Cryptos are on everyone’s mind once again after Bitcoin set a new record high, surpassing $72,000. As regulatory clouds clear up, capital is once again pouring into the space.
We are seeing greater regulation and adoption of cryptos worldwide. The European Union is leading the way with MiCAR, which stands for Markets in Crypto-Assets Regulation. However, other established geos like Japan and China are also moving forward with crafting policies for the space, while the United Arab Emirates is quickly emerging as a crypto-friendly hub.
In the midst of all this, Bitcoin, the sector’s bellwether, is having an eventful year. After the approval of 11 spot bitcoin ETFs on Jan. 10, the industry is getting ready for the next halving event, when Bitcoin’s mining reward is split in half. The event will have huge implications for Bitcoin’s price and the industry in general.
With so much excitement in the industry, it is time to explore three cryptos with explosive growth potential. All three are gaining momentum and benefit from solid use cases.
Bitcoin (BTC)
Some might balk at my first pick, but Bitcoin (BTC-USD) will remain the gold standard by which other cryptos are judged. As the primary mover, it decided where the industry goes next, making it impossible to ignore.
Predicting where BTC will go next is hard. Some analysts speculate it will go as high as $100,000, while others forecast a potential pullback to around $60,000. Ark Invest CEO Cathie Wood, as William White points out, believes Bitcoin may reach a $1 million valuation by the end of the decade.
Bitcoin enthusiasts can be grateful to the United States Securities and Exchange Commission for the surge, as the regulator recently gave the go-ahead for several spot Bitcoin exchange-traded products. It sparked the latest rally as Bitcoin gained a level of legitimacy it did not possess previously. The ETFs makes cryptocurrencies a more appealing asset class, particularly with companies like Fidelity and BlackRock involved.
El Salvador and the Central African Republic remain the two countries that officially recognize Bitcoin as legal tender. Nonetheless, countries like Slovenia, Ghana, and Nigeria are extending their use cases for Bitcoin in order to get around conventional financial institutions, protect themselves from inflation, and test out new economic models.
In addition, the Bitcoin halving is coming up, which, if the past is any indication, will drive up Bitcoin’s price. The event ensures BTC remains capped at 21 million. Due to the event’s deflationary nature, Bitcoin typically increases in the aftermath of “the halvening.”
XRP (XRP)
Ripple’s XRP (XRP-USD) is trading at approximately 69 cents, a 9% increase YTD, which is a surprise considering XRP’s pivotal role in facilitating cross-border transactions.
With the digital remittance industry expected to expand at a 5% annual rate, reaching $182 billion by 2028, Ripple’s XRP, known for its cheap costs and fast transactions, is well-positioned to support this growth.
The XRP Ledger, which can do 1.5K transactions per second, is better than Bitcoin and as good as Visa (NYSE:V). It is its unique consensus ledger, which is, unlike Bitcoin, mining-free, which makes cross-border transactions speedy and settlement instantaneous.
Globally, Ripple has been disrupting the banking industry, gaining the acceptance of more than 300 financial institutions. The Santander corridor is a case in point as Ripple takes more and more territory.
It is worth mentioning here that a landmark ruling was made last year that Ripple did not violate federal securities laws by selling XRP on public exchanges. Ripple Labs, the company behind XRP, received a partial victory over the SEC, leading to XRP doubling in a day. However, XRP is now back to trading at pre-verdict levels.
For me, XRP’s value proposition is not linked to the ruling, the case, or their collective future ramifications. Instead, it lies in XRP facilitating the unbanked and underserved around the world. In my eyes, that is where the money is.
Cardano (ADA)
Cardano (ADA-USD) stands apart from cryptos because of its academically sound approach. Peer-reviewed research serves as its foundation. Hence, research rather than emotion is at the heart of Cardano’s development model.
Furthermore, Cardano’s proof-of-stake consensus approach enables an environmentally friendly system. Critics frequently express concern about cryptos’ energy usage, which may occasionally exceed the demands of an entire nation. On the other hand, Cardano’s strategy took a sustainable approach, distinguishing it from an era when ESG investment was gaining popularity, especially among newbie investors.
Shifting gears, let’s discuss development upgrades, which are a prime focus for investors looking for cryptos. The next major upgrade for Cardano is the Chang hard fork, which will give ADA holders a stronger influence on the network’s destiny.
Following this update, the Basho phase will focus on the network’s scalability and performance. The Basho era will see the establishment of sidechains to relieve congestion on the main chain.
With empirical evidence leading the way, Cardano continues to gain traction. In December, the entire value of its DeFi ecosystem exceeded $440 million. Notable agreements, such as the most recent one with the UAE, demonstrate Cardano’s viability among major cryptos.
On the publication date, Faizan Farooque did not have (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.
