Although many cryptos have been tumbling recently, and the broader crypto market may need to combat more headwinds, it is still a great time to snap up some hidden-gem cryptocurrencies. Many projects have near-term catalysts or fundamentals that can propel them from their current range, and an entry point at their current price can deliver multibagger returns in the long run, regardless of near-term price action.
Moreover, the crypto market is likely poised for a major rally next year, as the Bitcoin (BTC-USD) halving event is due in 2024. Historically, Bitcoin has surged in the months leading up to and following the halving, and this time should be no different.
However, the crypto market is not dependent solely on Bitcoin. Many other factors influence the demand and sentiment for cryptos, such as regulation, innovation, adoption and competition. One of the most important factors is the Federal Reserve’s monetary policy, which affects the value of the U.S. dollar and the interest rates.
In its recent June FOMC meeting, the Fed paused its rate hikes but indicated two more this year. However, this may not materialize if inflation keeps falling faster than expected. The core CPI will likely drop below the current rate soon, and the Fed may have to cut rates instead if more economic headwinds start appearing, which would be bullish for cryptos.
With that in mind, I believe now is a good time to buy some cryptos with strong fundamentals and growth potential.
In this article, I will discuss three such hidden-gem cryptos that I think are undervalued and poised for a breakout.
Nervos Network (CKB-USD) is an open-source public blockchain ecosystem that aims to create a peer-to-peer crypto-economy network. It has a dual-layer architecture that separates consensus and computation, allowing for scalability and interoperability. The base layer, also known as the Common Knowledge Base, is where the network achieves consensus using proof-of-work and stores smart assets.
I believe Nervos Network has a lot of potential to succeed in the blockchain industry. It has a modular design that enables developers to create decentralized applications that can operate on various blockchain systems. It also supports easy interoperability with any heterogeneous blockchains and anchors any type of sidechains, state channels and Layer 2 networks.
Of course, Nervos Network is not without challenges. It faces competition from other blockchain platforms that offer similar features and benefits and has a relatively high supply inflation rate of 23%. The momentum also hasn’t been the best for Nervos Network lately. Still, the cryptocurrency has one catalyst that can cause it to surge this year: the expected halving event sometime in November. This event will reduce the block reward for miners by 50%, creating a supply shock that could boost the price of CKB. Thus, I’m optimistic about CKB for both the short and long term.
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Secret Network (SCRT-USD) has been all but bleeding through all of 2022 and this year. The privacy-focused blockchain that enables smart contracts with encrypted data has seen its token price drop by an eye-watering 97.3% from its all-time high of $10.64 to around 30 cents as of this writing. The main reason for this decline is the dwindling popularity of non-fungible tokens (NFTs) and a decrease in new use cases being found for smart contracts.
However, I believe that this is a short-sighted view that ignores the long-term potential of Secret Network and its unique value proposition. Smart contract use cases are still in their early stages and will only grow as more developers and users discover the benefits of privacy and interoperability that Secret Network offers. Moreover, the fall in NFT sales has been priced in, and Secret Network is not dependent on NFTs alone. Secret’s smart contracts support various forms of media, including music and videos, which have customizable privacy features that can create new possibilities for digital assets.
With that in mind, I think that Secret Network is a great long-term buy at its current range. Especially with the market cap nearing $60 million and the token having low inflation.
Source: Vit-Mar / Shutterstock.com
Numbers Protocol (NUM-USD) is a great low-cap bet and I find the project interesting due to the increasing usage of artificial intelligence across all industries. The project provides “provenance for all types of creative works created by humans & AI,” according to its website.
Essentially, the digital platform offers reliable verification solutions for digital media. Its use cases have been tested by users in 180 countries and reputable entities like Reuters, Rolling Stone, Creativity Tools and renowned artists. Thus, I think the risk factor here is lower than many other penny cryptos in its range.
The token currently offers a good entry point, in my opinion. It spiked back in late May and now sits at $0.040 a pop. That can go a lot higher once it starts gaining more recognition – the market capitalization here is a measly $15 million!
On Low-Capitalization and Low-Volume Cryptocurrencies: InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day. That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators. When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
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On the date of publication, Omor Ibne Ehsan 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.