2018 is off to a shaky start.
With Bitcoin floundering from its all-time high, many investors are turning to alternative coins (altcoins for short) that seem to offer much more promising applications, yet for a much lower price.
The challenge is predicting what coins could truly blossom, and hold their value in the event of a major Bitcoin crash. To do so, the coin needs a promising everyday use that can justify a high valuation.
While it’s impossible to predict the future, here’s my reasoning for the top 5 best altcoin investments for 2018. For each coin, I’ve provided its current value, market cap and rank amongst cryptocurrencies.
- Quantstamp (QSP)
- Request Network (REQ)
- KuCoin Shares (KCS)
- Sumocoin (SUMO)
- Ripple (XRP)
- Should I Really Invest?
As a general rule of thumb, the lower the rank, the higher the growth potential and risk.
[Important: This guide should not be considered as personal financial advice. Remember to only invest what you can afford to lose. Do your own research and stay updated on news about each coin from its online community].
Alright then, let’s begin the count. At #1 ,we have Quantstam.
1. Quantstamp (QSP)
Current Price: $0.40 USD (as of 1/22/18)
Market Cap: $250m
If Bitcoin is what brought cryptocurrencies to the mainstream, smart contracts are what will bring them into everyday use. Networks like Ethereum and EOS will allow us to pay bills, submit insurance claims, or buy a home in a way that’s much faster, and more secure than traditional banking.
While the future may see only a handful of “successful” cryptocurrencies, we will undoubtedly see hundreds of thousands of smart contracts as these real-life uses come to fruition.
The fact is:
They rigorously test new systems to find bugs or security vulnerabilities- which, have been all too common in cryptocurrency history. As larger businesses begin exploring what blockchain and smart contracts can do for them, they will undoubtedly want the security and reassurance provided by a company such as Quanstamp.
On the technical side, Quanstamp’s QSP tokens have risen steadily in value and retained their value well in the midst of January’s crash. With a relatively small market cap (ranking only 97th among cryptocurrencies) there is a lot of room to grow. Finally, QSP will be offering free airdrops of coins they audit to some long-term QSP holders, which is a great additional perk for investors who want to get active in the community.
2. Request Network (REQ)
Current Price: $0.45 USD (as of 1/22/18)
Market Cap: $300m
Speaking of real world cryptocurrency uses, Request Network (REQ) is easily one of the most exciting projects to emerge that is also easily understood by the casual investor. Dubbed PayPal 2.0, Request Network aims to change the way consumers pay for products or services online.
Current payment systems require you to send private information (name, address credit card number, etc.) which always poses the risk of being intercepted or “stolen” from the database it is stored. Not to mention, your data can be legally sold to marketing companies, which many see as a violation of privacy.
Furthermore, online transactions are costly (typically ~3% the purchase price) and time-consuming. While small purchases can go through instantly, bank transfers take a number of days to confirm.
REQ aims to change all of this by creating a simple tool to send or request payments over the Ethereum network. The system is infinitely more secure, since you aren’t sending any private information, and blockchain is nearly impossible to hack.
Transactions are instant, far less expensive (estimated between 0.05 – 0.5%) and a lot more flexible, given you can pay with Bitcoin, ETH, REQ, or any fiat currency.
It’s easy to see how a system like REQ will soon replace merchant processors. Whether or not REQ are the ones who do it will depend on how they develop their project and meet their goals throughout 2018.
3. KuCoin Shares (KCS)
Current Price: $8.00 USD (as of 1/22/18)
Market Cap: $700m
KuCoin.com is an emerging cryptocurrency exchange that lists a lot of unique and underground coins. At the time they launched in late 2017, KuCoin offered KuCoin Shares (KCS) as a way for users to invest in their company and the cryptocurrency market at large.
Everyday, KuCoin tallies up their earnings from trading fees and distributes 50% to KCS holders. This dividend is paid in the form of each and every token traded that day. So in other words, you get to slowly accumulate 70+ different coins (plus whatever else they add) just for holding KCS.
Admittedly, the payout is not particularly substantial right now. This writer holders 6.5 shares, and gets about $0.01 USD worth of various coins each day. The hope is that trading volume on KuCoin will grow, increasing the size of dividends and that the coins themselves will appreciate.
Not to mention, KCS tokens themselves will increase in value as the exchange grows in popularity.
That said, I do think one would need to hold at least 50 shares to really make the dividend pay off.
Currently, prices are quite low compared to KuCoin’s initial peak of around $20 USD per share. Despite the recent drop and some technical issues on the KuCoin exchange, there is a lot of enthusiasm within KuCoin’s community, which is a positive sign for where this asset is heading.
4. Sumokoin (SUMO)
Current Price: $6.00 USD (as of 1/22/18)
Market Cap: $16m
A good cryptocurrency portfolio should include a blend of high and low market cap coins. In other words, invest in the tried and true giants like Ethereum and Monero, but also save some money for lesser-known gems that could see much more substantial gains- albeit, at a higher risk.
Sumo is one of these potential gems. As a fork of Monero (XMR), Sumokoin is a “privacy” coin. Unlike bitcoin, its transactions are completely private and ledgers are hidden (nobody can see how many coins anybody else’s wallet holds).
While this gives it some negative PR, due to its association with drug dealers and tax evaders, privacy coins do have a lot of important “white hat” uses: They prevent credit card companies and advertisers from tracking your purchases, they prevent scammers from targeting you based on your public wallet info, they prevent citizens in a repressive country from seizure of assets.
You get the idea.
There’s already a number of privacy coins out there, with Dash and Monero taking the top spots at #12 and #13 on the overall charts, respectively. What makes Sumokoin unique is that, as newer technology, it has managed to kick privacy up a notch with tighter encryption.
It may not pass the $300 price tag of Monero in the near future, but it’s still likely to see some growth. Sumokoin has proven to be a solid team, already rolling out their user wallet and a GUI miner ahead of schedule.
They have the potential to innovate much faster than Monero, which could have significant impacts further down the line.
5. Ripple (XRP)
Current Price: $1.20 USD (as of 1/22/18)
Market Cap: $46b
In the first few days of 2018, I wouldn’t have touched XRP with a 10-footrot pole. The coin had skyrocketed from $0.25 to nearly $4 USD in less than 1 month. It briefly replaced Ethereum as the 2nd largest cryptocurrency before slumping back to a more modest position.
Ripple caught a wave of hype, fueled by mass media coverage, newbie investors looking for the next Bitcoin, and rumors it would be listed on Coinbase. In the end, negative coverage about how little Ripple had truly penetrated the banking industry set it on a downward plunge.
At the time of this writing, Ripple is still finding its bottom. I wouldn’t invest just yet, but I would keep a close eye on it. Ripple has a lot of solid technology behind it: It has one of the fastest transfer speeds, lowest transaction fees, and its centralized-nature, while controversial to some, are also what makes it a favorite of banks and financial institutions.
It has continued announcing major partnerships and will undoubtedly continue developing and promoting its financial software.
In other words, buy an asset like Ripple when the price steadies, hype decreases, and the team is busy ‘backstage’ developing their product. Then, when a future breakout occurs, be wary of any unsustainable growth, and don’t be afraid to sell high.
Should I Really Invest in These Altcoins?
A diversified portfolio should be diverse in every sense of the word. Choose a few tried and tested giants like Ethereum and XRP, a few promising up-and-comers like QSP, REQ and KCS and finally, be willing to gamble some longshot projects like SUMO.
Last but not least, a diversified portfolio also means investing in things besides crypto: stocks, mutual funds, precious metals, real estate, etc.
Cryptocurrencies are a high-risk investment that should make up the smallest portion of your overall portfolio.
In other words, whatever you put in, assume that you “lost” it already. Consider any gains a pleasant surprise, and any losses an acceptable outcome.
Feature image by Aleksandar Savic