Two asset classes that have witnessed a strong reversal in the first quarter of 2023 are gold and Bitcoin (BTC-USD). The rally for the latter has been impressive, with the digital asset surging by 66%. With the positive momentum for cryptocurrencies likely to sustain, it’s a good time to look at some altcoins to buy.
One reason Bitcoin is trending higher is that the global financial system has been feeling the heat. With stress in the banking system coupled with the probability of a recession, a reversal to expansionary monetary policy is likely. This will be bullish for risky asset classes.
Beyond this year, Bitcoin halving is due in 2024. Going by past instances, the halving event is followed by a rally for cryptocurrencies. As Bitcoin trend are higher, altcoins are likely to follow.
Therefore, it’s a good time to accumulate altcoins that have multibagger returns potential.
Let’s talk about three altcoins to buy that look interesting at current levels.
Altcoins to Buy: Ethereum (ETH)
Bitcoin and Ethereum (ETH-USD) are the blue chips for a cryptocurrency portfolio. Ethereum has trended higher by 46% for year-to-date 2023 and has underperformed Bitcoin. However, I believe that Ethereum will be ahead in terms of returns in the next five years.
I firmly believe that the Ethereum merge factor is still to be discounted in the price. The merge is expected to make the blockchain significantly energy efficient. Additionally, reduced processing time and lower transaction fees are the benefits.
Bloomberg Intelligence expects ESG fund assets under management to reach $41 trillion in 2023. The shift to proof-of-stake consensus boosts Ethereum’s ESG credentials. As funds boost their Ethereum holding, the cryptocurrency is likely to trend higher.
Back in 2022, Vitalik Buterin indicated that Ethereum development is 55% complete. Depending on the roadmap implementation for 2023 and 2024, Ethereum is likely to trend higher. However, there is no doubt that the cryptocurrency is undervalued relative to Bitcoin.
I don’t expect Dogecoin (DOGE-USD) to trade near the highs of May 2021. However, I believe that the altcoin is poised for 5x returns in the next cryptocurrency bull market.
Recently, Elon Musk hit back at a $258 billion lawsuit against him for enabling a euphoric rally in Dogecoin. With Musk’s lawyers talking about Dogecoin as “a legitimate cryptocurrency,” the altcoin trended higher.
A big impending catalyst for Dogecoin is payment integration with Twitter. It seems clear from the above statement that Elon continues to strongly back Dogecoin. The integration is, therefore, likely that it will trigger a massive rally.
It’s also worth mentioning that Dogecoin has 4.5 million holders. With the wider adoption of cryptocurrencies, the holding base is likely to swell further. This makes a strong case for Dogecoin to be increasingly used as a payment method for various products and services.
Binance Coin (BNB)
Binance Coin (BNB-USD) is the coin that Binance issues. The latter is among the largest cryptocurrency exchanges in the world. It’s also among the fundamentally strong exchanges that are poised to survive and expand market share in the coming years.
At the beginning of the year, the BNB coin was trading at $246. The coin has trended higher by 27%. I expect this rally to sustain. A key reason is that as the bull market returns for cryptocurrencies, trading volumes will swell. This will benefit Binance.
It’s worth noting that Binance has been active on the acquisition front. In November 2022, Binance acquired Sakura, which is a Japanese crypto exchange. In February, the company acquired a majority stake in a Korean exchange. Binance has already made meaningful inroads in the Middle East.
With global expansion, the cryptocurrency exchange is positioned for healthy growth in the coming years. I am, therefore, bullish on BNB coin at current levels.
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.