This year has being challenging for the world of cryptocurrencies. That’s perhaps an understatement. The vulnerability of several crypto projects to hacks and scams has been exposed. A strong dollar has also translated into a deep correction for this high-beta asset class. Of course, amidst the carnage, there are many crypto believers that continue to accumulate some no-brainer cryptos.
Despite all the recent doom and gloom in this space, there finally seems to be some good news. Inflation has eased on a relative basis in the U.S., and the dollar is likely to weaken. Equities have surged on this news, as these developments will be positive catalysts for cryptocurrencies.
Undoubtedly, many uncertainties persist related to the global economy, geopolitical tensions, and regulatory headwinds. However, the best time to buy is when there is blood in the streets. I would recommend holding a few no-brainer cryptos for the next few years. These top tokens provide potential multi-bagger returns when the next bull market begins.
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For any investor bullish on cryptocurrencies, Bitcoin (BTC-USD) can be compared to a blue-chip stock. Recently, the world’s most valuable digital asset plunged to lows of $15,700. However, with some negative correction in the dollar, Bitcoin has trended higher to $17,000.
It’s worth noting that the next Bitcoin halving is due in the first half of 2024. Historically-speaking, the cryptocurrency has surged after halving events. That’s a key catalyst for investors looking for more stable tokens with near-term upside potential.
Another positive catlayst that could drive the value of Bitcoin higher is increasing institutional adoption, despite Bitcoin’s relatively weak price action of late. It appears strong hands are accumulating this token at lower levels, with a big reversal potentially in the cards. Bitcoin’s limited supply is another key factor bulls continue to hang onto.
Finally, retail adoption of Bitcoin has also been steadily increasing. A key indicator investors are watching is adoption among major global companies who have started accepting Bitcoin as a payment method. With these positives, I remain bullish on Bitcoin for the long term.
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Had it not been for Elon Musk, Dogecoin (DOGE-USD) might still be a token mired in obscurity. The Tesla (NASDAQ:TSLA) CEO backed the coin as the “people’s crypto,” and subsequent tweets in favor of Bitcoin have triggered massive rallies in the past.
With Elon Musk taking control of Twitter, Dogecoin has surged by 47% in the last month. This rally is clearly drive by speculation that Musk will make Dogecoin a part of Twitter’s payment system. Of course, at eight cents, Dogecoin is still more than 88% below its all-time high.
That said, if Elon continues to back Dogecoin, I would not be surprised if multi-bagger returns are seen in this token’s next rally.
It’s also worth noting that Dogecoin has strong community backing. Currently, the crypto has 4.4 million holders with the top 50 holders owning 63.83% of the total DOGE supply. Dogecoin is therefore in strong hands, and even with this token’s inflationary status, tight supply could drive future risk-on rallies.
Overall, Dogecoin looks oversold. As this token garners wider acceptance as a mode of payment, I expect Dogecoin to deliver 200% to 300% returns in the next few years.
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It makes sense to be invested in large projects rather than speculative crypto projects. This is particularly true when market sentiment is as bearish as it has been of late.
Ethereum (ETH-USD) has been in the news in a big way, with its shift to proof-of-stake via its Merge event. Investors expected a big upward move in price following the Merge. However, Ethereum has remained subdued, trading relatively in-sync with the broader crypto market.
That said, I think this price action provides investors with a good accumulation opportunity for Ethereum. Developments will continue on this blockchain, with Vitalik Buterin focused on curtailing the threats of centralization in 2023.
Additionally, the network’s Shanghai upgrade is expected to come in 2023, and will be the first major upgrade after the merge. In July 2022, Vitalik noted that Ethereum development will be 55% complete after the merge. Therefore, there are positives to look forward to in the coming quarters.
One risk is that developments related to Ethereum’s road map have always been behind schedule. However, even after discounting this factor, Ethereum seems undervalued and is poised for multi-bagger returns in the next big rally.
On the date of publication, Faisal Humayun did not hold (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.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.