I wonder, why you think actually IOTA is undervalued compared to Bitcoin or Ethereum and how much exactly?
The short answer is I have no idea how much exactly, I just have a feeling that it is way undervalued.
I think MOST cryptos in their current market conditions act very similar to how OTC penny stock work. Cryptos are highly volatile, speculative, and unregulated due to its decentralization nature.
One key behavior in pennystocks that transcend to cryptoworld is management roles in the handling of the product (Cryptos are products of someone's creative mind). Usually, top managements would present lots of hopes, dreams, and promises about their new products to investors so that they can raise much-needed money for the continuation of their business. Very often, the penny stocks would crash hard after management fail to deliver their promises. If you happen to follow pennystocks, successful traders are those who took short positions.
So back to the cryptoworld, how to would avoid investing in bad cryptos? It could be as simple as separating cryptos that act like bluechip stocks and only invest in those. Avoid cryptos having pennystocks symptoms. Crypto-investors should not / do not need to know how quantitatively low a crypto can fall, just know that it is a sound investment.
I came up with this M.A.P strategy from my many hours of reading about the stock market and my personal experiences in long-term investments. I will leave evaluations of Bitcoin, Ethereum, IOTA to those people who found this strategy useful.
Management - Really do a lot of research in the people behind the crypto. Research on the people who are the faces of the crypto, the organization, and the organizations backing the group. How and where they see the future of the crypto.
Acquisition - As in customer acquisition, research on the impact of the crypto. In open source technology, which classified most cryptos, the customers are the community and early adopters. Research on the support and contribution of the community. Checkout code repositories (Github) to understand how technical issues are being reported or resolved by the community. Read on the overall progress of consumer utilization of its platform through their official blog or other news venues.
Product - Most importantly, the product/crypto itself. What problems does it solve? Are there alternative solutions to those problems? Study on the advantage of the crypto vs. its competitors. Read the white paper.