The crypto market is promising despite the recent price stagnation. Almost all cryptocurrencies have recorded an increase since the beginning of the year and are showing an upward trend. This trend could be more pronounced in undervalued cryptocurrencies as investors look to capture the maximum upside potential as this rally continues.
Of course, this only applies if the rally continues. The stock and crypto markets could face many potential headwinds, from longer-term higher interest rates to an outright recession leading to capital outflows from assets.
But if this rally continues, looking for value always makes sense. With fundamentals like user growth and transaction volume in mind, here are three undervalued cryptos to consider now.
Solana (SOL-USD)
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Known as a top contender ether (ETH-USD), Solana (SOL USD) offers almost the same benefit in many ways. However, this network has a key speed and cost advantage that many developers have found by switching to Solana, especially for projects that involve lower priced transactions.
This has allowed Solana to expand its market share in key crypto sectors such as the NFT space, while Solana continues to maintain a solid market share in decentralized finance applications.
As this project proves its utility, there is certainly potential for Solana’s market cap to converge with Ethereum. Who knows, maybe this project will become bigger later. It really comes down to the fundamentals mentioned above and network effects over time.
One of the key catalysts that could push Solana higher in the near term is the news that Pantera Capital has won another round discounted Solana tokens by insolvency administrators of the former FTX exchange. Approximately 2,000 SOL tokens were auctioned this week. Representatives for Pantera and FTX did not respond to requests for comment. However, with these headwinds in the rearview mirror, investors can now focus on the positive catalysts for this token. All in all, this is a good thing for Solana investors.
Avalanche (AVAX-USD)
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avalanche (AVAX-USD) is another Layer 1 network that I have been bullish on for some time, and this project has seen remarkable growth from last year’s lows, more than tripling in just a few months.
Interestingly, this token price increase came in light of the upcoming token unlock of around 9.5 million AVAX tokens. These token unlocks bring liquidity to the market, but can also lead to selling pressure as early investors cash out. Ultimately, we will have to wait and see how Avalanche’s supply and demand dynamics play out, but this poses a risk to the token’s impressive rise so far this year.
Like Solana, Avalanche has done a good job in its attempt to challenge Ethereum’s dominance. As a major Layer 1 network with a decentralized finance focus, many of Solana’s aforementioned catalysts apply to Avalanche. This network is highly efficient due to its core infrastructure, allowing for fast transactions and Ethereum compatibility. Thus, investors can enjoy the best of both worlds as Ethereum-pegged projects settle their transactions on the more efficient Avalanche blockchain.
Stripe recently announced one Integration with Avalanche to solve Web3’s “cold start problem” where users are missing transaction funds. Stripe takes care of Know Your Customer (KYC) regulations, payments and fraud prevention, allowing developers to focus on apps. Core users can create Avalanche accounts using Google or Apple IDs and fund them with bank transfers or cards, encouraging cryptocurrency adoption.
Filecoin (FIL-USD)
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As a decentralized data storage network Filecoin (FIL-USD) is another token that crypto investors should consider. It offers secure data storage solutions without being more dependent on central authorities. With FIL tokens, users can rent or buy storage space.
Filecoin was launched in 2017 and has seen many price changes. This token peaked at $200 in 2021 and fell to its low at $5 in 2023. So there is a lot of upside potential if investors believe this bull rally is sustainable. One of its most recent improvements and projects is Glif Points, which increased the cryptocurrency’s price and investor interest.
After integrating with Solana, an emerging Layer 1 network, Filecoin rose 17% in three days. This integration was announced on February 16th, with Filecoin agreeing to host Solana’s block history, furthering Solana’s decentralization and move away from centralized storage. This makes Filecoin a good investment, especially for those who are currently bullish on the intersection of cloud computing and crypto.
At the time of publication, Chris MacDonald did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.