It’s tempting to consider buying one or more of the cryptocurrencies trading for less than a penny. Sure, most of them will fail to take off, and will end up lost in the sands of time. But, for the names that survive? They could generate jaw-dropping returns for investors who get in early. With this high-risk, but extremely high-possible return, dynamic at play, what does that mean for Holo (CCC:HOT-USD), the native token of Holochain?
Trading for fractions of a penny as recently as February, Holo took off during this spring’s mad rush into altcoins.
At its high point, in early April, it briefly hit prices topping 3 cents, but it began its rapid descent back to earth after going parabolic.
Even after selling off (before, during, and after last month’s crash), Holo has held onto quite a bit of its 2021 gains. So, what’s the best move right now? Its likelihood of becoming widely used may be slim, but its unique design gives it some potential. With this, it has a greater chance of success than most of the other low-priced altcoins.
Again, that’s not to say it isn’t a long shot. It’s still far behind the other front-runners and even the “also-rans” in this horse race. But, even if the handicappers are rightly pricing this at 99-to-1, it could still be a worthwhile wager.
Is Holo a Possible Dark Horse ‘Ethereum Killer?’
There are scores of platforms that could challenge Ethereum’s (CCC:ETH-USD) current position in the DeFi (decentralized finance) pecking order, but only a few will grab a meaningful amount of its current market share.
Could Holochain be considered a dark horse contender? It’s possible. This platform has advantages when it comes to scalability, security, and transaction fees.
Sure, that’s good and all. Yet, “building a better mousetrap” is par for the course when it comes to these “Ethereum killers.”
HOT is more than an Ethereum alternative, though. This framework is a blockchain alternative as well.
In a nutshell, it’s an even more decentralized platform. As InvestorPlace’s David Moadel discussed, it logs transactions on individual nodes rather than on a public ledger. Coupled with other features that give its users more autonomy, it may find appeal with developers of decentralized applications (dApps).
This could drive many of them to switch over to this platform. In turn, as Holo is used to compensate hosts who provide network computing power, its increased usage could result in this token’s price rising over time. Yet, while there’s a path,
Tough to Gain Critical Mass
There’s a reason why the native token of Holochain trades for less than a penny today. Its unique design may give it the potential to “disrupt the disruptor.” That is, over time, blockchain alternatives such as this one could become just as, if not more, popular than platforms that run using the standard blockchain framework.
Until this starts to happen, demand for (and the price of) its tokens is going to remain low. Ethereum’s challengers may be gaining on it, but with its pending 2.0 upgrades, the narrative that it’s losing its commanding lead may be overblown.
Also, given the differing way Holochain works relative to the other possible “Ethereum killers,” decentralized application developers may end up sticking to what they’re used to: blockchains. This again puts this alternative way behind Cardano, Polygon, Solana, and the rest.
This platform may be offering a more appealing framework for which to run decentralized applications. But, this alone hardly guarantees its success. This space may still be a wide open field.
If Ethereum maintains its lead and other blockchains lock up the rest of the market, though, Holochain may (at best) end up as only a niche platform. Without more widespread use, it’s going to be tough for its native token to rise above a penny.
Bottom Line: An Appealing Long-Shot, but Bet Accordingly
Holo may have a low chance of taking off. Yet, among low-priced cryptos, at least this one has some degree of potential. This sets it apart from the scores of low-priced, speculative cryptos, few of which have DeFi/dApp catalysts.
Putting it simply, Holochain is the 99-to-1 long-shot in this horse race. That is, it may likely rally from a penny to a dollar if it hits. Risk-hungry crypto speculators may like these odds. Just bet accordingly, because the chances of it finding big time success remain slim at best.
On the date of publication, Thomas Niel held a long position in Ethereum. He did not have (either directly or indirectly) any positions in any other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.