In 2023, cryptocurrencies saw remarkable growth, with Bitcoin (BTC-USD) and Ethereum (ETH-USD) surging more than 155% and 90%, respectively. Several top 100 tokens surged up to 9600%, with many of the most prominent layer-1 blockchains seeing impressive upside (and I’ll get to those shortly).

Despite the staggering gains in many top cryptocurrencies, risks abound. We all saw the happenings during the 2022 bear market, and investors have reason to fear another bout of selling pressure in this space. If that takes place, there’s always the potential for lower lows this time around. At least, that’s the fear.

Of course, investors are considering plenty of bullish catalysts on the horizon as well, from an upcoming Bitcoin halving to spot ETFs for other assets and potentially lower interest rates. With that in mind, let’s dive into two cryptos investors may want to look at through a bullish lens, and one I’d classify as a crypto to sell.

Cryptos to Buy: Ethereum (ETH-USD)

Recently, Ethereum has been making some big noise in the crypto realm. Now trading at nearly $3,000 per token, Ethereum has surged to its highest levels since its previous incredible rally to all-time highs. Furthermore, many suggest this momentum could continue, due to a number of key factors.

Chief among these factors is an anticipated approval of spot Ethereum exchange-traded fund (ETF) in the U.S. Such a move should undoubtedly attracting institutional interest to Ethereum. And, I actually think this token could see outsized gains from such an approval relative to Bitcoin.

Major firms like Franklin Templeton, BlackRock, and others applied for ETH ETFs. Bitcoin’s ETF success, accumulating $11 billion, hints at the future potential demand for spot Ethereum ETFs. Unlike Bitcoin, regulated ether products may offer up to 5% yearly rewards. Since Ethereum allows for staking, this could provide an even more compelling thesis for investors to own certain funds.

Additionally, many in the crypto community anticipate Ethereum’s EIP-4844 upgrade will enhance scalability and reduce roll-up gas fees, boosting its market impact. Vitalik Buterin’s gas limit increase initiative and a projected Ethereum spot ETF approval in May by Standard Chartered signals potential growth. Overall, I think Ethereum remains the top crypto investors need to watch closely in the coming weeks.

Solana (SOL-USD)

While December saw a similar build-up to that of Ethereum preceding a 30% drop, Solana’s (SOL-USD) open interest remains a small fraction of its market capitalization, mitigating long-term spot price impacts.

Despite a significant network outage on Feb. 6, Solana’s SOL token surged, surpassing Binance’s token to claim the fourth-largest cryptocurrency spot by market capitalization. Solana’s recent 7.5% rise led this token to surge to nearly $50 in market capitalization, now briefly surpassing Binance’s BNB token this past week.

Investors appear to view Solana is a premier Ethereum alternative, supporting the growth of decentralized finance and unique blockchain-related sectors like NFTs. Importantly, Solana has also been in the news for a recent collaboration with Filecoin (FIL-USD). The two projects are joining forces to make advancements on decentralized storage solutions. This deal could ensure enhanced accessibility and security in this space, and is one worth watching. Also, the partnership will leverage both blockchains and their tokens.

Cryptos to Sell: Shiba Inu (SHIB-USD)

Now that we have two cryptos you should buy, let’s head on and discuss one to avoid. First on the list of many investors has to be Shiba Inu (SHIB-USD).

Unfortunately, this meme token had a relatively disappointing 2023. Shiba Inu’s valuation ended the year right around where it started the year. Given the growth rates of other high-profile projects (such as the two aforementioned tokens), that’s some serious relative underperformance. So, investors are clearly picking up on this trend.

Yes, Shiba Inu’s Shibarium and ShibaDEX expanded its ecosystem, while token burning aimed to stabilize prices. However, these supposed utility-generating features really haven’t made a meaningful impact in their core markets, as many bulls thought they initially would.

Shiba Inu’s popularity, while beneficial to its short-term momentum characteristics, also poses risks. The constant emergence of new meme coins reduces its novelty and market share. Recent successes like Pepecoin highlight the volatile nature of meme coins, potentially overshadowing Shiba Inu. Indeed, Shiba Inu’s popularity is both a strength and a vulnerability in the ever-changing meme coin landscape.

Shiba Inu’s outlook appears bleak without interest rate decreases and a return of risk-on sentiment for all digital assets. I’m not so sure such an environment will be in the cards for 2024. Thus, I’m going to remain on the sidelines when it comes to Shiba Inu.

On the date of publication, Chris MacDonald 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.