October was another record-setting month for cryptocurrencies as Bitcoin (BTC) surpassed its previous all-time highs and the overall crypto market topped the $2.6 trillion mark for the first time.
Predictably, the highs brought out cries from experts on both sides of the debate. Some warn the highs are symptoms of a bubble that’s set to burst, while others forecast that Bitcoin and the crypto market will go even higher. It’s always good to be cautious after a big price rise, as given the volatility in the crypto market, there’s a strong possibility that prices will fall again.
Long-term investors may find it easier to keep their sights focused on the horizon and tune out short-term market sentiment. But it’s still a good idea to keep an eye on overall trends, especially as they can guide our decisions on which altcoins to keep on our watchlists.
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1. Polkadot (DOT)
Polkadot is one of many Ethereum (ETH) alternatives, with smart contract capabilities that process transactions quickly and cheaply. Where Polkadot stands out is its interoperability — the ability to talk to other blockchains — which will be crucial for the success of the crypto industry as a whole.
Polkadot is particularly worthy of attention in November because it will begin its parachain auctions. What are parachain auctions? Let’s start with parachains; interconnected chains that sit on top of the main Polkadot relay chain. Parachains work in parallel with one another to avoid the network congestion we’ve seen on other platforms.
There’s only room for a limited number of parachains, so projects need to bid to lease space on the network. Hence the auctions.
If you want to dig even deeper, take a look at some of the projects bidding for parachain space. It may be more complicated to invest, but understanding them is a great way to learn more about developing cryptocurrencies.
Available from the following U.S. crypto exchanges: Coinbase, Kraken.
2. Stellar Lumens (XLM)
I’m often hesitant about cryptocurrencies that are only designed as a form of payment. One concern is that it is a crowded space — and one that’s complicated by stablecoins and central bank digital currencies (CBDCs). However, Stellar Lumens isn’t just any old digital payment. It has its sights set on the multi-billion-dollar remittance and money transfer market.
If Stellar wasn’t already on your radar, November is a good time to add it to your watchlist — especially as it recently announced a partnership with one of the world’s largest money transfer companies, MoneyGram.
Stellar wants to make it easy to send money — whether it’s dollars, pesos, or Bitcoin — around the world. It uses blockchain technology and the XLM token to make money trading and transfer more efficient.
Stellar has a lot in common with Ripple (XRP), another digital payment coin. This is unsurprising since one of its founders, Jed McCaleb, was also a co-founder of Ripple. However, while Ripple is focused on the global banking industry, Stellar is more orientated toward individuals. Most importantly, while Ripple has an ongoing lawsuit with the SEC hanging over it, Stellar Lumens does not.
However, be aware that regulation could still impact XLM as authorities look to introduce more controls on bank-like services, which may include Stellar Lumens.
Available from the following U.S. crypto exchanges: Coinbase, Binance.US, Kraken.
3. Sandbox (SAND)
From Decentraland (MANA) to Sandbox, virtual worlds have been getting a lot of attention recently. Indeed, Facebook plans to spend $10 billion this year on its metaverse division and Mark Zuckerberg sees virtual reality as a key theme for the future.
Cryptocurrency is an ideal form of payment in these virtual worlds, though it isn’t clear whether one virtual world will eventually come out on top. It’s worth investigating the landscape carefully and even visiting these metaverses before you part with your money.
Sandbox players can buy and build digital real estate, as well as creating their own games and NFTs. It’s an Ethereum-based game that, like the hugely successful Axie Infinity AXS), works on a play-to-earn model.
Available from the following U.S. crypto exchanges: Gemini, Kraken.
Be cautious and do your own crypto research
Each month, we try to highlight interesting cryptocurrencies that are worth further investigation. But you need to do your own research too — look at how each investment fits into your overall portfolio, whether you’re comfortable with the project’s leadership and their long-term vision, and whether you believe the crypto will find enough utility with a wide user base.
We usually only feature coins in this column that you can buy from major U.S. cryptocurrency exchanges. There are many opportunities with other coins, but buying from less-reputable exchanges carries additional risks. Since there are plenty of exciting cryptos that are easily available, it doesn’t make sense to tell you about ones that are harder to get a hold of.
November promises to be another interesting month. Not least because we might finally get some long-awaited additional regulatory crypto guidance. Though that’s been the case for several months now, so I’m not holding my breath.