Experts' Take: What Altcoins to Invest in August

iHodl reached out to several financial experts to find out which altcoins are worth buying right now.

Positive on the crypto market has not been around as much lately, but now there is a moment, and the prospects for most small coins will depend on the direction of bitcoin's movement. In case of steady growth, almost all coins from the top 100 by market cap will rise, based on a speculative nature though. Interestingly, the demand for altcoins began to grow even before the recent jump in bitcoin — this is how the market reacted to the request for portfolio diversification from the retail investors after a tough lockdown. As the majority of altcoins does not even have a piece of infrastructure for institutional investment in bitcoin, this is where the power of crypto enthusiasts and amateur investors is concentrated.

As before, today we can recommend investing in ether (ETH), which attracts not only speculative demand, but also relies on its own internal growth factors. Firstly, this is the approaching transition to Ethereum 2.0. Secondly, the constant and steady growth of stablecoins that also run on the Ethereum blockchain. Thirdly, decentralized finance (DeFi) applications, which are gaining momentum and lead to the fact that tokens locked in them, increase the shortage of coins in circulation.

And for the first time in so long, XRP (XRP) is worth a look. Due to disappointment in the progress of banks in the context of cheaper and faster international transfers, XRP may receive its growth momentum if a new rally begins. In addition, the coin is already is showing signs of a turnaround and at the same time is very cheap in historical terms.

It is worth paying attention to crypto.com Coin (CRO). Although the coin has grown by 170% over the past three months, the project has made it simple what was difficult back in 2017. Namely, a working application for mobiles, where you can buy cryptocurrency from a regular bank card, exchange it within the application and order a Visa card in order to directly link your cryptocurrency wallet with it and pay with cryptocurrencies.

Part of the investment can be directed towards bitcoin's forks — even the most controversial ones — as in case of general growth they usually give a good increase.

A joke cryptocurrency called dogecoin (DOGE) also deserves attention. It has a recognizability, and for incredible reasons this coin shows bursts of growth from time to time, even if you have to wait.

By the beginning of August, the cryptocurrency market is in a rather turbulent state, but one cannot fail to note the confident positive dynamics of some main altcoins.

First, I traditionally want to advise you to increase the share of ETH in your investment portfolio. Today, this is the most promising and self-sufficient altcoin. In the long term, such investments are guaranteed to bring profit.

Among other coins, I could advise you to pay attention to the following altcoins: bitcoin cash (BCH), stellar (XLM) and XRP (XRP), as they have a real infrastructure base and are closely connected with the real sectors of the world economy, which guarantees stable growth of rates coins in the future and at least preservation of investments.

Following the great boost in BTC price, altcoins also managed to gain capital. August is coming, usually the problematic month of the year, but maybe we will see something truly unusual?

ETH: Updating Highs

ETH performed very well in July, ending the month at ~ $338. Now that Ethereum is preparing the launch of the 2.0 network and all traders' thoughts are around this event, the opportunities for ETH are wider than ever. The ETH benchmark is $350, which is a very conservative target.

Tezos: Still Ahead

The situation in XTZ is developing very interesting. Unlike other altcoins, the cryptocurrency spent July in the sideways, but there is demand for it, and the price can go up to $3.5 if the market believes in the coin and fixes the value above $3.

XRP: Rise Continuation

XRP does not knock down neither information about new rounds of litigation with the CEO of the company, nor the technical nuances of the movement of altcoin. XRP has a clearly visible growth target of $0.26, and there is a high probability of dynamic progress towards it.

XMR: What If Up?

Unlike other altcoins, XMR's upward movement is cautious. But it is even better this way: the trend will be stronger and more stable. If the conjuncture allows, the XMR rate is able to move to $85 — there are definitely technical opportunities for this. And a few words about BTC, the flagship of the cryptocurrency market, cannot be ignored. By the beginning of August, the BTC rate is at $11,126. Now it is important to gain a foothold above $11,050, and then the road for the bulls is up to $11,350.

Bitcoin has entered a period of bullish movement, but I would not expect cryptocurrencies to triumph up to $20,000 or higher anytime soon. We will see more than one pullback in the coming weeks, so in August all investments should be made only after a thorough study of the market situation at the moment. In August, we all need to prepare for high volatility, so newcomers will have a very difficult time, even old-timers of the crypto market can be seriously worn out. One of the dangers is to buy coins at their peak and, having failed to cope with emotional excitement, sell them in the red when the rate rolls back.

Now in the portfolio it is desirable to already have bitcoins, ether, which looks very encouraging amid reports of the imminent launch of ETH 2.0, and some altcoins. Among altcoins, the most growing ones are likely to remain the tokens of DeFi projects in the near future, which continue to show rapid growth. Among the altcoins, the token of the Binance crypto exchange binance coin (BNB) also performs well, but you should not expect crazy profit with it. But let me stress again: August can be very volatile, so you should be extremely careful in your decisions and be able to deal with stress.

When it comes to investing in cryptocurrency, there are several important points that you need to clarify for yourself in advance. Ask yourself what your investment goals are and what the investment horizon is.

For example, take a look at the top three assets on the CoinMarketCap ranking at the time of publication, and see how their prices have changed over the past two years from July 2018 to July 2020.

In July 2018, the bitcoin price fluctuated in the range between $6,000-$ 8,000, while today the asset is worth about $11,000. If you invested in the Satoshi Nakamoto project two years ago, your profit today would be about $3,000. However, if you entered the market in March 2020 and decided to exit now, you would earn twice as much.

What happened to ether? In July 2018, the airwaves fluctuated at levels $410-480. Today, ETH price is about $318 and over the past two years has not exceeded the highs of two years ago. So on this particular investment, a person who would have invested two years ago would have suffered losses. At least for today, as in the future analysts predict growth for ETH due to the boom of the DeFi economy.

Interestingly, XRP has not grown over the past 24 months, but, on the contrary, has fallen twice from $0.44 down to $0.22, so that a long-term investor would hardly have been able to make money on this asset in two years.

Does this mean that cryptocurrencies are not suitable for long-term investment? Not at all.

If you are impressed with XRP, ask yourself, is the idea behind it viable? Does RippleNet, an international interbank payment system with 300 banks, has a chance to become a worthy competitor to SWIFT, which is co-founded by 248 banks from 19 countries?

Or clarify what DeFi is and why there are about $3-4 billion locked in it, and then, perhaps, you will be interested in ETH.

Perhaps, over time, the reputation of these projects will only get stronger, but so far they and similar coins are suitable for trading on short time intervals.

How to choose alts if you decide to trade them in the interval from 1 month to 6 months?

It is important to understand that there is no ideal crypto for trading, and if traders make money on it, it is only due to a variety of factors, where the market situation and news are only one of the indicators.

Follow the trends on the chart, subscribe to crypto signals on Telegram, assess the liquidity of the coin and the degree of its prevalence on various exchanges, connect a cryptobot that will monitor suitable entry and exit points from the market 24/7, develop your own strategy and include the risk ratio in it. Keep a log of successful and unsuccessful trades, subscribe to the auto-follow option, engage in arbitrage, go long and short — and do it all the time!

It is also always helpful to look at an asset's trading volume over the last 24 hours, its market cap and the level of market dominance.

In short, to understand the investment potential of certain altcoins, you should to look at them from the point of view of both technical and fundamental analysis. If you want to trade, then any altcoin is suitable here, the only question is how much you can risk and lose on it, over what period of time you plan to make a profit and what take-profit you expect.

This article is distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice.