I believe the Federal Reserve’s latest rate hike has created an attractive entry point across cryptocurrency. The 25 basis point increase has increased the Fed’s target funds rate to between 5.25% and 5.5%. That has increased overall stress on the economy and, in turn, pulled crypto prices lower.
This is a positive outcome for the simple and obvious reason that everything is momentarily cheaper. However, I also want to note that I believe the crypto market and stock market remain distinct from one another. Yes, they’ve moved in an increasingly correlated fashion over the past few years. However, if continued rate hikes tank the economy, I see a lot of capital moving out of the stock market and into crypto. In any case, let’s look at current opportunities.
Crypto Opportunities: Bitcoin (BTC-USD)
I believe Bitcoin (BTC-USD) is one of the best crypto opportunities. Following the Fed’s latest rate increase, it has plunged below the $30k threshold. It’s a clear opportunity for crypto enthusiasts who have seen the leading cryptocurrency grow quickly in 2023.
For one, it’s difficult to see the price decline as anything more than a knee-jerk reaction on the part of the market. In fact, this most recent hike is the fourth 25-basis point increase in 2023. That should indicate something to investors: Bitcoin has gone from below $17k to as high as $31k amidst that series of hikes. It’s unlikely this most recent hike will subdue prices for any amount of time.
Further, Bitcoin has shown to be capable of providing rapid returns even at the $30k price level. When Ripple recently prevailed in its case against the SEC, prices spiked above $31k very quickly. It remains clear that BTC can break out. BTC will remain volatile, but as time goes on, it becomes more stable, and we’ve seen that it can trade at double the current prices in the past.
Dogecoin (DOGE-USD)
Dogecoin (DOGE-USD) has never been my favorite cryptocurrency. In fact, I’d guess that I’ve been more critical of it than I have been supportive. Its lack of utility has always been an issue for me. I’m certainly not alone in that criticism, and it’s well established that DOGE was created as a joke in the first place.
However, Dogecoin’s lack of utility has nothing to do with its value. That seems like a strange statement to make, but it’s true. Dogecoin’s value lies in its position as an established go-to mechanism for crypto speculation. It’s a tried-and-true investment for speculators who know that DOGE can multiply positive momentum when it occurs in crypto overall.
Beyond that, so-called whales have been amassing substantial positions in Dogecoin that have spiked demand in the past. The article noting this phenomenon also alludes to a past rally in which Dogecoin spiked by more than 23,000%. That’s almost certainly not going to happen again, but it’s entirely reasonable to anticipate that 10% returns over 24 hours are possible.
Cardano (ADA-USD)
Cardano (ADA-USD) makes a great deal of sense to me based on its long-term approach. If any of the more notable non-dominant cryptocurrencies stands a chance in the long run, it’s Cardano. That’s why I think it lays out one of the best crypto opportunities right now.
Cryptocurrency relies heavily on the principles of computer science. That means it’s bound by the laws governing that particular field, themselves rooted in physics and mathematics. Cardano is committed to scientific principles as the guiding force for its development. That means that over the long run, ADA will likely evolve into among the most fundamentally sound projects in the crypto space.
Other projects adopt a go-fast-and-break-things approach that leads to quicker development and returns, sure. However, they run the risk of adopting critical errors that completely invalidate their projects that Cardano doesn’t. And that’s why it remains highly likely that Cardano will evolve into a fundamentally sound project with great staying power.
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.
