If I take a look through the top 100 cryptocurrencies on CMC it's hard to find anything now that screams undervalued.
Many coins have had spectacular runs up, gaining 10x, 20x or more in the past couple of months. Even coins in the top 20 have seen these kinds of gains, which is impressive given their size and market cap.
Even though many of these are great projects, as an investor I simply won't buy something that has already gone up significantly. I will only buy at the bottom, when a cryptocurrency is at the end of a long correction.
I'm also very cautious in buying smaller, less known projects, particularly ERC20 tokens. I always take large positions only in actual cryptocurrencies or platforms, not tokens, and only in projects that I see as being permanently "Top 20" coins. I've just seen it happen too often that an ERC20 token takes off like a rocket into the top 20 or 30, has a sharp run up, and then falls back into the bottom half of the top 100, or lower, and stays there.
As a buy and hold investment this is not something I want to see, it's pretty demoralising! Stability on the way down is as important as gains on the way up if you are going buy and hold.
Taking all these factors together, the one project I really like right now is NEO.
It's not a project I would ever have as a majority position in my portfolio, as there are many unanswered questions around the speed of their development, decentralisation, and number of active nodes actually running. But from a fundamental perspective I still think the project is solid.
We have already had a number of ICOs released through the platform as NEP5 tokens, something which will only see more of. There is a large and loyal development community surrounding NEO, and a very active subreddit with over 50,000 subscribers. NEO also has a very real advantage over Ethereum in terms of scalability, something which the release of Hash Puppies, something like Cryptokitties but on NEO, will make very evident in the near future.
But perhaps most importantly, I do believe it's inevitable for the ban on ICOs in China to be lifted at some point in the future. It just has to happen. And when we do see that, NEO will absolutely skyrocket, and be able to achieve it's full potential. Now is really the time to accumulate, before that news comes out, whenever that is.
Although having said all of that, I'm not buying NEO, I'm buying GAS.
Looking at the chart of NEO above you can see that we have already had a breakout from the descending triangle correction that has been in place since September, which has taken up from around to $40 to a recent high of $80. After the consolidation we've been seeing over the holiday period is over, I fully expect this breakout to continue and accelerate.
You can see a similar breakout waiting to happen on the GAS chart, also from a descending triangle correction, but it has only barely started, if at all. At the time of writing GAS is still sitting very close to multi-month lows in BTC, and even USD, considering how much the rest of the market has gone up. Right now GAS only has a market cap of $282 million, and is sitting at number 78 on CMC.
If we look at the same chart, but with GAS plotted against NEO, this pattern becomes even more pronounced.
You can see that GAS is at the tail end of a very long descending triangle correction, even longer than in BTC or USD. This means there is that much more pent up energy in this asset. It's like a coiled spring, pushed into a tighter and tighter range. NEO and GAS are twin coins in the NEO ecosystem, and it is well known that GAS is leveraged to NEO, which means that when NEO goes up, GAS goes up more, and when NEO goes down, GAS goes down more.
In the past we have seen a 1:1 price ratio between NEO and GAS, and I think we will see that again, or GAS even being worth more as a coin than NEO. At the moment 1 GAS is worth only 0.4 NEO.
Because of this I'm buying GAS now, as a way to essentially buy NEO in the future, but at a 60% discount.
As always this is not financial advice, it's just my thoughts and what I'm doing. Please make your own decisions, and let's see if this one can do as well as Litecoin and Ripple!
