These undervalued altcoins have the potential to soar, and most people have never heard of them

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With Bitcoin (BTC-USD) already well established, altcoins provide fantastic opportunities for speculators. They are usually unheard of by the masses, yet packed with potential. Thats why they are so sought after as people look for the next Bitcoin.

Undervalued altcoins usually have three things in common:

1) They have real-world utility. That means they can be used by global industries for many applications. This mass adoption in the marketplace means huge gains potential for investors holding the coin early.

2) Hardly anyone in the mainstream will have ever heard of them yet. Nobody in the mainstream had head of Bitcoin until it was already worth thousands of dollars.

3) They tend to be only a few dollars, often less than 1 cent. Those who bought BTC when it was less than $1 should be very happy right now! Thats why undervalued altcoins are so sought after.

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Pepes (PEPE-USD) price spike came after Coinbase (NASDAQ:COIN) listed futures for the meme token on its platform. This mainstream acceptance for a crypto historically suggests the start of a long term uptrend. Those who get in early will be holding an undervalued altcoin, if history is any guide.

But what is even more encouraging is that this pump came after a much bigger one dating back a month earlier. So this Coinbase listing is just the latest building block on a very broad platform.

To follow through on PEPEs recent growth, on May 3, 2024, whales were spotted investing in 4.04 trillion PEPE tokens.

On the chart, PEPE recently broke out of a promising bull flag pattern. It is currently pushing against resistance of an inverse head and shoulders pattern. A breakout of its latest resistance suggests the still-undervalued altcoin is due to break out again to the upside if technicals play out as expected.

If it does, PEPE stands to almost double its current price. But this would be helped greatly by PEPEs notorious hype machine, combined with an Ethereum (ETH-USD) rally as PEPE is based on ETHs blockchain.

Source: Shutterstock

In what is quite typical for the altcoin community, Hedera (HBAR-USD) went through a pump-and-dump cycle. It was due to misinterpreted news that BlackRock (NYSE:BLK) was going to tokenize its fund on HBARs hashgraph.

The fallout left HBARs price at its previous levels. But this presents an opportunity for those seeking out an undervalued altcoin. HBAR is in a long-term uptrend dating back to October 2023. It is still a massive 80% off its all-time highs.

All promising factors. But it must be stated that the profit potential of this undervalued altcoin is more a long-term play. It may take months to clear the recent BlackRock top. But it currently sits near the bottom of an upward channel, making it a good time to buy.

Even longer term, its all-time high was in 2021, so it would need even more time to reach those highs, and of course is highly dependent on market conditions remaining bullish for cryptocurrencies as a whole.

Source: shutterstock.com/FellowNeko

Near Protocol (NEAR-USD) entered a steep uptrend in January 2024 and is currently coiling up in a bull flag pattern. Given the length of this bull flag, a potential breakout could come fairly soon if technicals play out normally.

A breakout of this flag shows little resistance on the way to its 1-year high near $8.90. Expect a test of resistance around that price in the short to medium term. But long term, its all-time high sits above $20.

The rise in popularity of NEARs data availability level appears to have been powering the uptrend in recent months. But most promisingly of all, the NEAR protocol has the distinction of having great real-world adoption. This is partially due to its partnership with KaiKai, a rewards ecosystem.

This is along with many other of NEARs tentacles held in the crypto space such as integrating with MetaMask, for one thing. NEARs current price makes it an extremely undervalued altcoin. Perhaps one of the most undervalued altcoins in the world currently.

On the date of publication, Sam Farnham 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.

Since 2012, Sam has helped investors, traders and wealth seekers with his technical and fundamental analysis of the financial markets and has developed six trading systems during that time. He is always searching for more financial opportunities to share with readers.

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Crypto Sleeping Giants: 3 Altcoins Ready to Awaken and Soar - InvestorPlace

The biggest mistake you can make in the ongoing Bitcoin bull market would be to get distracted with altcoinsall cryptocurrencies other than Bitcoin.

Many erroneously think that since there are thousands of cryptocurrencies, crypto is just another asset class like bonds or stocks, and they need diversification within that asset class.

As youll soon see, that would be like adding pyrite to your portfolio to diversify your gold holdings.

Few understand the simple truth that although there are thousands of cryptocurrencies, Bitcoin is the only one with fundamental value.

Its essential to consider how Bitcoin and altcoins should be classified.

What exactly are they?

Are they money?

Are they equity?

Are they something else?

Here are three crucial reasons to stick to Bitcoin only. It will clarify the situation in a way that anyone should understand.

A blockchain is just a database distributed among different computers.

The blockchains native currency pays for its security and incentivizes its users to maintain the network.

For example, Bitcoin miners help secure the network and are compensated only in Bitcoin. Full node operatorsthose who run the full Bitcoin softwarerun a full node because it gives them total sovereignty over their Bitcoin. It costs money and takes time to do these things, which are essential in keeping Bitcoin decentralized and secure.

These people are taking these actions and incurring these costs because of Bitcoin.

The situation is similar with every other cryptocurrency.

The point is that a blockchains native currency is an essential incentive to those securing and maintaining the network.

Running a blockchain necessarily has real-world monetary costs. The blockchains native currency must be viable as money, or it wont be attractive for people to incur these costs. Nobody wants to be paid inferior money or spend better money maintaining inferior money.

Thats why all blockchains have an essential monetary function.

If there arent compelling incentives to incur the costs to run the blockchain, few people will do it, and the database wont be decentralized, defeating the whole purpose. If the database isnt genuinely decentralized, you might as well be using a more efficient centralized one.

Thats why the blockchains native currency must be a good money. Its what incentivizes people to incur the costs to make the network decentralized and secure.

The problem for altcoins is that they are inferior forms of money.

Simply put, Bitcoin is different because nobody controls it.

Nobody can change Bitcoinnot even Elon Musk, Jeff Bezos, the Chinese government, the US government, or any of these powerful entities combined.

Even if Satoshi NakamotoBitcoins anonymous Cypherpunk creatorreturned after disappearing in 2011, he could not alter Bitcoin.

The fact that no individual, corporation, or governmentor collection of themcan change the Bitcoin protocol makes it neutral and apolitical. Its what gives Bitcoins monetary propertiesnamely, its total resistance to debasementcredibility.

For every other crypto from Ethereum on down, it is trivial for a group of insiders or developers to change the protocol, including the supply. For example, the Ethereum developers change the monetary policy about as often as the Federal Reserve.

Although it is highly improbable, the Bitcoin protocol can theoretically be changed.

Its similar to saying that asteroid mining or nanotechnology could make gold as common as the aluminum foil in your kitchen drawer. Theoretically, that could happen, but it is so improbable right now that it is irrelevant to our investment decisions.

Understanding how difficult it would be to change the Bitcoin protocol is crucial to understanding the credibility of its monetary properties.

Satoshi Nakamoto once correctly said:

The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime.

To understand how to make changes to Bitcoinand what makes it different from every other cryptocurrencyits essential to grasp the basics.

There are generally two ways a cryptocurrency implements changes and updatesa hard fork and a soft fork.

A hard fork is a significant change to the protocol and is not backward compatible, which means previous software versions will not function after the hard fork.

For example, suppose the developers of ABC cryptocurrency implemented a hard fork to update its protocol on April 15. After that date, anyone who didnt update their software to contain the new compulsory changes cannot access their money.

In short, a hard fork means someone is in control and altering core aspects of the protocol.

On the other hand, a soft fork is a backward-compatible upgrade, which means the previous versions of the software are compatible and will still work after the soft fork. Thats because soft forks dont contain fundamental changes that would render older versions unusable. Users who choose not to go along with the soft fork will still have access to their funds and can interact with the network.

Think of the difference between a hard fork and a soft fork as the difference between a mandatory and voluntary change.

Its not a trivial difference. Its paramount, yet few understand the significance of the difference and how it relates to the credibility of a cryptocurrencys monetary properties.

It brings up another fundamental question.

If someone is pushing hard forks (drastic, mandatory changes to the protocol), how can the crypto be considered apolitical or decentralized? How can its supply have any credibility when someone can change it?

The simple answer is that it cant.

Heres a helpful way to think of it

Imagine there was a group of people who could hard fork gold. Lets call them the Gold Cartel.

Suppose the Gold Cartel decided to hard fork gold to change its essential characteristics (what they would euphemistically call a protocol upgrade) but not the gold supply.

Then, suppose the Gold Cartel mandated a gold hard fork that would change gold from a solid to a liquid and from yellow to brown. But they decided that they would leave the gold supply unchanged this time.

They claimed they were making these changes to gold to upgrade its fungibility and that everyone must go along with them and their new and improved version of gold.

Then, suppose the Gold Cartel told everyone the gold hard fork would occur in two weeks and that everyone in the world must come to one of the Gold Cartels offices to exchange the old yellow, solid gold for the new brown, liquid gold.

After the Gold Cartels hard fork, the old yellow, solid gold would no longer be valid. It would no longer be gold and thus useless to anyone who didnt exchange it for their newly mandated liquid brown gold.

Would gold be a neutral, apolitical, decentralized asset in such a situation?

Would its supply have any credibility?

Thats why hard forks are a big problem for the credibility of a cryptocurrencys supply.

Aside from Bitcoin, when a cryptocurrencys development team announces a hard fork, everyone usually goes along and implements their suggested changes. Its not that different when Apple or Microsoft announces a software update. Users are forced to follow it regardless of whether they want to.

But sometimes, hard forks can be contentious. For example, certain people may disagree and refuse to implement the proposed changes. When that happens, the cryptocurrency splits into two totally different ones.

As a practical matter, anyone can hard fork any cryptocurrency whenever they want. All you have to do is take the open-source codeavailable to anyoneand make your desired changes to the protocol. But that doesnt mean anyone will follow your lead or value your new cryptocurrency.

For example, I can easily make a hard fork of Bitcoin that changes the supply from 21 million to 22 million and call it Bitcoin 2.0. But that doesnt mean I can inherit the monetary properties of the original Bitcoin, which are related to the credibility of its supply, which Ive just undermined by changing the protocol. Thats why the market is unlikely to assign any value to Bitcoin 2.0.

In short, anyone can create a cryptocurrency in minutes. Thats the easy part. Making one that nobody controls is the hard part.

If someone wanted to propose a hard fork to change to the Bitcoin protocol, it would require the agreement of most of the over 19,100 full nodes that enforce the protocol. Otherwise, the only thing they would succeed in doing is creating an increasingly worthless knockoff.

Full nodes enforce the Bitcoin protocol and consensus ruleslike its issuance and supply. The average computer can easily handle running a full node now and in the future, which is crucial for Bitcoin to remain decentralized.

Any desktop, laptop, Raspberry Piand even some cell phoneshave the potential to become Bitcoin full nodes. Furthermore, as technology advances, running a full node will become even more accessible.

The fact that anyone can run a full node makes the enforcement of Bitcoins protocol decentralized. So its unlikely that any individual, corporation, or governmentor groups of themcould get together to enforce their will on the network by coercing the full nodes.

The Blocksize Wars, which culminated in 2017, was an excellent example. Thats when an overwhelming majority of the Bitcoin minersand other prominent insiders and large companiestried to get together and change Bitcoins protocol by ramming through a hard fork.

Even though they represented most of the miners, some of the most powerful insiders, prominent influencers, and large corporations, the decentralized network of full nodes rejected their attempted hostile takeover and did not follow their hard fork.

Instead of forcing a destructive change on Bitcoinas they desiredthey just created an increasingly worthless knockoff known as Bitcoin Cash. Recently, the market cap of Bitcoin Cash (BCH) was less than 1% of the real Bitcoins (BTC) and is trending towards 0%.

The effort to change Bitcoins protocol during the Blocksize Wars was a spectacular failure.

Afterward, it became clear that nobody controls Bitcoin, not even the vast majority of its most powerful insiders. It became apparent Bitcoin was genuinely neutral and apolitical.

For more on this incredible story and pivotal moment in Bitcoins history, I suggest you check out the book The Blocksize War: The battle over who controls Bitcoins protocol rules.

Heres another way to think of it.

Imagine someone wanting to change the rules of chess so pawns could move backward. Of course, anyone could do so anytime, but that doesnt mean people will follow the new rule. Of course, nothing is impossible, but it would be so improbable that such a move would gain traction that its irrelevant.

In my view, getting the consensus of the full nodes to change the Bitcoin protocol with a hard forkto say, alter the fixed supply of 21 millionis even less probable than successfully changing the rules of chess.

Its important to emphasize that Bitcoin is resistant to change not just from technical and economic standpoints but also from social and cultural ones.

Most people running Bitcoin full nodes have a deep conviction in Bitcoins potential as a hard money resistant to debasement. So they wouldnt want to undermine that essential attribute by agreeing to change the protocol, which would undermine the credibility of its monetary propertiesthe entire value proposition of Bitcoin.

On a cultural level, the only scenario in which I can see the Bitcoin community agreeing to a hard fork would be in a genuinely existential situation.

To summarize, Bitcoin developers do not have the power to push updates and hard forks that change the protocol to the full nodes. There are no automatic or forced software upgrades. Bitcoin updates can only be accepted voluntarily by the full nodes and must be backward compatible.

Its a crucial part of an ingenious system of checks and balances that keeps a global systemthat settles many trillions of dollars in value running flawlessly without anyone in charge of it.

Heres the bottom line.

The sovereignty in Bitcoin is not with the developers, the miners, insiders, influencers, large holders, or any individual or group. Its with the globally decentralized network of full nodes, which anyone can operate.

For every other cryptocurrency, the opposite is true.

With altcoins, the sovereignty is with the developers and insiders. It is trivial for them to perform a hard fork and change the protocol.

Thats why almost every crypto aside from Bitcoin performs hard forks as part of their routine upgrade process. The developers tell everyone they need to upgrade, and there is no choice as everyone goes along with itmuch like when Apple or Microsoft mandate software upgrades.

In short, altcoins perform hard forks all the time. That means someone is in charge and can push through significant changes to the protocollike the supply. They may choose not to for now, but they can.

Heres why it relates to the credibility of a cryptocurrencys monetary properties

For example, what will the Bitcoin supply be on January 1, 2030?

With the highest confidence, I can say that it will be 20,484,246.

By contrast, what will the supply of Ethereumor any altcoinbe on January 1, 2030?

It could be 120 million, 500 million, 200 billion, 2 trillion, or more. Its anyones guess as to what future changes the developers and insiders will make to the protocol with hard forks.

In short, thats why altcoins have artificial scarcity.

Artificial scarcity is not a desirable monetary property and disqualifies altcoins as good money.

Thats why Bitcoin is different.

The ability to enforceand potentially changethe protocol (including the supply) is truly decentralized and not under the control of anyone.

Thats what gives Bitcoin genuine scarcity and credible monetary properties, which in turn make Bitcoin suitable as good money.

Once people realize altcoins are not good money, they often fall back on the claim that they are like equity or investing in tech start-ups.

When you invest in the equity of a start-up, you have an ownership stake. Its a legal claim to the assets of the business and its future cash flows.

However, altcoins do not represent any ownership stake or legal claim on any asset or cash flow whatsoever. Thats why they are nothing like equity, despite what many believe.

Mistaking an altcoin for equity would be like mistaking arcade tokens or airline frequent flyer miles for an ownership stake in the underlying airline or arcade business.

But suppose altcoins did represent an ownership stake. They would then undoubtedly meet the definition of a security under the Howey Test, which means their founders and developers must register and file disclosures with the Securities and Exchange Commission (SEC).

I think the SEC should have been abolished yesterday, but flaunting them is stupid.

Practically no altcoins have registered as a securities, yet most of them probably are indeed securitieseven though they offer no legal claim to ownership.

Given their statements, its clear that the SEC views almost all altcoins as unregistered securities, making them vulnerable to enforcement actions.

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The Case Against Altcoins: 3 Reasons To Stick to Bitcoin Only - International Man

Last updated: April 29, 2024 17:26 EDT | 1 min read

With Bitcoin exhibiting signs of consolidation, anticipation is building around a potential new altcoin season.

The recent price movement has sparked discussions and speculation among traders about the possibility of an upcoming altcoin season.

Ahead of the April 28 weekly close, Bitcoin bounced past $64,000, and data indicates a strengthening of Bitcoins price over the weekend.

At the time of writing, Bitcoin hovers around $62,600, while the total altcoin market capitalization has seen a modest 1% increase, hinting at a potential positive trend for these alternative cryptocurrencies.

Trader and commentator Moustache predicted a full-fledged altcoin season, rivaling anything since the all-time highs in 2017.

Responding to the altcoin activity, popular trader Skew noted on X (formerly Twitter) that Alts bounced nicely, but breaking the pattern of setting weekly highs on Mondays and Tuesdays remains crucial.

Skew suggested that there is a possibility of sell-side pressure hindering Bitcoins progress towards its near-range highs.

The trader suggested that Tether is attempting to reclaim its position after breaking below a rising trendline earlier this year. This dip was merely a backtest.

According to his statement, there is an inverse relationship between the USDT (Tether) value and the value of altcoins.

Ethereums price has experienced a substantial drop over the past six months due to gas fees skyrocketing.

ETH has dropped 10.46% this month alone from its April 9 high of $3,722.

In the past week, Ether has seen a slight increase of 4.3% in the market, but still not enough to bounce back.

Analysts from crypto analytics platform Santiment suggested that the drop in Ethereum gas fees could potentially signal an upcoming altcoin season.

According to Santiments X post, Ethereums average transaction fee has fallen as low as $1.12.

Santiment predicts a quicker turnaround for Ethereum and associated altcoins than expected due to the recent retracement and reduced demand on the network.

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Is the Next Altcoin Season Around The Corner? Some Traders Believe So - Cryptonews

Bitcoin {{BTC}} appears on track to end a seven-month winning streak. Still, the largest token by market value is likely to become more dominant in the crypto market, according to one analyst.

As of the time of writing, bitcoin changed hands at $63,200, representing an 11% monthly loss, the first since August 2023, according to data source CoinDesk and TradingView. The CoinDesk 20 Index, a measure of the most liquid digital assets, traded nearly 20% lower for the month at 2,185 points.

A bevy of factors like the dwindling probability of the Fed rate cuts, reduced demand for the U.S.-based spot bitcoin exchange-traded funds (ETFs) and broad-based risk aversion in financial markets have taken the wind out of the bitcoin bull run this month. Meanwhile, a continued expansion of prominent stablecoins has been a supportive factor.

Analysts are now closely watching Wednesdays quarterly refunding statement by the U.S. Treasury. According to Singapore-based QCP Capital, a higher issuance of short-term bills could free up liquidity, supporting risk assets.

The upcoming Quarterly Refunding Announcement (QRA) on May 1 could also see higher issuances of short-term U.S. bills. This will drain the RRP, which currently has USD 400 billion, and also increase liquidity, QCP said in a market note.

The U.S. Treasury said on Monday it plans to borrow more in the April to June quarter. Higher-than-expected borrowing means more bond supply, higher yields or risk-free rates and less reason to invest in risky assets.

The Treasury also said it expects to maintain a balance of $850 billion in its Treasury General Account by the end of September, slightly higher than the $750 billion expected.

BTC to become more dominant

Bitcoins dominance rate, or the share in the crypto market, recently rose to a three-year high of 57%, breaking higher from a six-month consolidation pattern.

The breakout means bitcoin could continue to outshine alternative cryptocurrencies (altcoins) in the coming months.

It [the dominance rate] recently had a breakout favoring bitcoin over altcoins in the intermediate-term, which is in line with the weekly RRG [relative rotation graph] where most altcoins point lower, Fairlead Strategies said in a note to clients Monday.

The breakout in the index marks a continuation of a long-term turnaround phase, which has reversed much of the altcoin gains made in early 2021, Fairlead Strategies added.

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Bitcoin Set to Become More Dominant Even as BTC Stares at First Monthly Loss Since August - TradingView