Crypto is coming off of a bearish run that has taken up much of 2022. The market has returned to form in the last week, as Bitcoin (BTC-USD) surged north of $40,000 once again. As the industry tries to shakes off the broad downward tear, investors are seeking out undervalued cryptos. So which names are ready for big gains this year?
Last year saw millions of people buy crypto for the first time. Investors largely pursued mainstream coins like Bitcoin, with some meme tokens like Shiba Inu (SHIB-USD) drawing attention. This year, however, is seeing a broader range of interests. Web 3.0 and metaverse cryptos, as well as stablecoins, are sparking curiosity. And in each of these respective niches, there are players that are carving out their space as leaders.
So, what are the best undervalued cryptos to buy for 2022? Consider some of these:
Undervalued Cryptos to Buy: Avalanche (AVAX-USD)
Layer-1 networks will always have a place in the blockchain hierarchy. Avalanche is one such layer-1, and it is poising itself for big gains in the future. The network has undergone a massive growth period in the last year, and its prospects are sky-high.
Avalanche had an absolutely explosive 2021. On Jan. 1, one could buy an AVAX coin for under $3.50. When it reached its all-time high in November, those coins were trading for $134. Of course, Bitcoin’s faltering at the end of that month brought most of the industry with it on a downward spiral. Ultimately, AVAX found its floor below $60 in late January. However, it’s already back on its feet, gaining almost 40% in the last month.
While Avalanche is still on the mend, this could be a solid window to invest in the project. Indeed, while we have an idea of just how high AVAX can soar in only a few weeks’ time, we also see how its network is rapidly growing in scale. The network has over 500,000 active users, many of whom are coming directly from Avalanche’s most glaring competitor — Ethereum (ETH-USD). Since August, the total value locked (TVL) into the network has grown from $312 million to $8.4 billion, an increase of 2,600%.
One can certainly attribute Avalanche’s blisteringly fast growth to the flight of decentralized application (DApp) developers to the platform. In the last year and a half, over 360 new projects have launched on Avalanche, allowing users to find more and more use cases for AVAX, all without the exorbitant gas fees that one experiences on Ethereum.
Let’s face it: All Web 3.0 projects are undervalued right now. That’s due in large part to both its newness and intangibility. Web 3.0 projects range in style and in use, but they’re grouped together under the Web 3.0 umbrella because they seek to correct the downfalls of centralization on the internet.
Chainlink could be thought of in some ways as the Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) of Web 3.0. The project seeks to bring real-time data to any and every project that needs it. It does this through decentralized oracles, which port all sorts of data to the blockchain. Using Chainlink, a developer can create a weather DApp or a news DApp. Market makers can even use Chainlink to fetch the most accurate asset price data.
One of the biggest draws to Chainlink is that it holds all of these great capabilities, and it is interoperable. Developers can deploy Chainlink oracles across the Ethereum network, the Binance (BNB-USD) Smart Chain and onward.
Chainlink continues to beef up the data it offers seemingly every month. With partnerships from crypto exchange giants like Binance, Huobi and Kraken, as well as data aggregator CoinGecko, the network is able to provide some of the most accurate pricing data to developers. Moreover, it is taking on non-crypto data reporting through recent partnerships with the likes of the Associated Press.
Undervalued Cryptos to Buy: Helium (HNT-USD)
Helium is another network looking to press Web 3.0 further into reality. But rather than taking on a decentralized alternative to software like Chainlink, Helium looks to decentralize the internet through hardware.
By covering the globe in its own hotspots, Helium hopes to provide access to fast, wireless internet. Users can buy their own hotspots to help the network achieve this goal. The Helium website has a list of compatible hardware. From there, users simply plug in the hotspot and begin reaping the reward of contributing. Every time somebody connects to the hardware, the host is rewarded with HNT tokens. It effectively turns the router into a mining device.
As the number of total devices grows, so too does the power of the network. Already, there are 600,000 hotspots registered to the Helium network. Primarily, the devices serve users in the U.S. and Europe, with additional growing support in Asia and Australia. These hotspots are purported by developers to be project a signal twice as long as traditional WiFi.
The technology Helium presents is in direct competition with some of the biggest internet service providers (ISPs) in the world. In fact, the network directly compares itself to companies like AT&T (NYSE:T) and Verizon (NYSE:VZ). The most glaring differences between the network and these businesses is the fact that with Helium, users can pay directly based on how much data their devices use. By offering unlimited data, the network is able to subvert overage fees while also tailoring payments to exactly what each user needs. Also, unlike traditional ISPs, Helium devices do not need subscriber identity module (SIM) cards, allowing users more freedom in where they obtain their devices.
Polkadot is an underrated play, considering its savvy parachain technology and the role it is playing in offering up a new blockchain technology. Indeed, through Polkadot’s parachains, DApp developers have more freedom and more support than ever before.
The parachain model is an approach to the blockchain that focuses on interoperability. Rather than having a single chain recording all of the data of DApps running on Polkadot, each project gets its own dedicated chain to record data. In total, there are 100 Polkadot parachains. Polkadot does have a canary network called Kusama (KSM-USD) as well, with its own set of 100 chains.
DApp projects vie for parachain slots through the network’s robust auction process. Winners of these auctions receive their own parachain, alongside assistance from Polkadot’s support team. These chains mean high performance, since there are not other DApps bottlenecking the chain. But, since they are all projects under the Polkadot umbrella, users can seamlessly port data from one parachain to another.
Atop its own network of dedicated chains, Polkadot promotes interoperability with other networks as a priority. As another Web 3.0 play, Polkadot focuses on decentralizing data, allowing one to keep all of their data private. As such, the network invites developers to build and connect new blockchains to the network. These chains can coexist in a connected environment, then, while only having to share necessary data with each other. This essentially lays the groundwork for a globally decentralized internet.
Undervalued Cryptos to Buy: Enjin Coin (ENJ-USD)
For as red-hot as non-fungible tokens (NFTs) are, Enjin Coin is a severely underrated token. The project is one of the best introductions to not only using NFTs, but also in minting and integrating them across games and other apps.
Enjin is one of the oldest blockchain projects on the market, founded in 2009. Founded originally as a community gaming platform, the project is taking on a trailblazing model in recent years. It launched on the Ethereum network with its ENJ token in 2017. Since then, the project is pivoting toward bridging gaming and ERC-1155 assets — tokens minted according to Ethereum’s rigorous standard.
For the last four years, Enjin has been providing a tech stack for users to develop gaming-centric apps on the blockchain. Focusing primarily around NFTs nowadays, the protocol allows users to mint their own NFTs with no coding necessary. Rather, one can follow an easy-to-use visual interface that only takes minutes. Users can then bridge these NFTs across any number of blockchain networks.
It also recently launched a companion network, Efinity (EFI-USD). Through Efinity, game developers can mint NFTs of in-game items that users can trade. Not only this, but users can take the NFTs on Efinity from game to game, allowing them to use items from one game in another. Earlier in the year, Efinity won a Polkadot parachain slot, granting it access to its own dedicated blockchain.
With all of these NFT capabilities, one is left to wonder why the project is not much larger. With only a $1.3 billion market capitalization, and a simple and wildly useful service for an industry expected to reach $35 billion this year, it’s not at all a stretch to consider ENJ undervalued.
On the date of publication, Brenden Rearick 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.