- Stocks and bitcoin have been relatively boring recently while altcoins remain highly volatile.
- William Noble, the chief technical analyst at Token Metrics, shares his view of the crypto market.
- Here are three little-known altcoins to buy that have promising upside, Noble said.
- See more stories on Insider’s business page.
Compared to high-flying cryptocurrencies, investors appear to think that stocks couldn’t get any more boring.
Price action in the S&P 500 has been remarkably unremarkable lately, as trading volume has been under its three-month average in every session since August 11, according to Yahoo Finance data reviewed by Insider. The index is little changed since then, and is up about 0.1%.
Meanwhile, Bitcoin (BTC) has been much more fun to watch than stocks because of its volatility. According to Yahoo Finance, since August 11 bitcoin’s price has surged from a low of $43,861.45 all the way up to $52,700.94 on September 5 – a 20% increase – before plummeting once more to $43,591.32 on September 13.
But even the world’s biggest crypto’s price swings pale in comparison to those of smaller altcoins, which commonly experience double or even triple-digit price jumps or crashes. For instance, the price of hot new altcoin Solana is up over 255% in the last month.
This casino-like action scares away many conservative investors, who see investing in cryptocurrencies as nothing more than gambling. Others, like Nikolaos Panigirtzoglou, a global market strategist at JPMorgan, believe that the recent run-up in altcoin prices is part of a hype cycle that precedes a dramatic decline.
But William Noble, the chief technical analyst at crypto data and research firm Token Metrics, takes a different view.
“Everyone thinks that crypto is about speculation,” Noble said in a recent interview with Insider. “The hype around NFTs (non-fungible tokens) gets all the headlines. Meanwhile, we tell people that altcoins are about investing in the future of tech.”
Risk-averse money managers who avoid cryptos may be taking a bigger risk than those who have embraced the space, says Noble. JP Lee, the ETF product manager at VanEck, agrees – he told Insider that when it comes to cryptocurrencies, both individuals and institutions alike must either “get on board, or be left behind.”
“The next Nasdaq 100 is being built inside the altcoin universe,” Noble said. “And a lot of it is going to be built inside ethereum and probably other platforms like Solana. So the conclusion is, bitcoin and crypto is the future of money; altcoins are the future of technology and also Web 3 – the next generation and evolution of the internet.”
Cryptos are the backbone of this so-called “Web 3,” or the next iteration of the internet. Some, like Noble, believe that Web 3 can change the world by removing central authorities like governments and intermediaries like banks from business and finance – an idea commonly referred to as decentralized finance, or DeFi.
“It’s the internet and banking without Silicon Valley and Wall Street,” Noble said.
Wall Street is unlikely to go the way of the dinosaur and can maintain some relevance by helping its clients access the DeFi universe, which is a potential challenge for investors who aren’t tech-savvy, and by trading bitcoin, Noble said.
Crypto bulls like Noble see the coming revolution as a means of empowering individuals and protecting them against powers like central banks, which continue to increase the global money supply. Bitcoin in particular, which has a fixed supply, is viewed by many as an inflation hedge.
“If you own crypto and use DeFi, that’s how the common man protects themselves,” said Noble, referring to inflation. “Web 3 is power to the people. And given the environment, people are going to need that power.”
Opportunities in the crypto market
September has proven to be a lackluster month for stocks so far, and Noble expects cryptos to follow a similar path. The two are correlated, Noble said, adding that he expects cryptos to mirror seasonal stock trends by rising in October and then in December on a “Santa rally.”
Noble is bullish on bitcoin and warned investors not to underestimate it, and he expects the token to hit $100,000 by year’s end. There’s no reason it should fall below $40,000, he added.
But Noble is an even bigger believer in ethereum and its native ether token (ETH), given that its network is the backbone for many smaller altcoins. Ether can rise to $6,000 or $12,000, depending on how low the dollar falls and how bitcoin trades, Noble said.
“Right now, it’s all the rage to literally ‘moon’ anything that’s perceived as an ethereum alternative,” Noble said, borrowing the lexicon of small-time traders. “After everyone gets done buying the ‘ethereum killers,’ there are several facts that are going to come to light.”
The facts about ethereum that make up Noble’s bull case are as follows: First, the token “is being drained off of exchanges at an accelerated pace” that he called “almost breathtaking.” Second, the supply of ethereum is being “drained every day” by a deflationary protocol called EIP 1559 that lowers the number of ether tokens in circulation. Simple supply and demand dictates that with fewer ethereum tokens on the market, those that remain are worth more – and their worth is only enhanced by the sheer number of apps being built on the ethereum network.
But there are opportunities in the crypto market besides ethereum and bitcoin.
Below are three little-known altcoins that Noble says have big upside potential along with their ticker, market capitalization, and Noble’s thesis for each.
CoinMarketCap
Ticker: AST
Market cap: $48.8m
Thesis: “This is an exchange that differentiates itself in that they’ve developed a mechanism for very low slippage. When you put an order into a decentralized exchange, it’s sort of nebulous as to the price you get. It’s very reminiscent of agricultural futures back in the ’70s and ’80s.” Noble added that “AirSwap does an incredibly sophisticated job of solving the problem of trade execution, and it actually manages to do it on the ethereum network.”
2. Eden
CoinMarketCap
Ticker: EDEN
Market cap: $74.7m
Thesis: “It’s very complicated, but it’s backed by some of the big venture capitalists out there. It offers a fair and transparent set of rules for ordering transactions within each block on ethereum. Lately, we’re seeing more and more malicious users taking advantage of the way ethereum works, so Eden network protects ethereum traders from what they call ‘miner extractable value’ and ‘arbitrary reordering.'” Noble added that some think “that this could be the next big thing. It’s tough to understand, but it scores very high with us.”
3. Immutable X
CoinMarketCap
Ticker: IMX
Market cap: N/A
Thesis: “Immutable X gets you into the NFT space. It’s an ethereum-based Layer 2 solution. That means this allows you to do things with NFTs on the ethereum network, but it’s sort of what they call a Layer 2, which means it runs under the ethereum network without the gas fees.” Noble continued, “The bottom line is, it allows for NFT transactions on ethereum with lower gas fees, and it has impressive backers like Coinbase and Galaxy Digital.”