2 under-the-radar cryptocurrencies with more potential than Bitcoin

In the crypto market, all eyes are on you Bitcoin (BTC), and with good reason. Not only is it the largest crypto by market capitalization, it is also historically the one crypto that leads the market both higher and lower. That creates the opportunity for some cryptos to trade under the radar of investors who are too busy watching Bitcoin.

This may be the situation now with Litecoin (LTC -0.86%) and Hyphen (HYphen -0.87%), which has pushed steadily upward over the past month at a time when Bitcoin is losing momentum. Litecoin is up 39.70% over the last 30 days, while Dash is up 8.13% over the same time period. In contrast, Bitcoin is down 16.68%.

What do all these coins have in common?

Both Litecoin and Dash are based on the same cryptocurrency technology used to create Bitcoin. While Bitcoin was launched as the original cryptocurrency back in 2009, Litecoin was launched two years later as a “lite” version of it, hence the name. The goal of Litecoin was simply to improve on what Bitcoin already offered in terms of faster, cheaper payments.

The story is similar for Dash, which was launched in 2014 as a fork of Litecoin. This means that the original blockchain developers behind Litecoin decided to split the main blockchain and name the new Dash.

Image source: Getty Images.

The fact that all three cryptos are related is important because it means that all three are based on roughly the same proof-of-work blockchain technology that relies on mining to create new blocks for the blockchain.

This also means that all three of these coins undergo a process known as a “halving” on a schedule set by an algorithm. At a halving, the block reward for miners is halved. Bitcoin undergoes a halving every four years, as does Litecoin. Dash undergoes a halving every 365 days, because the block reward is reduced by only 7.14%, not 50%.

How to profit from the halving

Historically, halving events have been very lucrative for traders and have always been highly anticipated by the crypto market. The easiest way to profit from these events is to buy anywhere from 12 to 15 months before the next halving. Since the date of each halving is determined algorithmically, it is easy to determine when this will happen for each coin. The next Bitcoin halving is March 2024, the next Litecoin halving is July 2023, and the next Dash halving is May 2023.

Once you understand the timing of these halving events, it’s easy to see why Litecoin and Dash both seem to be diverging from Bitcoin right now. If historical models hold, one would expect Dash and Litecoin to benefit first from their respective halving events, with Bitcoin lagging behind by at least several months. Also, since the Dash halving is not nearly as pronounced as the Litecoin halving (7.14% compared to 50%), one would also expect a larger rise in the price of Litecoin than in Dash, which is what we are seeing. Right now, traders expect that Litecoin could see a 200% price increase by the next halving.

More potential than Bitcoin, but for how long?

For this reason, Litecoin and Dash may have more potential than Bitcoin in the near future. Crypto publications are already starting to talk about the “pre-halving rally” for Litecoin, which has only amplified the impact of this effect. Since the Bitcoin halving is not going to happen until 2024, it will likely trade sideways for the rest of this year and into early 2023. Thus, a very short-term window exists for Litecoin and Dash to outperform Bitcoin. At a time when much of the crypto market is deep in the red, this could be a sneaky opportunity to profit from both Litecoin and Dash.

However, in the long term I am still much more bullish on Bitcoin than on either Litecoin or Dash. For example, some traders predict that Bitcoin could rise to $63,000 by March 2024 as a result of investors’ anticipation of the next halving. If there is one cryptocurrency to buy and hold for the long term, it is Bitcoin. But if you’re looking to fill your crypto portfolio by the end of the year, it might be worth looking into Litecoin and Dash.