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Key takeaways
- Bitcoin has gained in popularity as an alternative investment and has recovered surprisingly well after last year’s crypto winter
- Bitcoin and Ethereum have stalled since the debt-ceiling crisis picked up speed, but could break new markers once deal is signed off by Congress
- Ripple’s XRP currency could get interesting if it wins its SEC case, having already gained 48% this year
Crypto: love it or hate it, it’s an asset class that’s here to stay. The industry has always been turbulent, but it went through arguably its most challenging period last year with the ‘crypto winter’ and collapse of crypto exchange FTX. But that’s all changed this year with Bitcoin and other cryptocurrencies making a serious comeback.
Does that make crypto a buy this year? Quite possibly, depending on your risk appetite and portfolio make-up. We’ve got the lowdown on what’s happening in the crypto market, the big and small cryptocurrencies that are trending at the moment and some wider crypto industry stocks to consider for your investments.
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What’s happening in the world of crypto?
In 2023 crypto recovered from the 2022 market crash where over two-thirds in value was wiped off the market, FTX’s CEO, Sam Bankman-Fried, was revealed to be a fraudster and many other companies collapsed into bankruptcy.
As it stands, crypto’s entire market cap is $1.14 trillion – that’s a lot of value, and way off its peak of an estimated $3 trillion, so various countries are vying to become crypto hubs including the UK, Hong Kong, France and Canada among others. China has even introduced its own digital yuan in a bid to create the first central bank digital currency.
The debt-ceiling crisis has also turned a lot of investors to look at alternative assets if the US were ever to default on its debt. That’s a very unlikely scenario given it’s the world’s biggest economy, but the latest drama has spiked interest in crypto in the last few weeks.
President Biden had wanted to impose a 30% tax on crypto miners for their electricity use, but that appears to be off the table now in the debt-ceiling deal. Crypto miners beware: it wouldn’t be surprising to see the talk of a tax revived again in the future.
The best cryptocurrencies to invest in for 2023
Bitcoin
Bitcoin is the biggest cryptocurrency with a market cap of $537.5 billion. On Monday Bitcoin surged to near highs of $28,500 and the highest price in two weeks as news that the debt-ceiling drama had finally reached an agreement, but it hasn’t kept the gains since and is back down to the $27,000 mark.
It’s still up 63% this year and in 2024 we have the Bitcoin ‘halving’ which some Bitcoin acolytes think could send the price to the moon – it could well happen after the 2020 halving saw Bitcoin gain 533% in value by 12 months later.
Ethereum
Then there’s Ethereum, which last year saw a major upgrade to the network to drastically reduce the crypto’s energy usage by 99%. It briefly came within reach of the $2,000 mark at the start of May but has been hovering around $1,800 ever since.
Ethereum is still down around 60% from it’s all-time high and has a market cap of $233 billion, but the background work on reducing energy use and position Ethereum for DAOs and dApps positions the crypto well for long-term growth.
XRP
XRP is much more of a gamble than the others. It was created by Ripple, which has been battling the SEC for three years now – and it’s looking like the tide is turning after it’s been revealed the SEC’s former director made comments in 2018 saying Ether token transactions were not securities.
If Ripple wins the case then it would be a rallying cry for XRP, which has already seen a 48% lift since the start of the year to hit $0.51. It could be the buy of the year should the price shoot up at Ripple’s vindication moment. But that’s still a big if.
Memecoins
It’s not worth putting too much stock in these, but they could be a fun addition to an existing crypto portfolio. Dogecoin is famous for its price swinging wildly depending on whatever Elon Musk tweets; it’s down 90% from its all-time high from 2021, and at just $0.072 you could buy this one just for kicks.
The latest new memecoin is Pepecoin, which launched anonymously in April as an Ethereum blockchain token. After a meteoric rise at launch and hitting a $1.6 billion market cap, it’s now sitting at around $700 million in total value.
Crypto-adjacent investments to consider
There’s the wider crypto industry around the currencies themselves that could also be a worthwhile buy in 2023.
Now they’ve dodged a bullet with the crypto mining tax pushed to one side, Bitcoin miners are continuing their upwards trajectory for the year as they ride the Bitcoin price rally. Marathon Digital Holdings closed 5.49% up on Tuesday, with the stock hitting a massive 177% hike since the start of this year. Riot Platforms has an even better trajectory, climbing over 10% this week and soaring 256% in 2023.
Crypto exchanges are another option, though every investor needs to do careful research beforehand as the SEC has many of these companies in its crosshairs. Coinbase had its stock upgraded by analysts this week which saw the share price rise by 7.5% – though, fair warning, the SEC threatened the company with legal action back in March.
The bottom line
Crypto remains unpredictable and volatile as ever, so every investor looking to get into crypto should do some thorough research beforehand (or let AI help you out with the hard work). Diversifying your options and going for a mix of cryptocurrencies will help you to weather any storms in the crypto market.
But it’s a remarkably resilient market with a strong investment base – once it works out the kinks with regulation, the enterprise client base will certainly give the crypto industry a boost.
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The AI scans through the data to find the top-performing tech stocks and ETFs for the week. It then readjusts your investment in the Kit’s holdings to help you grow your returns and stay one step ahead of the curve to capitalize on buzzy tech announcements.
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