This year couldn’t be more bullish for the crypto market, which has led to this series of crypto predictions to help investors make the most informed choices.
Not only are interest rates predicted to fall, but also upcoming ETFs are speculated to be approved for some of the leading cryptocurrencies.
As the investment landscape improves, investors’ risk appetites will return. This will mean that one could enhance their overall (as well as risk-adjusted) returns by investing in these assets.
So, let’s now dive into the three crypto predictions to help investors make sense of the market.
Bitcoin (BTC)
The much-anticipated Bitcoin (BTC-USD) halving event later this year is all but guaranteed. Because there won’t be another Bitcoin, its maximalists will tell you there’s no need to use any other network either.
Amongst the most passionate and knowledgable, Bitcoin is held as the one true cryptocurrency. The rest are derided as failed projects or outright scams. This perspective has some merit. Blockchain technology inherently doesn’t contain its oft-advertised benefits of decentralization, security, or immutability.
An observant investor has seen countless hacks of protocols claiming to be secure but then led to the widespread financial ruin of its user base. User error, backdoors, coding mistakes, and social engineering attempts can all undermine the security of other networks. But not so for Bitcoin. It’s scrutinized by hundreds of independent developers, security experts, and cryptographers. Also, decisions can only be made via a unified consensus by those who move the network.
In essence, Bitcoin is the blue-chip choice for investors who want to own a highly stable and robust cryptocurrency. Further, current crypto predictions suggest that it could reach as high as $1 million per coin if the stars align.
Ethereum (ETH)
Ethereum (ETH-USD) is another blue-chip cryptocurrency choice. Analyst crypto predictions for ETH are also optimistic, with some suggesting it could hit $5,000.
Notably, investors should be wary of fortune tellers and also take crypto predictions with a grain of salt. Unlike the stock market, often debated to act somewhat rationally and therefore efficiently, the crypto market behaves much differently.
Far more information asymmetry with crypto exists than with stocks. (Bitcoin doesn’t need to publish financial disclosures or reports). So, people are more likely to act on the behavioral biases of fear, FOMO, and speculation than making educated assumptions.
Despite the inherent speculation of crypto predictions with ETH, the asset could surge in value, following a “positive development” in the establishment of an Ethereum ETF.
Like with a Bitcoin ETF, those who operate an Ethereum ETF could indirectly push up the price of the asset. This may happen since they may be required to hold a large amount, if not a precisely 1:1 ratio of Ethereum to its assets under management.
Also, we could see exotic ETFs if these crypto ETFs were included, such as leveraged, inverse, or volatility ETFs.
Binance Coin (BNB)
Despite the controversy surrounding Binance and Binance Coin (BNB-USD), it could still be a solid altcoin to hold.
Binance has shown some surprising resilience in the face of criminal lawsuits of its founders, China’s crypto crackdown, and more headwinds. Additionally, it’s maintained its position as the world’s largest cryptocurrency exchange by trading volume with an enormous margin.
BNB holds strong utility in the Binance ecosystem. It is used to offer discounts on trading fees, and also lets investors participate in token sales on Binance Launchpad. And, the company can be staked or used in various yield farming and liquidity mining programs within the Binance ecosystem, allowing holders to earn rewards or interest.
Due to the continued dominance of Binance and the strong use-case of BNB, this coin may continue rising in the future. Hence, it may be a key beneficiary of this year’s crypto bull market.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.