According to a growing number of analysts, the next cryptocurrency bull market rally has officially begun. Excitement over the arrival of new cryptocurrency investment products is increasing, major cryptocurrencies are surging, and the long, cold โcrypto winterโ now appears to be a distant memory.
It's time to start looking for coins and tokens that are likely to skyrocket as part of a broad crypto market rally. Three that are on my short list are bitcoin (CRYPT: BTC), Ethereum (CRYPT: ETH)and Link of the chain (CRYPT: LINK).
bitcoin
If there is one obvious cryptocurrency investment in 2024, it is Bitcoin. After an awkward start to the year, when it briefly fell below $40,000, Bitcoin is now on a roll. It is up 35% for the year and remains strong above the $50,000 mark.
Most of those gains, of course, have come based on the Securities and Exchange Commission's (SEC) approval of the new Spot Bitcoin Exchange Traded Funds (ETFs) at the beginning of January. In a single move, the SEC gave the green light to Bitcoin as an asset that anyone could hold as part of a well-diversified portfolio. Investor fund inflows into new Bitcoin ETFs have been off the charts. All of these new Bitcoin purchases should, of course, continue to push the price of Bitcoin higher.
And that's just the beginning, because Bitcoin has another catalyst that could be much more powerful: the next halving, scheduled for April. There have been three previous Bitcoin halving events, and each of them has lifted the price of Bitcoin to a new all-time high.
Past performance is no guarantee of future performance, of course, but investors are understandably excited by the idea of โโhow much higher Bitcoin could rise after April. Suddenly, Bitcoin's all-time high of $69,000 appears to be within reach, and Many investors believe that Bitcoin could end the year at $100,000 or more..
Ethereum
Amid all the hype surrounding new Bitcoin spot ETFs, Ethereum is also skyrocketing. This is mainly due to the growing narrative that Ethereum will be the next cryptocurrency to get its own spot ETF. A handful of Wall Street firms have already submitted applications and SEC approval could come as soon as May.
The only question, of course, is whether Ethereum will be another case of "buy the rumor, sell the news," like Bitcoin was in January. Simply put, the huge rally that Ethereum has seen so far in 2024 could fade in May, as soon as the new ETFs become available to investors.
That said, there is still huge growth potential with Ethereum, which is currently undergoing another upgrade to remain the best-in-class blockchain.
Link of the chain
With Bitcoin and Ethereum together accounting for almost 70% of the total value of the $2 trillion crypto market, it's worth looking for ways to diversify your portfolio beyond the two biggest names. Of all the cryptocurrencies in the top 20 by market cap, my personal pick is Chainlink.
This is because Chainlink, as a data oracle network, is completely different from both Bitcoin and Ethereum. Chainlink provides real-world data for smart contracts, which are one of the key components of decentralized finance. Since Chainlink is the largest and most well-known data oracle network, it is also the most valuable. The cryptocurrency currently has a massive market capitalization of $11 billion, ranking it 12th among all cryptocurrencies.
What makes Chainlink particularly interesting is that it is also a long-term play on an emerging trend known as tokenization of real-world assets. This refers to the process of transforming traditional financial assets (such as stocks and bonds) into digital assets that live on the blockchain.
These financial assets require data to properly price, and that is where Chainlink comes into the picture. Right now, Chainlink is one of the leaders when it comes to real-world asset tokenization, which has the potential to become a multi-billion dollar trend by 2030.
Portfolio diversification and risk factors.
While the long-term prospects for Bitcoin, Ethereum, and Chainlink look good, remember to do your due diligence before investing. Cryptocurrencies are notoriously volatile and regulatory risk is always a very real risk factor. As a general rule, it is best to invest in large-cap cryptocurrencies that have a diversified base of retail and institutional investors.
If I were forced to rank these three cryptocurrencies, Bitcoin would easily be my number one choice. But, as they say, it's best not to put all your eggs in one basket. Portfolio diversification is key, and two cryptocurrencies that could play a key role in this regard are Ethereum and Chainlink.
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Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool holds and recommends Bitcoin, Chainlink, and Ethereum. The Motley Fool has a disclosure policy.
3 cryptocurrencies to buy freehand in March was originally published by The Motley Fool
