Though circumstances can change at a moment’s notice in the cryptocurrency space, throughout most of Labor Day weekend, the total market capitalization of all cryptos found itself below the psychologically critical $1 trillion threshold. From their peak valuation, digital assets collectively have lost about two-thirds of market value. Nevertheless, contrarian risk-takers may want to strategize with virtual currencies offered at significant discounts.
To be clear, all cryptos – including sector king and pioneer Bitcoin (BTC-USD) – present significant downside threats. But if you do want to participate in this arena, you’re better off dealing with high-volume assets like BTC. Still, Bitcoin is now a well-known entity. To get maximum potential upside, investors must turn to alternative cryptos or altcoins.
Basically a catch-all phrase to describe all non-Bitcoin cryptos, altcoins – particularly the lesser-known ones – represent high-risk, high-reward opportunities. The equity sector equivalent would be penny stocks. Trading at rock-bottom prices, getting the right one at the right time could yield mind-blowing gains.
Of course, the more probable outcome for penny stocks and lesser-known altcoins translates to severe losses. Nevertheless, if you’re willing to take that risk, these are the cryptos to put on your watch list.
Gala (GALA-USD) represents the decentralized ecosystem Gala Games, which features the following ethos: “blockchain games you’ll actually want to play.” Increasingly, video games have evolved from individual silos to multiplayer connected networks. Gala takes this evolution to the next level, incorporating an economic element in the gaming universe.
According to Coinmarketcap, Gala “wants to change the fact that players can spend hundreds of dollars on in-game assets, and countless hours spent playing the game, which could be taken away from them with the click of a button. It plans to reintroduce creative thinking into games by giving players control of the games and in-game assets with the help of blockchain technology.”
On a year-to-date (YTD) basis, GALA has lost approximately 89%. However, since around Aug. 20, the token has largely stabilized. It’s possible that should other cryptos hold on, GALA could build a framework for eventual upside success.
Compound (COMP-USD) stands among a burgeoning number of decentralized finance (DeFi) cryptos. DeFi is a broad term that describes the “ecosystem of financial applications being built with blockchain technology.” With Compound, the focus centers on earning interest for virtual currency deposits.
Coinmarketcap describes Compound as the following:
“When a user deposits tokens to a Compound pool, they receive cTokens in return. These cTokens represent the individual’s stake in the pool and can be used to redeem the underlying cryptocurrency initially deposited into the pool at any time. For example, by depositing ETH into a pool, you will receive cETH in return. Over time, the exchange rate of these cTokens to the underlying asset increases, which means you can redeem them for more of the underlying asset than you initially put in — this is how the interest is distributed.”
Compound should draw more attention to cryptos and particularly altcoins. To be fair, COMP has tanked about 77% on a YTD basis. However, until today, COMP had gained about 5% over the trailing week.
While the popular blockchain network Ethereum (ETH-USD) garnered intense interest for its pivot to a proof-of-stake consensus mechanism, it’s not the only such game in town. Qtum (QTUM-USD) – pronounced “quantum” – represents a PoS smart contract open-source blockchain platform and value transfer protocol.
According to Coinmarketcap, Qtum’s developers aimed to bring together the strengths of Bitcoin and Ethereum under one chain. Per the virtual currency resource, Qtum is built on Bitcoin’s UTXO transaction model, with the added functionality of smart contract execution and decentralized applications (dapps).
What makes Qtum distinct is that it takes the fundamental innovations of legacy blockchains and improves upon them. For instance, while Ethereum delivered the concept of a smart contract, Qtum empowers this innovation through real-life applications.
Like other cryptos, QTUM is on course to secure an ugly 2022, with the coin shedding 64% YTD. However, over the trailing week, the coin gained a little over 4% until this afternoon. With grit and a whole lot of luck, Qtum could make its way higher.
Big technology firms like Microsoft (NASDAQ:MSFT) have contributed to the evolving nature of applications through business models like Software as a Solution. Flux (FLUX-USD) takes this idea and applies it for decentralized purposes via Blockchain as a Service. Essentially, the project empowers true Web 3.0 innovations through a pure decentralized ecosystem.
According to the project’s website, “Flux provides the critical, high availability infrastructure for the New Internet. Projects and development teams are not forced to rely on the Flux blockchain to utilize FluxOS, so they have access to necessary infrastructure while maintaining all the unique properties of their own chains. Flux makes up one important piece of a well-balanced distributed computing portfolio focused on the next generation of the Internet.”
Like other cryptos – and especially high-risk altcoins – FLUX has absorbed serious losses. Since the start of the year, the coin is down 55%. However, FLUX also stands out for its near-term momentum. Over the trailing month, it’s up about 77%.
One of the most intriguing concepts among cryptos, Braintrust (BTRST-USD) represents exactly what its brand name implies: facilitating a decentralized talent network connecting vetted knowledge workers with the world’s top companies. Essentially, it’s employment staffing services gone blockchain.
According to Coinmarketcap, the “community that relies on Braintrust to find work are the same people who own and build it, ensuring the network always serves the needs of its users, instead of a centrally-controlled corporation. And because the community of knowledge workers and contributors earns ownership and control of Braintrust through its native BTRST token for its contributions to the network and its growth, new talent and jobs have participated in the network at record speeds.”
What’s particularly compelling is that Braintrust claims that several international brands use the underlying service. They include Nestle (OTCMKTS:NSRGY), Nike (NYSE:NKE) and Goldman Sachs (NYSE:GS).
Though the implications are exciting, BTRST is risky. The token often trades in a tight range, but it’s liable to see massive spikes and subsequent crashes.
While cryptos may represent the future of finance, they undergird a dangerous world. Actor and comedian Bill Murray found that out the hard way. According to Business Insider, hackers made off with more than $180,000 worth of Ethereum that Murray raised for charity. Such incidents raise demand for security within a supposedly secure ecosystem, which is where NuCypher (NU-USD) comes in.
The project specializes in facilitating end-to-end encrypted data sharing on public blockchains. According to Coinmarketcap, “NuCypher allows users to share private data between a number of participants in public consensus networks, using proxy re-encryption (PRE) technology. This decryption technology makes NuCypher much more secure and protected than traditional blockchain projects based on public-key encryption, according to NuCypher.”
Although relevant – and arguably likely to rise in relevance – NU occupies the riskier side of altcoins. The token is down approximately 79% YTD. But amid an increase in blockchain breaches, NuCypher could get interesting.
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.
Read More: How to Avoid Popular Cryptocurrency Scams
On the date of publication, Josh Enomoto held a LONG position in BTC and ETH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.