It’s tempting for crypto investors to focus solely on the major players like Bitcoin (BTC-USD) and Ethereum (ETH-USD). And yes, these cryptos should likely form the core of your holdings, given their stability and widespread adoption. However, investing solely in the big two means missing out on potentially explosive growth from newer, lesser-known cryptos that are poised to take off.

While risky, allocating a small part of your portfolio to emerging cryptos can pay tremendous dividends if you choose wisely before the masses catch on. As we’ve seen repeatedly in past bull cycles, the right altcoins can deliver returns dwarfing even Bitcoin in a short timeframe once market momentum shifts to “altseason.”

There are good reasons to believe such a shift could occur again soon. Major catalysts are converging in 2024, like Bitcoin’s upcoming halving and the possibility of even more ETFs finally getting SEC approval against the backdrop of rate cuts. When this happens, obscure coins can rapidly gain traction and skyrocket.

With that said, let’s dive into these overlooked smaller-cap cryptos!

PAAL AI (PAAL-USD)

As AI capabilities accelerate exponentially in terms of capabilities, one area primed for disruption is customer service chatbots. PAAL AI (PAAL-USD) is intriguing crypto play in this arena. PAAL AI is developing AI-powered chatbots designed to deliver personalized and helpful automated customer support.

Unlike typical chatbot platforms, PAAL AI has its own digital token called PAAL that enables additional functionality. Consumers can use PAAL tokens to access premium chatbot services. They can also earn PAAL tokens through chatbot interactions, promoting the platform, and participating in PAAL’s DAO community governance.

The project’s chatbot services handle common customer service needs like booking hotels or ordering food. Users with fiat currencies can still pay for these services, with automatic conversion to PAAL tokens taking place in the background. However, owning PAAL unlocks exclusive features and rewards.

As a sustainable blockchain project built with a proof-of-stake consensus mechanism, PAAL AI also promises an energy-efficient option with minimal environmental impact compared to proof-of-work cryptos.

With global chatbot market growth projected to reach $32.4 billion by 2032, PAAL AI’s niche at the intersection of AI customer service and crypto offers an intriguing way for investors to ride this growth. The project remains in its early stages, but seems poised for significant mainstream traction if the team behind this project can execute properly.

Golem (GLM-USD)

As graphics rendering and 3D visualization grow increasingly critical across media, design, medicine, and other sectors, offloading these intensive computing tasks to the cloud makes economic sense. Golem (GLM-USD) offers a decentralized peer-to-peer network where anyone requiring temporary remote computing resources can connect directly with providers who have spare capacity to share.

This open-source platform runs on Ethereum, allowing users to tap into extra computing power for rendering, machine learning, and other resource-intensive applications. Instead of relying on centralized cloud services like AWS, Golem lets users borrow processing capacity directly from a global network of peers. Resource providers earn GLM tokens for leasing their spare computing resources.

Established competitor Render Network (RNDR-USD) fulfills a similar role, but trades at a towering $1.34 billion market cap versus Golem’s comparatively tiny $196 million valuation. As one of the earliest and most promising decentralized computing grids running since 2016, Golem seems positioned to capture significant market share given the still-early growth stage of this decentralized capacity-sharing model.

For speculative crypto investors, GLM tokens offer an opportunity to gain exposure to this emerging decentralized compute-sharing trend before the concept potentially hits mainstream adoption. The century-old concept of “sharing economies” continues gaining momentum in the digital age across transportation, lodging, finance, and now computing. Golem provides a way to participate via decentralized infrastructure.

Crypto Asset Governance Alliance (CAGA-USD)

As innovation in the world of decentralized finance (DeFi) continues evolving at a blistering pace, an intriguing newcomer called Crypto Asset Governance Alliance (CAGA-USD) recently launched to promote transparency and community-driven governance.

CAGA introduces a dual-token model that rewards users for both staking and engagement within its ecosystem. Unlike most staking platforms focused strictly on investment returns, CAGA incentivizes participating in surveys, completing tasks, and engaging in other community activities through additional token distributions.

This project is governed by a decentralized autonomous organization (DAO) that returns authority and decision-making directly to CAGA community members through democratic processes. Users can vote on business decisions, Treasury allocations, protocol changes, and more.

Since its November 2023 launch, the price of CAGA tokens have surged more than 6,300% from an initial $0.00001411. However, the project’s $55 million market cap remains tiny by crypto industry standards. I see a lot of upside potential if a new crypto bull market rally begins this year.

Small, low-volume cryptos

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, Omor Ibne Ehsan did not hold (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.