The crypto market shows promise despite recent price stagnation. Almost all cryptos have surged since the beginning of the year, showing a bullish trend. This trend may be more pronounced for undervalued cryptos as investors look to capture the maximum upside as this rally continues.
Of course, that’s if the rally continues. Plenty of potential headwinds could hit equity and crypto markets, from higher-for-longer interest rates to an outright recession leading to capital outflows from assets.
But if this rally continues, looking for value always makes sense. Regarding fundamentals such as user growth and transaction volumes, here are three undervalued cryptos to consider now.
Solana (SOL-USD)
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Known as a top contender to Ethereum (ETH-USD), Solana (SOL-USD) offers almost the same utility in many respects. However, this network does have a crucial speed and cost advantage, which many developers have noted, moving toward Solana, particularly for projects that involve lower-priced transactions.
This has allowed Solana to grow its market share in key crypto sectors such as the NFT space, with Solana continuing to hold a solid market share among decentralized finance applications.
As this project demonstrates its utility, there’s certainly the potential for Solana’s market capitalization to move closer toward Ethereum. Who knows, maybe down the road, this project will be bigger. It really comes down to the aforementioned fundamentals and network effects over time.
One of the key catalysts that could take Solana higher in the near-term is news that Pantera Capital won another batch of discounted Solana tokens from bankruptcy administrators of the former FTX exchange. Approximately 2,000 SOL tokens were auctioned this week. Pantera and FTX representatives didn’t respond to requests for comments. However, with this headwind in the rear view mirror, investors can now focus on the positive catalysts for this token. All in all, that’s a good thing for Solana investors.
Avalanche (AVAX-USD)
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Avalanche (AVAX-USD) is another layer 1 network I’ve been bullish on for some time, and this project has seen some remarkable growth off last year’s lows, more than tripling in a matter of months.
Interestingly, this token price appreciation has come in the face of an upcoming token unlock of around 9.5 million AVAX tokens. These token unlocks bring liquidity into the market but can also invite selling pressure as early investors cash out. Ultimately, we’ll have to see how Avalanche’s supply and demand dynamics pan out, but this is a risk to the token’s impressive rise thus far this year.
Like Solana, Avalanche has done well in its bid to challenge Ethereum’s dominance. As a key layer-1 network with a decentralized finance focus, many of Solana’s previously mentioned catalysts hold for Avalanche. This network is highly efficient due to its core infrastructure, which allows for fast transactions and Ethereum compatibility. Thus, investors can have the best of both worlds, with projects tied to Ethereum processing their transactions on the more efficient Avalanche blockchain.
Stripe recently announced an integration with Avalanche to solve Web3’s “cold start problem” where users lack transaction funds. Stripe will handle the Know Your Customer (KYC) regulations, payments and fraud prevention, allowing developers to focus on apps. Core users can create Avalanche accounts via Google or Apple IDs and fund them with bank transfers or cards, enhancing crypto adoption.
Filecoin (FIL-USD)
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As a decentralized data storage network, Filecoin (FIL-USD) is another token crypto investors should consider. It offers secure data storage solutions without depending more on central entities. Users can rent out or purchase storage space using FIL tokens.
Launched in 2017, Filecoin has seen many price changes. This token peaked at $200 in 2021 and dropped to its lowest at $5 in 2023. Thus, there’s plenty of upside if investors consider this bull market rally sustainable. One of its recent improvements and projects is Glif Points, which boosted the crypto’s price and investor interest.
Filecoin surged 17% in three days following its integration with Solana, a burgeoning Layer 1 network. This integration was announced on Feb. 16, with Filecoin agreeing to host Solana’s block history, boosting Solana’s decentralization and moving away from centralized storage. This makes Filecoin a good investment, particularly for those who are bullish about the intersection of cloud computing and crypto right now.
On the date of publication, Chris MacDonald 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.
