The cryptocurrency market remains a central sector investors are watching, given the uncertainty on display in the economy. A series of bank failures have occurred, with the potential for further failures looming. With cryptocurrency exposure implicated in several of those failures, it might seem that identifying cryptos to buy is an unwise decision.
I’m not here to provide my unwavering support for the cryptocurrency sector. However, the signs are clear – stock market volatility is often amplified within the crypto market. Big jumps on Wall Street can lead to bigger jumps in the crypto realm.
Additionally, big drops on Wall Street can also lead to waning confidence in our traditional financial systems. That can be a boon to non-traditional or alternative asset classes, such as crypto.
Indeed, cryptos are risky propositions in the steadiest of times. It’s riskier now. That said, there are reasons to believe that there are a few particular cryptos to buy in March.
Here are three such tokens I’ve got on my watch list right now.
First on this list of cryptos to buy is a rather controversial option, XRP (XRP-USD).
Indeed, XRP’s upside and risk profile are both closely tied to the same key catalyst – ongoing litigation with the Securities and Exchange Commission (SEC) over whether its token constitutes a security.
That lawsuit was leveled by the SEC back in December of 2020. The longer it has gone on, the more favorable Ripple’s defense has become. Indeed, many investors believe that it’s now increasingly likely that the judge will rule in favor of parent company Ripple, and decide it never put forward a securities offering with its initial coin offering for XRP.
A resolution is likely near, with Ripple’s Asia Pacific Policy Director Rahul Advani expecting a decision in the first half of this year. Most believe that a judgment in Ripple’s favor will cause prices to skyrocket. I agree. Even if the judgment isn’t leveled this month, I still think an investment in XRP will continue to hold excellent long-term upside potential.
That’s because Ripple’s technology is integral to the development of Central Bank Digital Currencies (CBDCs) in several countries. That, along with its utility in cross-border remittances, makes it a useful crypto. And utilitarianism within crypto is becoming increasingly important.
There’s a clear investment thesis behind Bitcoin (BTC-USD) amid all the current chaos. Bitcoin remains the leading cryptocurrency in terms of size and importance. Thus, the more confidence wanes in the traditional financial system, the more attractive Bitcoin becomes.
Correlation is not causation, to be sure. But since March 10, when Silicon Valley Bank collapsed, Bitcoin has risen quite dramatically. In fact, it’s gone from around $20k to about $27,000 the time this article was written. That 33% increase isn’t directly attributable to bank collapses, but the correlation is nevertheless clear.
I don’t want to be an alarmist, but there are legitimate reasons to be less-than-inspired about the state of the U.S. financial system. Reports suggest that the Federal Reserve printed an additional $300 billion in the last week. Those reports also suggest that half was used to bail out failing banks. If you believe our current inflation is a product of excessive money printing, and you should, then this bodes poorly for inflation rates. It seems that the weak USD could just continue to get weaker.
If the banking system or U.S. dollar come under any sort of serious threat, Bitcoin could be a key alternative asset class everyone will want to own.
Shiba Inu (SHIB-USD)
Rounding out this list of cryptos to buy is perhaps the most speculative token of all – Shiba Inu (SHIB-USD).
Shiba Inu is a well-known meme token that has seen impressive rallies in the past. However, this token is also a way investors look to play volatility, or momentum-driven rallies in the crypto market.
Given Shiba Inu’s extremely low price, outsized gains can be had with this token, due to a multiplier effect. We’ve seen this play out during the most recent bull market rally, where some investors bagged million-plus-percent gains over the course of less than a year.
That said, is SHIB a worthwhile token to buy? Is this project based on any real utility?
Probably not. Shiba Inu was created to challenge Dogecoin (DOGE-USD), which also lacks utility.
Both cryptocurrencies benefit from irrational exuberance borne out of loose monetary policy and an influx of excess stimulus cash. There was a lot of money floating around at the height of the pandemic, which provided a boon for Shiba Inu and Dogecoin. While monetary policy has tightened substantially, there are hopes that the punch bowl will be re-filled soon. If that’s the case, lottery ticket like bets on meme tokens like Shiba Inu could pick up, making this a speculative bet worth keeping an eye on right now.
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.