Up until mid-November, arguably most cryptocurrency investors were enthused about Bitcoin (CCC:BTC-USD) swinging toward the once-mythical target, $100,000. Yes, that link is a trip down memory lane, where almost four years ago to the date I mentioned that Bitcoin at $10,000 was no bubble. Further, I posited the idea of the coin hitting six figures. Cryptos being what they are, I was both right and wrong.
Obviously, Bitcoin was a bubble. To be fair, BTC did swing close to the $20,000 mark so investors who bought in at 10k weren’t necessarily complaining. And while they must have complained when BTC eventually dropped to approximately the $3,300 level, I was generally right about the upward trajectory of cryptos. As I said back then, “the only grey area is the timing.”
Now, the timing is back at the center of the discussion. Since the middle of this month, BTC dropped below critical psychological thresholds, first falling below $60,000 and then threatening to hit the $55,000 floor. Fortunately, this level has held strong against bearish attacks. Nevertheless, most other cryptos experienced a bout of volatility as the sector benchmark struggled for traction.
Personally, I would adopt a careful approach. Although BTC’s resilience is encouraging, I’m not liking the overexuberance of this market. For instance, NFL wide receiver Odell Beckham Jr. generated headlines when he announced accepting his new salary with Bitcoin. Further, you have behemoth banking institutions that long opposed cryptos that are now scrambling to offer digital-asset-related services.
I’m reminded about what the Oracle of Omaha Warren Buffett once said: be fearful when others are greedy and greedy when others are fearful. Still, if this time is different — dangerous words, I know — you might want to consider these alternative cryptos which are now on discount:
- OMG Network (CCC:OMG-USD)
- PancakeSwap (CCC:CAKE-USD)
- IoTex (CCC:IOTX-USD)
- Filecoin (CCC:FIL-USD)
While I’ve generally been pensive about chasing the exuberance in cryptos in recent months, that’s not to say that the consensus among experts is negative. Indeed, many see Bitcoin at $100,000 as a realistic proposition in the first quarter of 2022 or conservatively, sometime around 2023. The point is, do your due diligence before riding this wild market.
Cryptos to Watch: Ethereum (ETH)
To be upfront, Ethereum is only on discount relative to its all-time high of nearly $4,900. Since mid-November, ETH has gyrated in a frustrated and perhaps somewhat worrying consolidation pattern between a hair under $4,000 to $4,430.
But compared to Bitcoin, ETH has enjoyed the better of the performance metrics. As I write this heading into the Thanksgiving holiday, Ethereum is down 1.5% over the past 24 hours but up 1.6% during the trailing week. In contrast, Bitcoin is down 1.5% and 5.2%, respectively.
Nevertheless, it’s worthwhile for supporters of cryptos to keep track of the ETH price. Specifically, many blockchain advocates are anticipating an event called the flippening, where Ethereum’s market capitalization will surpass that of Bitcoin’s. Some experts suggest that this role reversal could happen in the current market cycle.
To probably no one’s surprise, I’m skeptical. While Ethereum is clearly the more utilitarian of the two, that has not necessarily been the core driver of increased valuations for cryptos. It’s going to be tough for any asset to overcome Bitcoin’s brand dominance.
Still, you never know what will happen with cryptos so it’s worth keeping ETH on your radar.
Shiba Inu (SHIB)
You say you’re tired of hearing about meme trade Shiba Inu. Yet internet statistics don’t lie. Time and time again, SHIB dominates other cryptos in terms of sheer interest. At this rate, you could set up your own Shiba Inu blog and have a lucrative side hustle just talking about this blockchain phenomenon.
However, things have not looked very promising for the canine-inspired token. On Oct. 27 of this year, SHIB reached a high of 0.008719 cents. At time of writing, the price per token has dropped to under 0.004 cents. That’s a staggering loss of 54% no matter how you look at it.
Even more problematic from a technical perspective, SHIB continues to print red ink. What the heck is going on?
I believe two basic schools of thought exist. First, early Shiba Inu proponents are waking up to the ludicrousness of the matter and are taking profits. If that’s the case, I can’t fault them there. I’d rather have cash than a bunch of digital decentralized promises.
Second, the fallout could represent a contrarian opportunity. Here, the credibility lies in the underlying community’s rabid support, which is nothing short of extraordinary.
Cryptos to Watch: OMG Network (OMG)
Thanks to the exceptional rally of Bitcoin, several cryptos with a long track record tagged along for the ride. In turn, many of these altcoins printed their own all-time highs, to the obvious delight of their stakeholders. However, not all digital assets were so fortunate. OMG Network is but one example.
In January 2018 — following the rapid rise and fall of Bitcoin — OMG managed to break out of its correlation with BTC and break above the $25 level. However, it turned out to be a brief victory, with the token careening toward the ground. Following two pronounced dead-cat bounces, OMG engaged in a long deflationary cycle, turning the asset into the blockchain’s version of a penny stock.
In the trailing month, OMG got tantalizingly close to the $20 level, briefly passing it on Nov. 4. However, failing to stay above this key psychological level spelled trouble. At time of writing, OMG tokens are trading hands at below $9.
Still, sentiment remains strong with cryptos. Considering that so many folks are looking for discounts in this sector, OMG might be speculation worth considering.
If you’ve been watching business news over the last few weeks, you’ve undoubtedly heard about the metaverse. While people bicker online about the true meaning of the movement, I view it broadly as the next evolution of the internet. That is, rather than users connecting to each other through their computers, it’s now possible to bring the experience closer through advances in virtual and augmented reality.
Well, the blockchain is also undergoing its revolution. No longer are users confined to peer-to-peer transactions as was the case with Bitcoin. Today, proponents are exploring multiple applications of the underlying technology, ranging from smart contracts to decentralized finance (DeFi). One of the most groundbreaking innovations, though, is the automated market maker (AMM).
PancakeSwap represents one of the pioneers of AMM, which allows anyone with an internet connection to participate in the market making process; in other words, provide liquidity for crypto-trading pairs. Basically, PancakeSwap decentralizes investing markets, enabling greater utility and autonomy for digital assets.
However, the bears have come after CAKE, with the token shedding 14% of market value over the trailing week. Still, some might view this as a discounted opportunity on an intriguing concept.
Cryptos to Watch: IoTex (IOTX)
One of the distinct aspects of investing in cryptos is that it’s almost impossible now to run out of ideas. At time of writing, there are over 14,700 coins and tokens floating around in cyberspace monitored by CoinMarketCap, waiting to be discovered. It wasn’t too long ago that I was making a big deal about the availability of 13,000 coins.
For context, a Benzinga analysis revealed that as of August, there were 5,866 companies with U.S.-listed stocks from which investors can choose. Cryptos dominate in terms of total offerings.
However, that’s a double-edged sword, as IoTex stakeholders discovered. According to CoinMarketCap, “IoTeX has built a decentralized platform whose aim is to empower the open economics for machines — an open ecosystem where people and machines can interact with guaranteed trust, free will, and under properly designed economic incentives.”
That sounds wonderful and all, but sentiment appears to be waning. Further, technical pressures suggest that IOTX could fall to 10 cents. Here’s the thing: if it does plummet that low, contrarians will probably scoop up the coins given their grassroots popularity.
Ordinarily, I’ve been skeptical about the overall utility of the latest blockchain projects that promise to leverage the power of decentralization to promote frictionless, trustless transactions across myriad applications. Yes, the blockchain has proven capable of promoting trustless ecosystems but the underlying financial incentive is tied to cryptos.
Until actual currencies trade hands under a decentralized platform, it will be extraordinarily difficult for blockchain projects to climb the credibility barrier. Nevertheless, Filecoin has been one of the few networks that has attracted me with its practical proposition.
As CoinMarketCap explains, “Filecoin aims to store data in a decentralized manner.” Unlike traditional data storage solutions, “Filecoin leverages its decentralized nature to protect the integrity of a data’s location, making it easily retrievable and hard to censor.”
What makes the platform stand out is that anyone can contribute their unused capacity to support the ecosystem. In return, they receive cryptos for their trouble. True, this subjects contributors to extreme volatility for their rewards. At the same time, they can choose to contribute at their own leisure, which makes the whole concept palatable and realistic.
Cryptos to Watch: Chainlink (LINK)
Although novel solutions using blockchain technology have flourished over the years, many critics pointed out that the mechanisms to catalyze advanced transactions are localized to the blockchain. In other words, it’s wonderful that a smart contract can cut out the middleman between a buyer and a seller. However, if the underlying deal involves an off-blockchain data point to verify execution of the contract, how would that be recognized?
Chainlink is one of the pioneers that have figured out the answer to this perplexing problem. Per CoinMarketCap, it’s “one of the first networks to allow the integration of off-chain data into smart contracts.” This opens up many possibilities regarding end uses. For instance, Chainlink could theoretically provide automatic payments for wagers placed on the outcome of a sports competition. Essentially, LINK takes the training wheels off of cryptos.
However, the market isn’t exactly seeing it that way, with LINK suffering a 11.6% loss over the trailing seven days and down 51% from its all-time high. Still, strong community support along with interest in the underlying technology could see contrarians bolster this token.
On the date of publication, Josh Enomoto held a LONG position in BTC, ETH and LINK. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management and healthcare.