Which Crypto Should You Invest In Ahead of Bitcoin Halving?
Written by
Yaël Bizouati-Kennedy
Edited by
Chris Cluff
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The crypto ecosystem is gearing up for the so-called Bitcoin halving, which is scheduled to occur around April 20. The halving, which happens every four years, is expected to push the price of Bitcoin even higher; historically, these have led to price appreciation, and experts said this year should be no exception.
But whether Bitcoin’s rise and the hype around the halving will translate into a sustained surge for smaller coins remains to be seen, experts said.
Bitcoin passed its previous all-time high of $69,044.77 last month. Although the asset is now experiencing huge volatility ahead of the halving, many experts anticipate it to reach $100,000 this year.
As of April 8, Bitcoin was hovering around $72,000, up a whopping 156% in the past year.
Meanwhile, some altcoins also have benefited from Bitcoin’s recent resurgence — mostly due to the approval by the Securities and Exchange Commission (SEC) of spot Bitcoin exchange-traded funds, which has attracted enormous interest and has given institutional recognition to the asset.
Bitcoin ETFs and Meme Coins
As of March 1, the 10 spot Bitcoin ETFs in the U.S. had more than $48 billion in assets under management, according to Digital Asset Research.
As an April 4 Messari report noted, the approval of Bitcoin ETFs has propelled BTC back to unprecedented levels, “igniting a meme coin resurgence that has outperformed many sectors.”
“This revival shines a light on both legacy tokens like DOGE and SHIB, which have seen gains over 100%, and newer tokens like PEPE and WIF, soaring over 600%,” according to the report. “With most meme tokens trading strictly on chain, data analytics is crucial for spotting trends and momentum, helping investors differentiate between tokens with lasting potential and those destined for fleeting popularity.”
Yet, many experts argued that as the halving is inherent to Bitcoin, its impact pre-event on other digital assets might not be notable.
Stick to the Basics
“I believe in keeping things simple and staying within your circle of competence,” said Vijay Marolia, co-founder of The Cash Square. “Therefore, I recommend Bitcoin and Ethereum.”
Marolia said this is where institutional demand is going to grow the fastest, but it’s also where the most liquidity lies.
“For long-term investors,” he said, “the stars seem to be lining up and I would buy on dips. I think people that are buying meme coins with no constraints on supply are gambling more than investing.”
Other experts echoed the sentiment, arguing that Bitcoin will be the only crypto directly affected by the halving.
“Any other cryptos that also rise during this period are due to correlation and not because of any fundamental changes in their ecosystem,” said Peter Eberle, president and chief investment officer of Castle Funds. “If you want to speculate on higher prices due to the having the only true option is buying Bitcoin.”
Pay Attention to Post-Halving Movement
Now, prices of altcoins might see more movement post-halving. As Brian Dixon, CEO of Off The Chain Capital, explained, it is difficult to target specific digital assets that may benefit directly as a result of the Bitcoin halving, because the halving is specific to the Bitcoin protocol.
“However, in past cycles, the digital asset markets at large have generally had strong performance in the 12- to 18-month post-halving window,” he said.
According to him, one factor driving this phenomenon is that as holders of Bitcoin may see appreciation of their holdings, they may start trading into other digital assets with their profits, thereby driving performance in altcoins.
In addition, Dixon said Bitcoin newbies may see the value of their holdings increase, making the people curious about other digital assets.
However, he strongly urged investors to educate themselves on important sectors of the digital asset markets, such as smart contracting, which is an important sector that is quickly growing and evolving with interesting use cases.
“The Ethereum protocol is the most well-known for this purpose,” said Dixon, noting, however, that Ethereum is losing market share to competitive protocols such as Solana and Binance Smart Chain because they are cheaper, faster and more efficient.
“The increase in applications and developer activity on Solana and BSC shows that Ethereum is far from the long-term winner in this space,” he added, “and they are working to drive adoption on their protocols.”
When it comes to meme coins, Dixon encourages people “to steer clear away from these as they are speculative with no true utility beyond hype and brand attraction.”
“I look at this sector similar to Initial Coin Offerings (ICOs) in the 2016-17 crypto bull cycle or the hype around NFTs in the 2020-21 bull cycle,” he said. “They were very popular at the time and then these sectors collapsed leaving a lot of people holding the bag with no value.
“The meme coin craze to me signals all of the same characteristics of this. There may be a small few who get lucky at the right time; but, in my opinion, most will not be so fortunate.”
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