Could we be heading towards another crypto crash? Despite double-digit gains in Bitcoin (BTC-USD), following its halving on April 19, the crypto bellwether is down more than 6% this month. Moreover, we’ve seen intense selling pressure from ETF holders, including the largest asset managers at BlackRock and Fidelity. With these developments in play, the savvy investor will want to load up on long-term crypto picks.
Bitcoin ETF holders are selling-off in droves, experiencing a 20% shrinkage since March. This trend accelerated in May when Bitcoin ETFs across the U.S. registered the largest outflow to date, worth $564 million. Nevertheless, despite the selling pressure and some critics labeling Bitcoin as a Ponzi scheme, the overall market retains sizeable holdings in Bitcoin ETFs. Hence BTC and other long-term crypto picks are here to stay, representing the future of finance.
Bitcoin (BTC-USD)
Bitcoin remains a polarizing investment, but the bottom-line is that it’s been the top-performing asset over the last decade. That’s not to say that it’s not prone to extraordinary volatility. However, by any metric, BTC’s risk-adjusted returns have been astonishing, which has made it a no-brainer investment in recent years.
Since the start of the year, BTC jumped an impressive 52%, trumping the S&P 500’s 7.5% gain. If we narrow our view to 6 months, the digital asset has risen 83% despite multiple headwinds weighing down risky investments. The approval of spot Bitcoin ETFs by the Securities and Exchange Commission (SEC) earlier this year was crucial. Following the approval, some of the biggest fishes in the investing space can now directly invest in BTC, easing access to the crypto giant.
Furthermore, the recent Bitcoin halving event has constricted the supply, likely leading to a major demand/supply imbalance. Hence, for those with a long-term horizon in mind, it’s tough to bet against BTC.
Ethereum (ETH-USD)
Far from being in Bitcoin’s shadow, Ethereum (ETH-USD) has carved its own path in the crypto space. Its robust positioning in the blockchain realm is underpinned by its laundry list of use-cases. The Ethereum blockchain is the base for DeFi projects, NFTs, and smart contracts.
Moreover, the blockchain sectors that Ethereum supports are extensive and positioned for rapid long-term expansion. For instance, Fortune Business Insights estimates the smart contract market alone to grow by 24.7% from 2024 to 2032 to a whopping $12.55 billion. Such a lofty growth runway is expected for NFTs, DeFi projects, and other areas where Ethereum plays a foundational role.
Though Bitcoin ruled the roost last year, maverick investor Cathie Wood contends that Ethereum might be preferable. Wood feels that Ethereum’s market-beating potential lies in its ability to enhance utility and foster greater adoption.
Solana (SOL-USD)
Solana (SOL-USD) is often dubbed an “Ethereum killer,” excelling in virtually every area that Ethereum covers but with greater efficiency and effectiveness. Its rapid transaction capabilities continue to turn heads in the developer community while significantly lowering costs, making it a remarkably popular choice.
These unique competencies have enabled Solana to effectively carve out a major share in bustling sectors like NFTs and decentralized finance. Additionally, with network congestion continuing to challenge Ethereum, Solana’s streamlined and cost-effective framework positions it for superb long-term growth.
SOL has not just outperformed, but surpassed both BTC and ETH over the past six months, delivering a staggering gain of 251%. Despite market fluctuations, SOL’s price has seen incredible upward momentum on the back of a series of positive developments, including the upcoming cross-chain bridge between Solana and Bitcoin by the Zeus Network. It’s set for release later this year and could further strengthen the optimistic outlook for SOL.
On the date of publication, Muslim Farooque 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.
