Although the crypto market recently saw a pullback and reset in prices, the ongoing crypto “altcoin season” is still intact. Altcoins everywhere are now outperforming Bitcoin by a large margin, and everyone wants their favorite coin to ultimately beat BTC at becoming the biggest and best.
Some coins have real potential, while others are grossly overestimating their potential. Bull markets create exuberance and blindness because money is easily made. Removing all bias and hype, here are the top three most overestimated altcoins, along with the top three most underestimated altcoins out there today.
Crypto Market Hype- The Top Three Most Overestimated Altcoins
The cryptocurrency asset class goes through boom and bust cycles, just like any market. However, these effects are amplified due to the fact that cryptocurrencies are still speculative assets.
Thus far, only Bitcoin and maybe Ethereum and stablecoins have begun the journey towards greater financial acceptance. Other altcoins have been making great strides in building value and an ecosystem around the project, but have been hidden by the hype and loud cries from fans surrounding the currently more popular crypto assets.
The keyword is currently, as even Bitcoin has shown the tide and sentiment can turn extreme abruptly. The more hyped and overvalued the altcoins, the worse the correction often is. Here are the top three most overvalued coins currently.
Dogecoin (DOGE)
Sorry, meme coin fans. Dogecoin at a dollar could forever be a carrot dangled that investors never quite get to. The trend has been incredibly strong in Dogecoin’s favor, but what happens when the altcoin gets put in the dog house by Elon Musk, much like he’s done with Bitcoin recently?
Even worse, the most significant portion of the supply is held by only a dozen or so wallets – whales that are waiting in the waters ready to dump on TikTok traders and Robinhood IOU investors. Sure Musk wants to support Dogecoin, and his company SpaceX gave it a nod, but after moving at the speed of light for months, it could be a long time before DOGE goes to the moon. A supply of 129 billion DOGE certainly doesn’t help the equation at all.
Ethereum Classic (ETC)
This wasn’t a situation like Coca-Cola Classic when New Coke was introduced, and everyone clamored for a return of the better version. No, Ethereum Classic is the forked remnants of the Ethereum blockchain no one really wanted anymore, yet still somehow holds onto a high ranking in the crypto market top 100 by market cap.
Ethereum Classic is also notoriously susceptible to 51% attacks, where coins are double-spent and the chain’s reputation continually damaged. Yet again, money keeps flowing into this altcoin. Interestingly, unlike Dogecoin, ETC rarely receives any hype and instead appears to perform well thanks to newcomers being confused with the cheaper version of “Ethereum.”
NEO (NEO)
NEO, once billed as the Ethereum of China, hasn’t amounted to very much at all. During the last bull run, the cryptocurrency soared, and so did its separate GAS token.
NEO is still stuck well below its former all-time high in this cycle, and unlike others across the market that still haven’t made a new record, NEO has little reason to do so but hangs on to a respectable spot in the crypto market top 100 by market cap.
The GAS token has also run out of steam and is now nowhere near the top 100 it was once part of. What does this project have going for it that keeps it so high on the list?
Underdogs With Real Value- The Top Three Underestimated Altcoins
Hype comes and goes in waves, and although right now all the hype is focused on Dogecoin and emerging alternative chains to Ethereum currently, that could change at any moment, just like the sentiment around Bitcoin has shown.
But sentiment changes also work in reverse. When the crowd eventually catches on that real value projects are finally on the move, the FOMO can be fierce. Here are three of the most underestimated coins you might want to pay attention to before it is too late.
Litecoin (LTC)
Although the fact that NEO hadn’t made a new high from the last cycle was a major con for it, it is a pro in disguise for Litecoin. Litecoin, by comparison, has a lot more going for it. Its code is very similar to Bitcoin, yet far less energy-intensive.
Litecoin essentially has all the best attributes of Bitcoin, along with the one feature that Elon Musk loves so much about Dogecoin- the scrypt mining algorithm. The altcoin once called digital silver could soon shine as greener cryptocurrencies come into focus.
With a scarcity that is similar to Bitcoin, Litecoin is one of the most underestimated altcoins in the market.
Covesting (COV)
The COV utility token is an ERC-20 token designed for use within the Covesting ecosystem of products and services, and its value proposition is derived from that usage, along with developer-supported tokenomics that encourage supply deflation.
A portion of the fees generated from Covesting products like the Covesting copy trading module are burned systematically. More than half a million COV tokens have already been burned, and with a supply that is less than Bitcoin’s and will only decrease further, the potential could be dramatic.
Staking the COV token also unlocks a variety of benefits within the Covesting copy trading module for token holders, such as increasing follower limits, reducing trading fees, boosting the profit share, and much more. And when Covesting Yield Accounts launch later in Q3 2021, COV token staking will enhance APYs by as much as 2x, bringing rates to as high as 35%. Staking also takes coins out of the supply. Although temporary, and can be unlocked at any given time, it could also impact the balance of supply versus demand.
Monero (XMR)
This privacy altcoin is a surprise for our list, but there’s no denying the value of privacy in the internet era. Ransomware is becoming increasingly common and the most popular way for cybercriminals to make money. Bitcoin is also at the same time becoming easier for government agencies to trace. This has already led to Monero taking over Bitcoin as the crypto payment option of choice across the dark web.
Never discount the value of the black market and underworld. Bitcoin got its start on the dark web, and most of today’s most used technologies, such as the internet and DVDs, became popular to start thanks to the adult film industry. An emerging sector such as OnlyFans could benefit significantly from more robust privacy around payments especially.
And with governments cracking down on crypto and demanding extensive reporting on transactions over a particular value, privacy coins – a segment Monero is the undisputed king of currently – could thrive.
Summary
Simply put, altcoins are speculative assets, even more so than Bitcoin and Ethereum, which have more liquidity overall and more institutional and regulatory support. These coins go through hype cycles that can make and break them. During the positive phases, these coins explode and outperform Bitcoin by miles. But on the negative side, they tend to retrace as much as 90% of their initial climb and wipe out latecomers.
That’s why it is imperative to know which coins have way more hype than value and know when to get out or stay away. Those that haven’t yet a big run and have plenty of reason to are just waiting to get going. Catching those coins before they make their move is the key to consistent success – and survival – in altcoins.
