cited, “Several key directions and milestones will be pursued with the goal of locking at least $10 billion in different DeFi products on Waves until September 2021.” He added, “The Ethereum network has the most liquidity now but, at the same time, is the most congested one. By redirecting part of ETH liquidity to Waves, we help Ethereum and boost Waves’ usability.”
WAVES-USD currently hovers at $13.50, up 125% YTD. Both the ecosystem and the crypto deserve your attention.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.