4 Altcoins to Watch Closely in March

These cryptos could perform well in March and beyond.

Crypto prices continued to struggle in February as the world grappled with the escalating Russia-Ukraine crisis. The Russian invasion also came on top of talk of economic tightening from the Federal Reserve. Economic uncertainty tends to hit high-risk assets like crypto, and that uncertainty is far from over.

There's a good chance March will be another rocky month for the cryptocurrency industry -- especially if authorities push forward with increased crypto regulation. This has been on the horizon for some time, but may happen more quickly if governments believe Russia is using crypto to evade sanctions.

As a result, it's a good time to stick to more established cryptocurrencies like old favorites Bitcoin (BTC) and Ethereum (ETH). Smaller cryptos carry more risk and are less likely to survive a prolonged period of low prices.

If you're looking for options, here are some altcoins to watch closely in March.

1. Polygon (MATIC)

Until Ethereum can complete its upgrade (probably not until 2023), the world's second-biggest blockchain will likely struggle with heavy network congestion and high gas fees. This has driven some projects to other smart contract cryptos like Solana (SOL) or Avalanche (AVAX).

But Polygon, which is a layer 2 solutions aggregator, lets developers continue to use the Ethereum platform they are used to. Layer 2 solutions sit on top of an existing blockchain to improve performance. Polygon's become the go-to layer 2 for Ethereum because it lets developers choose the right solution for their project, rather than offering a one-size-fits-all answer.

2. Sandbox (SAND)

Sandbox is a leading metaverse token that shot to fame on the back of million-dollar land sales and celebrity attention from the likes of Snoop Dogg. Its price jumped over 15,000% last year according to CoinMarketCap data. Investors are unlikely to see those returns again, but for metaverse fans, it is still an interesting project.

The reason it is interesting right now is that you can stake SAND on the platform and earn decent returns. The returns won't stay this high forever, but as a personal example, I am currently earning an APY of 35% on my SAND deposits. If you've never staked crypto before, you're essentially tying up your assets to contribute to network security. There are risks, but it can be a useful way to make your crypto work for you.

Sandbox is available on the Polygon network, so it's possible to stake SAND on the platform without paying Ethereum gas fees. You will need a compatible crypto wallet, and it's worth taking time to understand the ins and outs of staking.

3. Cosmos (ATOM)

Cosmos has just completed a major upgrade to its ecosystem. The crypto that promotes itself as the "internet of blockchains" has big plans for 2022. Cosmos tackles an area that's critical for blockchain's evolution: interoperability, or getting different networks to talk to each other. Cosmos's latest Interchain Accounts upgrade means one blockchain on its system can access the characteristics of another, such as staking or token swapping.

Cosmos is currently the 20th top crypto by market capitalization. Like many cryptos, it is down from its all-time high. But what's noticeable from its recent price history is that it outperformed market leader Bitcoin and the rest of the market at several points this year. If the market as a whole improves, Cosmos could be well positioned to surge.

4. Illuvium (ILV)

When I write these articles, I mostly only look at cryptos that are available from top U.S. crypto exchanges. But if you're looking for lesser-known coins, you might put Illuvium on your watchlist. According to CoinMarketCal, the fantasy role-playing game has a public beta launch planned for March.

Blockchain gaming has gained popularity following the success of Axie Infinity. There's a lot of excitement around Illuvium, which promises to be a very playable and accessible crypto game. However, it is much less established than other cryptos on this list, which means it also carries increased risk.

Bottom line

The recent volatility and dramatic price drops are a good reminder of how risky the crypto market can be. The tradeoff for high potential rewards is the risk and uncertainty we're seeing now. As a long-term investor, it's good to evaluate new cryptos with a five- or 10-year perspective. When you research cryptos, think about how the project might perform over time rather than looking for those with more speculative short-term potential.

Most importantly, if you're considering buying any of the cryptos above, only invest money you can afford to lose. That way, if the market does fall further, you won't lose money you need. It's also a good idea to make sure you're on top of your other financial goals such as your emergency fund and retirement savings before buying crypto.