The market on cryptos has seen its share of positives and negatives in 2023. On the positive side, it’s undeniable that the market grew quickly between the beginning of the year and only cooled recently. That’s why we’re talking about a rally. The market capitalization of the cryptocurrency market has fallen since July. Investors are seeking any indication that a turnaround rally is in order. I can’t accurately predict that nor can anyone else.
However, there are some encouraging catalysts to consider. A lot of it has to do with the regulatory landscape and the SEC’s upcoming decisions. Because of that, even if September does prove to be difficult the long-term outlook remains positive.
Bitcoin (BTC-USD)
Bitcoin (BTC-USD) has a lot of potential in September. While the month hasn’t historically been especially kind to Bitcoin there’s reason to believe that could change. The most promising catalyst is the expectation that Bitcoin ETFs are likely to be approved this year.
Demand for Bitcoin ETFs is nothing new. Companies have continued to submit proposals for such ETFs only to be subsequently denied. However, the tide has slowly been turning in favor of approval. Court rulings that favored denials are being challenged and the SEC’s decisions, duly scrutinized. Further, BlackRock submitted a Bitcoin ETF proposal this summer which was unexpected. BlackRock has a very strong track record when submitting ETF proposals that bode very positively for its chances and those of the emerging asset class overall.
Make no mistake about it: Bitcoin ETFs will do a lot to legitimize cryptos overall. SEC approval will move crypto that much closer to the mainstream and improve its perception. Liquidity will increase. The trust factor that an established player like BlackRock lends to Bitcoin shouldn’t be underestimated.
Dogecoin (DOGE-USD)
Dogecoin (DOGE-USD) remains one of the leading meme cryptos and the leading speculative investment in the crypto space. It is the granddaddy of a crypto class that has been much maligned for costing some investors dearly. However, it’s also the best at what it does and the meme coin with the most long-term potential. In other words, Dogecoin has the best chance of any non-utility crypto to win long-term.
The research leads to the same conclusion: Dogecoin is the most profitable of the meme coins. Other meme coins may produce greater returns at the individual level, but an investment in Dogecoin provides the greatest chance of achieving returns overall.
Further, should the stock market dip in September as it historically does, investors may flock into crypto. That relationship isn’t clear yet but there is some correlation between the two. Thus, Dogecoin is the best of the speculative plays for September and the most likely of the meme coins to provide returns for non-whale investors.
Cardano (ADA-USD)
Cardano (ADA-USD) is too good an option in cryptos to stay weak forever. It remains the most technically sound of all crypto projects. I’m referring to the fact that Cardano’s development is guided by research and not trends. It’s playing the long game and relies on evidence-based decision making to guide that development. Thus, it’s highly likely that Cardano will provide value in the long term.
Cardano may or may not lift off in September. So-called crypto whales dumped more than 1 billion ADA tokens from their wallets recently. That’s obviously not great for its immediate prospects since it theoretically drives demand downward. In practice, however, ADA prices haven’t suffered much.
My hope is that the market recognizes the value of Cardano’s vision while also noting that whales are simply influential traders. They’re out to make money by bullying markets with vast sums of capital and the leverage it exerts. A nice position to be in so I don’t necessarily begrudge them for doing what they do. However, they aren’t particularly concerned with the long-term narrative of Cardano and maybe that’s what the price response indicates.
On the date of publication, Alex Sirois did not have (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.
