Like basically all cryptos, the best cheap cryptos to buy now have had a rough time in the last three to six months.
The value of a crypt0 can be very hard to measure. The simplest way to see this is to look at how well the crypto is performing. That is a function of supply and demand for the cryptocurrency. For example, if the demand for the crypto thanks to its uses skyrockets, then the price of the currency will rise. So, in that sense, the currency may be deemed valuable.
But now, many of the top-20 cryptos are down well over 50% since the beginning of the year. That implies that those cryptos could double once the sector returns to its former prices.
In fact, if a crypto is down 60%, it implies that the crypto could potentially rise 150% once it returns to its former price. Moreover, the crypto can double even if it returns to just 80% of its former price.
As a result, this list of the best cheap cryptos in the top 30 largest focuses on those that are down nearly or over 60% from the beginning of the year.
Let’s dive in and look at these cryptos.
Performance: -58% YTD
Bitcoin (BTC-USD) is down over 58% YTD off 26% in the last 30 days, according to Coinmarketcap. The pain just doesn’t seem to want to end. But not to fear — Bitcoin has been here many times before. In fact, just over a year and a half ago at the end of 2020, it was at a similar price. Then it proceeded to rise by 200%.
Between then and now, Bitcoin has doubled twice and rose one other time by over 30%. The average gain of all three upward tranches is 110%. This can be seen in the graph at the right.
This also makes the likelihood it will double from here very high, as I wrote about recently. I suspect there is at least an 80% chance of a 110% gain and a 20% chance of a 50% gain.
That adds up to a 100% chance of a 98% expected return — in effect, a double. And it probably won’t take anywhere near a year.
Performance: -71% YTD
Ethereum (ETH-USD) has taken a bigger hit than just about any of the top-10 cryptos, even though it is the second-largest by market cap. It’s down 71% YTD as of July 11 and off 26% in the last 30 days. In fact, Coinpaprika.com says that in the last year it has tumbled over 46%.
Ethereum is known as the premier blockchain platform on which smart digital currencies and smart contracts have been launched. This has come with some problems, though, including its cost, the speed of transactions and a host of competitor cryptos that are nipping at its heels.
Moreover, Ethereum has yet to formally make a switch from using proof-of-work, or mining to validate transactions on the blockchain, to a proof-of-stake (PoS) system. That was supposed to happen in July but now it’s looking more like September… or later. As a result, interest in staking deposits with Ethereum 2.0 (PoS) has reached its lowest point ever recently.
And so, as every contrarian investor knows, this is the perfect time to start accumulating Ethereum. Yes, there are risks, but for investors who want to dollar-cost-average into the crypto, this is how you take advantage of uncertainty.
Performance: -81% YTD
Solana (SOL-USD) is down 81% YTD but up nearly 10% in the past 30 days. However, it is making huge inroads into the NFT marketplace as its transaction validation platform is faster than Ethereum. It also costs less than Ethereum to validate transactions on the blockchain.
Solana is an alternative to Ethereum, and its platform for NFT apps and related non-fungible token platforms perform better than Ethereum. Solana performs faster and cheaper validation than Ethereum.
However, Solana has had difficulties with platform shutdowns. That could one reason why there is such a huge drop in Solana.
Another problem is many investors are selling their NFTs. They see it as a craze and figure it has topped out. This is hurting Solana’s valuation. However, Solana is finding new applications, like a smartphone app.
Solana might be one of the most undervalued cryptos. It may have to find a second act, but it could also rebound quickly when markets start to ease.
Performance: -78% YTD
Polygon (MATIC-USD) is the 18th largest crypto by market cap but is down 78% YTD and up 8.95% in the last 30 days. It is a Layer 2 protocol crypto built on top of Ethereum. According to Coindesk, it “allows developers to create and deploy their own blockchains that are compatible with the Ethereum blockchain with a single click.”
Coinpaprika reports it’s down around 42% in the last year.
This makes it one of the top large undervalued cryptos on this list. If it were to gain over half of its decline, then the crypto would be up over 100%. That means it is a great time to start accumulating.
Performance: -64% YTD
Dogecoin (DOGE-USD) is the 10th-largest crypto but is off 64% YTD and 4% in the last 30 days. It’s also down 69.2% in the past year, according to Coinpaprika.
Moreover, Dogecoin is a meme crypto that’s increasingly seen as a viable blockchain payment platform. Other cryptos are more focused on being a store of value rather than having a practical use case like this.
Elon Musk supports Dogecoin as an alternative payment mechanism. For example, he recently said The Boring Company accepts Dogecoin as a form of payment. His other companies already accept Dogecoin, at least for smaller online purchases, as an alternative to credit cards.
He is obviously hoping for some sort of snowball effect, or a tipping point in terms of acceptance. If that happens, DOGE tokens will take off. Now might be a good time for contrarian investors to start buying.
Performance: -67% YTD
Tezos (XTZ-USD) is the 36th largest crypto but is down over 67% YTF and over 45.4% in the past year. However, it has made a name for itself as one of the NFT-focused cryptos. It’s well known for its sponsorship of many NFT projects.
Tezos is also seen as a greener alternative to Ethereum, as it uses a PoS validation technology, meaning no mining.
Moreover, it costs less than Ethereum NFTs to complete a transaction and uses less electricity in the process.
Once the market rebounds, this crypto might be seen as a second-act play for the NFT marketplace. That makes it one of the best cheap cryptos worth accumulating now.
On the date of publication, Mark Hake 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.