In this article, we will discuss Top 10 Low market cap altcoins to invest in 2020.
The cryptocurrency market is relatively small when it comes to other FinTech industries and commodities. Nevertheless, there are a plethora of decentralized projects in the market which aim to provide solutions for various different applications.
Currently, there are 5256 cryptocurrencies listed on CoinMarketCap. However, only about 200 of those have a market capitalization of more than $10 million, i.e. only about 3.8% of the total number.
Moreover, only about 800 of those cryptocurrencies have a market capitalization of more than $1 million i.e. 15% of the total number. In terms of percentage, a cryptocurrency with a total Mcap of $1 million accounts for about only 0.0005% of total crypto-market capitalization.
The top 20 cryptocurrencies accounts for around 92% of the total value of the crypto markets; Bitcoin, Ethereum and XRP dominance alone adds up to 78.5%.
Therefore, there are limited amounts of large-cap projects in the market. The number of mid-cap projects are limited as well, with a large number of smaller projects. Like the success rate of most start-ups, these projects come with huge risk for investors. Nevertheless, diligent research and careful risk management with select few altcoins can reap huge benefits.
We have selected the top 10 small-cap cryptocurrencies with a high potential of success. These are listed below,
Kava Labs Inc. is a San Francisco and Cambridge based firm working on payments and blockchain technologies. The Kava Blockchain provides a DeFi solution to create a secure cross-chain customer data platform (CDF).
Four different types of cryptocurrencies including Bitcoin [BTC], Cosmos [ATOM], XRP, Binance [BNB] Coin can be used to create collateral on the network. The present total Mcap to the project is $16,085,210.
Civic Key [CVC]
It is a digital wallet developed by leading crypto analyst and entrepreneur, Vinny Lingham along with Jon. Civic provides a one stop solution for storage, verification and sharing identity details with entities for e.g. KYC and AML compliance on exchanges.
It is one of the leading digital wallets in the market because it does not store the private keys or currencies, the clients and MSB endpoints use the interface as a piping.
Recently, it partnered with BitGo, which provided the first multi-signature hot wallet in 2013, to release a new wallet and protocol to share identity details of users. This is, it only shares limited information with third party entities. The total market capitalization of the CVC is $12,836,446 USD.
NEO Gas [GAS] is a measure of the computational effort required to execute the smart contracts and transactions. It is the fuel which powers the NEO Blockchain and it can be traded freely across exchanges.
It is distributed to NEO holders with every new block generated on the network. While it has considerable utility, the trading liquidity is on the low side. Moreover, the price of NEO and the associated transaction fees accounts for the computational unit in its price. Nevertheless, during times of hyper-activity the GAS values can increase to higher percentages than the network itself.
Polymath is a Haggatt Hall, St. Michael based Blockchain solutions firm that helps in the creation of security tokens. Financial securities are stocks, bonds, and money market securities (e.g., treasury bills) that already have value in the traditional markets.
Polymath aims to provide a decentralized platform for issuing, trading and exchanging these securities on Blockchain. At press time, the total Mcap for the token is $9,408,658 USD.
Constellation Network, INC is a San Francisco, U.S.-based technology and Blockchain company. It provides Blockchain based solutions for database management of large entities.
One of the most important partnerships of the firm involves a deal with the USAF (U.S. Air Force). It provides the Government agency with Big Data solutions in securing and consolidating data from various different sources.
Theta Fuel [TFUEL]
Theta Fuel [TFUEL] is similar to Ethereum GAS in that it is the unit which powers on-chain operations on the Theta network. Its total Mcap is $6,275,641.
The developing team is based out of San Jose, CA, in the U.S. The network primarily works with online video streaming solutions. Participants, called relayers, earn TFUEL for every video stream they relay to other users on the network.
LTO Network [LTO]
The Netherlands based team has developed a hybrid Blockchain solution for data processing with GDPR compliance. The total market cap of the crypto is $6,949,697 USD.
Recently, IBM partnered with LTO in a bid to become the largest AI and IoT solutions provider for smart cities. Moreover, its partnership with IBM also finds applications in streamlining the data for small criminal cases for the Dutch penal system.
New Kind of Network [NKN]
NKN (New Kind Of Network) was founded in January 2018 which allows users to trade their unused internet bandwidths. Users are rewarded according to how much data they relay to the network. The total market capitalization of the network is $5,811,045 USD.
According to a press release in August last year, the network has more than 20,000 nodes world-wide which participate in relaying the data.
BAND Protocol [BAND]
The Band Protocol works on a dual token model, it was launched in September 2019 as an Initial Exchange Offering (IEO) on Binance. One of the leading projects of the Band Protocol is BitSwing, which provides for Binary options on Bitcoins. It utilizes the protocol’s layer-2 decentralized oracle solution for price discovery and settlement of trades.
Currently, the total market capitalization of the Band crypto is $5,902,332.
Request Network [REQ]
Request Network is a payment based decentralized finance (DeFi) application built for an ERC-20 token – REQ. It includes the protocol to ‘request payment’ which is recorded on the Blockchain. With a total Mcap of $5,808,999 USD, it is one of the leading DeFi solutions in the markets.
Willy Woo’s Investor View of Altcoins
The plan of action and design of most Blockchains seem lucrative and promises greater adoption in the future. However, currently, the real economic activity on these projects is limited.
Apart from their utility and partnerships, decentralized networks also require sufficient Lindy or network effect for sufficient liquidity and investor confidence. Leading on-chain analyst, Willy Woo, classifies the altcoins into two categories – Degenerates and Oscillators.
As we can notice for the price charts above, most of these small-cap cryptocurrencies exhibit degenerate qualities barring a few. According to Woo,
To find them, plot their BTC value. It must oscillate around a horizontal line, for at least one full bull-bear cycle (around 4yrs). More cycles are better. He adds,
These are monetary instruments, they build value with economic network effects.
Most of these projects are relatively new, released around or after the 2017 crypto bubble. Usually, there is a sell-off in the market in the long run of things after the launch. However, these projects still have an incubation period left before the next bull crypto bull cycle.
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