Despite the recent (and ultimately short-term) pullback in Bitcoin (BTC-USD) price before the halving event, investors have plenty of top cryptos to buy. Coinciding with this event is that many people should receive a tax refund over the next 30 days. The April 15 deadline to file federal taxes could inject a speculative amount of cash into the burgeoning crypto market.
Bitcoin still has room to run because it was already trading at overbought levels on the longer-term weekly and monthly charts prior to the Israel and Iran escalation and fears of high interest rates longer.
It would take an incredibly bullish backdrop for the Bitcoin rally to continue despite being overbought. That rally would be speculative and possibly unsustainable. A pullback to allow bulls a breather is, ultimately, healthy. We’ll see huge volatility on April 20, which is the halving event’s official kickoff.
For investors wondering where to spend tax refunds in this rally, here are three cryptos to buy.
Smog (SMOG-USD)
Smog (SMOG-USD) has rapidly gained popularity since its launch on the Solana (SOL-USD) blockchain and bridging to Ethereum (ETH-USD). This expansion comes with attractive staking rewards and the promise of significant airdrops to token holders, which helped build a large and active community.
Note that SMOG is classified as a meme coin and, as such, is speculative. However, these meme coins have significant capital appreciation potential. The plans for Smog in 2024 include enhancing its ecosystem through multiple new listings on high-profile exchanges, which could further its liquidity and reach.
Smog has ambitious price targets. Analysts forecast SMOG to reach as high as $0.985, with successful platform developments and broader market conditions driving potential growth.
Smog’s roadmap extends to 2030 with significant goals aimed at increasing its holder base to over 100,000 and solidifying its position in the cryptocurrency market. The broader adoption of blockchain technology will help to reach these goals.
SMOG could then be a speculative play for your tax refund dollars.
Bitcoin (BTC-USD)
Bitcoin remains my top pick this year. I’m bullish on Bitcoin because it’s an asset many consider selling to be an absurd idea. It has properties similar to gold, not just in a limited supply, but over time, it has become uncorrelated to the broader indices such as the S&P 500.
Owning uncorrelated assets is a cornerstone of diversification, so financial advisers and institutions will start recommending it as part of a small allocation in a larger portfolio.
The rise of Bitcoin ETFs and Bitcoin ETFs that pay strong dividends through their futures contracts, such as ProShares Bitcoin Strategy ETF (NYSEARCA:BITO), yielding 49.63% at the time of writing, helps to further the bull case.
It can’t be understated that these ETFs substantially mitigate the bugbear of self-custody and security risks, which make Bitcoin one of the top cryptos to buy.
Furthermore, Bitcoin’s risk-adjusted performance metrics are robust, with a high Sharpe Ratio of 4.13, indicating strong returns compared to its volatility over the past year. This performance places Bitcoin in the top tier of financial assets.
Ethereum (ETH-USD)
Ethereum is another of the top cryptos to buy for investors looking for a solid return from their tax refunds. Despite the market’s volatility, it’s a blue-chip crypto with a bright future.
Due to Bitcoin’s rising energy costs and Ethereum’s recent change to the Proof-of-Stake (PoS) protocol, ETH is somewhat future-proofed against upcoming regulations and crackdowns on the Bitcoin mining industry.
In 2023, Bitcoin mining operations were estimated to use between 120 and 240 terawatt-hours (TWh) of electricity, with a central estimate of 135 TWh. This level of electricity consumption surpasses that of many countries, including Pakistan.
As the halving event reduces profitability per block and the difficulty of Bitcoin mining increases, continually rising energy use is necessary. This draws a question mark around its long-term sustainability.
In terms of innovation and strategic shifts, companies like Grayscale are actively transitioning their Ethereum trust products toward spot ETF. Meanwhile, other financial products under development cater to sophisticated strategies involving Ethereum. This then makes ETH one of those cryptos to buy.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
