Amid this resurgent cryptocurrency market, it's natural for investors to eye the significant gains that seemingly only cryptocurrencies can deliver. But with thousands of crypto options available, identifying the standout opportunities among that crowded field can be a daunting task.
In my view, three cryptocurrencies have emerged as particularly compelling choices for investors looking to capitalize on the market's upward momentum in April.
1. Bitcoin
What more needs to be said about Bitcoin (CRYPTO: BTC)? It is the most valuable, most secure, most reliable, most proven cryptocurrency on the market. Thanks to the launch of new spot Bitcoin exchange-traded funds (ETFs) in January, it is also the only cryptocurrency that Wall Street has direct access to, which gives it an added edge.
As the de facto leader of crypto, Bitcoin is positioned favorably to benefit as adoption of the asset class continues. But better yet, in the short term, Bitcoin is about to undergo its fourth halving.
Roughly every four years, the amount of Bitcoins miners receive for validating transaction blocks is cut in half. This has the effect of halving its supply growth rate, and these reductions have historically been major catalysts for Bitcoin price appreciation. Because each halving alters the dynamics between supply and demand, even if demand remains constant, the price theoretically should increase. In the years that a halving has occurred, Bitcoin has gained an average of about 125%. Better yet, in the years that followed a halving, Bitcoin's average return was a whopping 400%.
2. Ethereum
While Bitcoin leads the broader crypto market, Ethereum (CRYPTO: ETH) has become the leader of a sector within that market known as decentralized finance, or DeFi. When in 2015 it became the first blockchain to introduce smart contracts, Ethereum changed the game, allowing developers to program blockchain-based applications.
Smart contracts form the foundation of many common use cases in DeFi today such as non-fungible tokens, lending protocols, and even functions in gaming. While the number of smart contract-capable blockchains has grown, Ethereum still holds a firm grasp over the DeFi economy. Today, roughly 57% of the $100 billion in total value locked in DeFi calls Ethereum home, making it the perfect proxy to give your portfolio some exposure to this burgeoning sector.
3. Coinbase
Yes, I know, Coinbase (NASDAQ: COIN) isn't a cryptocurrency. But since its initial public offering in 2021, it has risen to become the premier crypto company. After spending the greater part of the crypto winter building out its offerings, it now boasts a resilient and innovative crypto-centric business model that makes it a timely short-term investment and also gives it serious long-term potential.
With subscription plans, staking rewards, stablecoin interest, international derivative exchanges, and even its very own blockchain, Coinbase offers investors a simple and straightforward strategy to gain exposure to the bulk of crypto without having to try and pick winners from among the thousands of coins and tokens on the market.
This transformation is what landed it on this list. At its current share price of about $240, Coinbase barely resembles the company it was when its stock was trading near its all-time high in late 2021. If this coming bull market is anything like the last, Coinbase should see its stock soar to new highs.
As crypto continues its proliferation into finance, Coinbase is solidifying itself as the go-to option for both institutional and retail investors looking to explore the world of crypto. That makes it an ideal option for long-term growth investors seeking to ride the burgeoning momentum of the asset class.
Should you invest $1,000 in Bitcoin right now?
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RJ Fulton has positions in Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has a disclosure policy.
