Crypto tokens are back on everyone’s mind this year after Bitcoin (BTC-USD) hit a record high above $72,000. Ethereum (ETH-USD) is likewise soaring, and, for the first time since 2021, hit $4,000 before losing ground.
Crypto company Galaxy Digital believes the positive momentum we are seeing will continue. Meanwhile, Coinbase (NASDAQ:COIN) is seeing a boost in trading volumes on the back of strong all-round performance across several coins.
In addition, more and more countries continue to opt for crypto tokens to hedge against local currency devaluation. Vietnam and the Philippines are notable examples of countries that are leading the charge.
These factors combine to create a bullish sentiment around crypto tokens. Meme coins and altcoins continue to offer astronomical gains, which can entice newbie investors.
However, it is best to go with tried-and-tested performers in volatile markets. These crypto cornerstones are coins and tokens that have stood the test of time. They have solid use cases and will continue to lead the charge because of their unique functionality.
Bitcoin (BTC-USD)
Bitcoin briefly rose above $72,000 on Monday before pulling back. Excitement is swirling as the leading cryptocurrency takes out new highs.
Year to date, the coin is up 62%, easily outpacing the returns of other asset classes. The biggest factor influencing these returns is the optimism surrounding the approval of spot Bitcoin ETFs. Regulators, cautious in the past, approved 11 spot Bitcoin ETFs in January, marking a huge shift in their stance toward Bitcoin and the wider crypto world.
While Bitcoin has come to serve as “digital gold,” it still faces obstacles, so adoption is still slow despite its many advantages. The spot bitcoin ETFs’ approval gives BTC an air of legitimacy that it lacked otherwise.
In addition, we are also approaching the Bitcoin halving event projected for April 2024. When the cryptocurrency’s mining reward is divided in half, the creation and distribution of new Bitcoins in the market is slowed. This occurrence has frequently caused the value of Bitcoin to increase in the past. As a result, watch out for it in April.
Ethereum (ETH-USD)
Ethereum’s performance this year also mirrors Bitcoin’s success. Its native coin is bouncing back from a low of $1,460 in the past year to surpass $4,000, reflecting broader market sentiment.
Ethereum’s substantial market capitalization of $477 billion positions it as the second-biggest crypto after Bitcoin. However, these assets serve different purposes. Hence, crypto investors will gain from diversifying their portfolios by allocating capital to both.
Bitcoin is mainly used as an alternate store of value like think gold. The focus is on decentralization and hedging against local currency devaluation. Meanwhile, Ethereum is a platform for developers and users to create dApps, smart contracts, and NFTs.
Ethereum also has unique catalysts. Most notably, the Merge, an upgrade that slashed Ethereum’s energy consumption, making the network eco-friendlier. This tackled a key criticism faced by blockchain technologies — their carbon footprint.
In addition, Ethereum’s Dencun upgrade, scheduled for March 13, will boost its appeal. The upgrade will introduce proto-danksharding, also known as EIP-4844. It will slash Ethereum’s costs for users of layer-2 networks. It’s not uncommon for upgrades like Dencun to lead to a rise in coin and token prices.
BNB (BNB)
BNB (BNB-USD), the native coin of Binance, the largest cryptocurrency exchange in the world, rounds off this list. Even though the exchange is dealing with regulatory issues, BNB is still rising steadily. In 2024, it is up 73% and shows no indications of stopping.
The Binance ecosystem, especially in the DeFi industry, relies on the BNB cryptocurrency. Additionally, regular coin burning, which lowers its quantity, contributes to BNB’s deflationary tokenomics.
The development and integration of new projects, such as adding Aave (AAVE-USD) to the BNB Chain, further increases the ecosystem’s attractiveness.
On a final note, despite Binance exiting several locations, such as Nigeria and Russia, it is also expanding in Georgia, Thailand, and Indonesia, among others. For every location it is exiting, Binance is looking at several other crypto-friendly hubs to which it can relocate. There is no shortage of countries around the world with unbanked or underbanked citizens. It ensures that Binance will continue expanding, boosting the appeal of BNB among cryptos as well.
On the publication date, Faizan Farooque did not have (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.