From metaverse to sports tokens, there's something for everyone in this month's list.
Key points
Crypto had a rocky month in November as tax reporting rules and COVID news pulled prices down.
We've got the metaverse, Web3, smart contracts, and sports tokens on our radar.
November was a rough month for cryptocurrencies. The granddaddy of crypto, Bitcoin (BTC), reached an all-time high early in the month, only to tumble almost 20% in the following weeks. Unsurprisingly, many other cryptos followed suit.
Several factors pulled the market down, including the new tax reporting rules, news of another COVID variant, and various regulatory moves around the world. Plus, crypto is notoriously volatile, and new highs are often followed by corrective lows.
We can expect more volatility -- and possibly more price drops -- in December, especially if there are additional regulatory changes. Personally, I am still cautious about decentralized finance tokens in the short term, as I want to see what impact new regulation will have.
Some investors may see further price drops as a good time to buy the dip and pick up coins like Solana (SOL), Avalanche (AVAX), and Cosmos (ATOM) that have already made big jumps. Others may want to top up on old favorites like Bitcoin, Ethereum (ETH), and Cardano (ADA). For many more, it's a matter of holding through the dips and avoiding any panic sales.
With all that in mind, here are four altcoins to keep on your radar in December.
1. Enjin (ENJ)
We've talked a lot about Metaverse tokens in our recent monthly articles on altcoins to watch, as this is a key crypto trend right now. Sandbox (SAND) and Decentraland (MANA) have both risen over 500% since the start of October, according to CoinMarketCap data. Enjin is up almost 170% in the same time period.
It's wise to think carefully before jumping into the latest craze, especially in cryptocurrency, where speculation is rife. But Enjin is an interesting long-term metaverse project, as the platform allows users to create and trade non-fungible tokens (NFTs). NFTs are unique digital collectibles where the ownership information is coded into the token, and they play an important role in the way people own things in these virtual worlds.
It is very early days for the metaverse and we don't yet know how it will unfold. But if it does take off, NFTs will be a core element. Since Enjin makes it easy for people to store and trade their NFTs no matter which metaverse or game they bought them in, it's a cryptocurrency I'll be paying attention to.
2. Livepeer (LPT)
Another term that's being bandied about is Web3 -- and this is another trend to pay attention to. Web3 is an umbrella term for a next generation decentralized internet that doesn't rely on three or four massive companies. There are a number of Web3 projects that decentralize the way our information is stored, shared, and monetized.
One that has performed well recently is Livepeer, a decentralized video streaming network. Network participants can earn LPT tokens by contributing their unused computer processing power. Livepeer uses this network of computers to do the intensive work of reformatting videos for different devices. This way, it doesn't need expensive infrastructure to provide a cheaper and more reliable way to stream videos.
3. Elrond (EGLD)
Elrond is one of several smart contract cryptocurrencies to grab investor attention this year. It is a faster, cheaper alternative to Ethereum and has already attracted a number of projects.
Elrond recently announced a $1.29 billion liquidity incentive program for its newly launched decentralized exchange, the Maiar DEX DeFi platform. This offers big rewards to investors who stake EGLD and MEX, the Maiar DEX utility and governance token on the platform. As various programmable blockchains jostle for position, this move makes Elrond a coin worth watching this month.
4. Chiliz (CHZ)
Chiliz is a cryptocurrency aimed at sports enthusiasts. Fans can get involved with their favorite teams by buying fan tokens through its socios.com platform. Token holders can vote on decisions like celebration songs, messages on the captain's armband, and other social media activities. They can also win rewards, such as VIP behind-the-scenes access, signed memorabilia, and meet-and-greet experiences.
One reason Chiliz is interesting right now is its new NFT offer. The first live in-game NFT drop took place during a soccer match between AC Milan and AS Roma. Live NFTs are created based on in-game action, and these limited edition NFTs are already proving popular.
Another reason to keep Chiliz in your sights is that it is well-positioned as crypto exchanges move into sports sponsorship. The Crypto.com Coin (CRO) jumped this month on news it had bought the naming rights to the Staples Center. On top of that, Binance recently launched a sports fan token platform.
Invest with caution
At The Ascent, we favor a buy-and-hold investment approach, which means we look for coins with good long-term potential. CoinMarketCap now puts the number of cryptocurrencies on the market at over 15,000. Sadly, many of those coins will fail. This is still a relatively new and untested market, and some experts warn the industry could collapse completely.
Cryptocurrency investing can produce extraordinary returns, but it also carries high risks. That's why it's important to only invest money you can afford to lose and to ensure your crypto assets are just a small part of your overall investment portfolio. Research coins carefully before you make any decisions.
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