As we embark on a new year filled with promise and potential, the crypto market seems like a great place to begin searching for assets primed for a bull run. As the so-called crypto winter began to thaw last year, investors have flocked back to digital assets in anticipation of major gains in 2024. With multiple catalysts on the horizon, from increased institutional adoption to innovations in blockchain technology, there is no better time to build positions in high-quality cryptocurrencies.
I believe the smartest way to approach this space is to establish positions in larger, safer cryptocurrencies before venturing into more speculative small-cap assets. This strategy allows investors to benefit from the rising tide that lifts all boats, while minimizing downside risk. Before chasing the next hot altcoin, it’s wise to anchor your portfolio around the cryptocurrencies that are most likely to stand the test of time.
With this balanced philosophy in mind, I see three clear standouts for 2024 in the crypto space.
Bitcoin (BTC-USD)
Kicking off the new year, Bitcoin (BTC-USD) has reaffirmed its dominance as the market leader after rallying past the key psychological $45,000 threshold. Make no mistake about it – despite the fancy buzzwords thrown around in crypto these days, Bitcoin remains the gold standard for a reason. Without smart contracts or a marketing team selling you on pipe dreams, Bitcoin continues its gradual, inexorable climb over the long term, driven by its unyielding supply and demand economics encoded into its very core.
Here’s another reason why you need Bitcoin exposure in 2024. In approximately four months, it’s anticipated there will be another halving event that will slash Bitcoin mining rewards in half overnight. This supply shock should stoke Bitcoin prices, assuming demand for this digital asset continues on its long-term trajectory. Pair this with swelling institutional interest and the rising probability of a spot Bitcoin ETF approval, and capital gains are likely. The token’s spectacular recovery from recent lows could merely be a preview of what’s to come in 2024.
Yet, Bitcoin’s biggest edge is its staying power. Crises and crashes have come and gone, yet Bitcoin is more battle-tested than ever. When the music stops for lesser-known cryptos, Bitcoin will keep dancing to its beat, driven by fundamentals rather than hype. Buying Bitcoin remains one of the soundest ways to gain crypto exposure over a long time horizon.
Ethereum (ETH-USD)
As the second-largest blockchain project, Ethereum (ETH-USD) builds upon Bitcoin’s foundations by incorporating smart contract functionality, allowing for a vastly expanded range of potential applications. After transitioning to a more energy-efficient proof-of-stake consensus mechanism in 2022, Ethereum appears poised to maintain its advantage as the most secure and stable blockchain for decentralized applications and services.
Ethereum powers much of the flashy Web 3.0 world – NFTs, Metaverse platforms, DeFi protocols, and more. As crypto adoption advances in 2024, Ethereum is well-positioned to capture value from surging activity across its burgeoning ecosystem. And with an ambitious roadmap focused around scalability and security upgrades on the horizon, Ethereum’s development shows no signs of slowing. That’s impressive, when one considers its commanding lead in the Web 3.0 space.
While recently lagging Bitcoin in terms of returns, Ethereum has vastly outpaced Bitcoin in every bull market since its inception. I think that trend could continue if more smart contract use cases are found.
Solana (SOL-USD)
Solana (SOL-USD) offers more concentrated upside, as it is more speculative. As an Ethereum competitor, Solana’s blockchain activity has surged alongside the increasing adoption of fast, low-cost NFT minting and DeFi applications.
Solana’s traction in Web 3.0 means its potential volume could overwhelm larger rivals. Like broadband cables, existing networks can choke with overuse. If Ethereum gets clogged in 2024’s bull market rally, developers and liquidity could readily migrate to faster alternatives like Solana.
Admittedly, by compromising decentralization for speed, Solana’s frequent outages are quite concerning. But I don’t think a project of this size will ever permanently go down. It is not a bad pick if you seek high-upside exposure with manageable risk.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
