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7 Cryptos to Watch as Blockchain Hits $1 Trillion Again


After several weeks of trading below the all-important $1 trillion level, the market capitalization of all cryptos has finally broken through the barrier to the upside, albeit barely. Still, it’s a landmark mini-event, with blockchain proponents eager for a reversal of Federal Reserve monetary policy. Throughout the past year, the central bank has significantly tightened the money supply, particularly scaring off risky asset classes. But with inflation falling, proponents are hoping for a strategic pivot.

It is not excluded that such a pivot will materialize, which would bode well for cryptos. “Fed tightening appears to be milder and inflation less risky,” Charles Hayter, CEO of crypto data site CryptoCompare, said in comments emailed to CNBC. “There is hope that there will be more caution in pricing upsides globally.”

Nevertheless, investors should exercise caution. During the last major bull cycle, cryptos reached a peak valuation of $545 billion in early 2018. Shortly after, the total market capitalization of the sector dropped to around $140.5 billion at the end of March. In early May, the sector reached a value of around $302 billion, which more than doubled before imploding again. In other words, be careful. Anything and everything can happen with cryptos.

Crypto to watch: Bitcoin (BTC-USD)

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Continuing its remarkable run to the top, Bitcoin (BTC-USD) at the time of this writing sits a hair’s breadth below $23,000. At the start of the year, BTC was trading hands below $17,000. Within weeks, contrarian players ran away with around 35% returns. Now the question is, should they sell or keep digging hoping for even bigger returns?

What is even more amazing about Bitcoin and other cryptos is their resilience. Despite the bankruptcy of the digital asset lender Genesis Global Capital, BTC ignored the downside implications. Instead, the main catalyst underlying virtual currencies is likely centered around Fed policy. If it backtracks on its monetary tightening strategy, BTC could get into the race.

Still, it’s important to keep things in perspective. In February 2018, following an initial Bitcoin price crash, BTC managed to rise around 32% before gradually sliding lower. Therefore, investors need this rally to hold for more than a month. Otherwise, the bears could take a bite out of the resurgence.

Crypto to watch: Ethereum (ETH)

Another stylized version of the Ethereum logo

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Another name among crypto that continues to impress onlookers, Ethereum (ETH-USD) started the year at around $1,200. Right now, ETH is trading at $1,635, which represents a 36% return in less than a month. Even better from a technical analysis perspective, ETH now sits significantly above its 50- and 200-day moving averages.

Basically, Ethereum also succeeded in sweeping the bankruptcy of Genesis Global Capital alongside other major cryptos. Currently, however, all eyes are on Shanghai’s next hard fork. Targeting a March 2023 release, this protocol update will enable Beacon Chain staked ether (ETH) withdrawals, per Coindesk.com. Ethereum developers have also created a “shadow fork” to provide a test environment before the Shanghai upgrade.

While the circumstances bode well for ETH, investors should note that between April and May 2018, Ethereum doubled in value before slipping into blockchain purgatory. Therefore, investors should be careful not to bet too much on this and other cryptos.

Crypto to watch: Tether (USDT)

A conceptual token for the Tether cryptocurrency.

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As a stablecoin, Attached (USDT-USD) does not change in value appreciably, being pegged to the US dollar. In previous years, the arguments for long-term ownership of Tether made sense. With the dollar constantly eroding purchasing power, investors were incentivized to dabble in risky assets like crypto. However, due to the aforementioned change in Fed policy, crypto traders need to think carefully going forward.

For example, year-to-date at the time of writing, Tether has gained 0.048% of its market value. In comparison, the purchasing power of the dollar increased by 0.30% between November and December last year. Therefore, by simply keeping regular old greenbacks, ordinary individuals can get a better return just sitting on cash.

To be fair, holding Tether allows stakeholders to acquire crypto at lightning-fast speeds. However, with the Fed not saying with conviction that it will cut benchmark interest rates, virtual currencies remain a risky proposition. Combined with the implosion of other stablecoins, investors should be cautious about overexposure to USDT.

BNB (BNB)

A Binance coin sits in front of the trading charts.  Binance Price Predictions

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Underlying the Binance virtual currency exchange, BNB (BNB-USD) is thrust into the limelight as competing platforms succumb to bankruptcy. Thankfully, BNB has also taken on the recent controversies, jumping higher alongside other cryptos. Over the previous week, the coin gained more than 7% of its market value. And in the past 24 hours as of this writing, it has gained over 5%.

From a technical analysis perspective, BNB certainly looks encouraging, with the current price rising above its 50 and 200 DMA. At the start of the year, BNB was trading at around $244. As of this writing, it’s close to $322, which is a 32% return.

Although impressive, between March and June 2018, BNB saw a recovery from the correction in January of that year. From a low of around $8 to a high of around $17.27, BNB gained around 116% of its market value. Again, as impressive as this year’s 32% return is, investors need to keep everything in perspective.

Gimbal (ADA)

Cardano (ADA) token with blue and orange digital background.

Source: Stanslavs / Shutterstock

Although other cryptos showed decisively encouraging chart patterns, the rally in the recovery in gimbal (ADA-USD) leaves room for slight concern. Don’t get me wrong, Cardano has been downright impressive. In the January open, ADA traded hands for about a US quarter. At the moment, however, ADA has managed to reach just under 38 cents. Rounding it up, we’re talking about a healthy 52% return – and January isn’t even over yet.

Yet, what might bother some would-be investors is that right now Cardano has failed to break through its 200 DMA. To be sure, it’s close. The 200 DMA is trading at 40 cents while the ADA is trading at 38 cents, leaving a 5% gap and some changes. This is nothing in the crypto world. Nevertheless, it stands out as many other non-stable digital assets have exceeded their 200 DMA.

Moreover, despite Cardano’s stratospheric run, it performed better as a dead cat bounce in 2018. Between April and May of that year, ADA returned 149%. So yeah, it’s great to be excited about cryptos right now. However, keep everything in perspective.

Solana (SOL)

Solana Coin (SOL-USD) in front of the Solana logo.  Solana Price Predictions.

Source: Rcc_Btn / Shutterstock.com

Once called an Ethereum killer for its ability to foster high-speed transactions at a fraction of the costs associated with the ETH network, Solana (SOL-USD) has generated a lot of interest among blockchain developers. Soon, investors strictly looking for the capital gains potential of cryptos jumped on board, sending SOL to the moon.

Unfortunately, Solana was overtaken by the infamous FTX bankruptcy. But Reuters reported that Solana and FTX had little to do with each other, FTX founder Sam Bankman-Fried’s outspoken support for SOL caused the coin to plummet. Still, enjoyed one of the most notable rallies in cryptos this year. Starting at around $10 per piece, the price jumped to almost $25.

While undoubtedly appealing to newcomers to SOL, the digital asset still has a mountain to climb. Long-term support is around $30. Therefore, Solana needs another 20% rally from here. Considering we are talking about crypto, a 20% move is quite reasonable. Still, it’s worth being careful.

Dogecoin (DOGE)

A Golden Dogecoin coin on the keyboard, Meme coins

Source: Zarko Prusac / Shutterstock.com

But Dogecoin (DOGE-USD) carries a somewhat controversial profile due to his irreverent attitude, this renegade attitude also appeals to onlookers. If you consider some of the most popular cryptos, their underlying white papers are aimed at a better economy, a better world, or at the very least, a better blockchain. With Dogecoin, the focus seems to be on community and fun.

It’s not a particularly serious undertaking, but that’s why it’s so refreshing. With Dogecoin, you play. Therefore, whenever you buy DOGE, you know what you’re getting into. No cover exists in the sense of framing your speculation as a means to fight world hunger.

Certainly, DOGE has performed well in the year so far. Starting in January at around 7 cents, DOGE moved to 9 cents, generating a 28% return. Yet, in April 2018, Dogecoin gained 119% before finally plummeting and going sideways. So, it’s normal to be a bit skeptical about the current rally.

As of the date of publication, Josh Enomoto held a LONG position in BTC, ETH, USDT, ADA and DOGE. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto helped negotiate major contracts with Fortune Global 500 companies. Over the past several years, he has provided critical and unique insights to investment markets, as well as various other industries including law, construction management and healthcare.

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Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
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