Rising rates, the bankruptcies of high-profile exchanges and tokens, and regulatory threats led investors to safer assets in 2022, causing several cryptocurrencies to fall. Early 2023 saw a "crypto winter" persist. Over the previous year, investors returned to cryptocurrencies in anticipation of lower interest rates and warmer macro conditions. If you think the crypto market will improve, buy these three cryptocurrencies.
1. Bitcoin Bitcoin (CRYPTO: BTC) reached $73,580 on March 14, a record high. Although it dropped to $65,000, it's still up 130% in a year. Three factors sparked that rally. In January, the SEC approved the first 11 Bitcoin spot price ETFs. That clearance made direct Bitcoin investments easier, previously only possible through direct purchases or ETFs tied to trusts and future contracts.
Second, more investors are watching the April "halving," which will cut Bitcoin mining payouts in half. By tightening Bitcoin's supply every four years, that procedure may raise its price. Finally, falling interest rates and FOMO brought investors back to Bitcoin. Bitcoin's price will certainly stay unpredictable, but tailwinds might boost it through the year.
2. Ethereum (CRYPTO: ETH) rose 90% to $3,500 in the past year. These advances were fuelled by prospects for spot price ETF approvals, Ethereum Network efficiency upgrades, and additional decentralized currencies and apps on its blockchain.
Ethereum's price fell as the SEC requested more information from the Ethereum Foundation and continued to categorize Ether and other Ethereum tokens as securities. The SEC emphasized that Bitcoin was the only cryptocurrency that could be considered a commodity rather than a security.
That loss dashed hopes for Ether spot price ETF certification, but it might rise once it clears regulatory barriers. Ether's supply has been progressively falling since late 2022, when it switched from "proof-of-work" (PoW) to "proof-of-stake" (PoS), and token burning are speeding that decline. Therefore, it may be wise to buy Ethereum while the market is focused on Bitcoin.
3. XRP XRP, the native cryptocurrency of the Ripple payment protocol network, recovered more than 40% in the previous year but is still more than 80% behind its January 2018 high of $3.84. XRP, like Bitcoin and Ethereum, lost investors as interest rates rose. However, XRP has distinct regulatory and competitive challenges.
In late 2020, the SEC sued Ripple and two executives for unlawful XRP token sales that raised $1.3 billion. These tokens should have been unregistered securities, officials said. However, a U.S. court determined in July that Ripple's XRP token sales were not unregistered securities, rejecting the SEC's appeal three months later. The SEC withdrew its action against Ripple's two executives, but the case will go to trial in April.
Ripple must compete with Ethereum, which services more markets, and Solana, which processes transactions faster. Those difficulties are substantial, but if Ripple wins its SEC case and develops its network to compete, its price might rise significantly in the coming months
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