3 No-Brainer Cryptos to Buy Before the End of 2023 | The Motley Fool (2024)

With the crypto market showing signs of heating up once again, it's time to look for high-upside cryptocurrencies with the potential to skyrocket even higher. The focus here should be on cryptos with solid, long-term growth prospects that can be added to a diversified buy-and-hold portfolio.

With that in mind, I've picked out three no-brainer cryptos to buy before the end of the year: Bitcoin (BTC 3.84%), Solana (SOL 2.52%), and XRP (XRP 1.28%). Let's take a closer look at each.

Bitcoin

Bitcoin has been on a steady march upward throughout the year, but only recently has it really taken off. For the year, Bitcoin is now up more than 160%. Moreover, Bitcoin is currently trading near an 18-month high of $44,000, and just about everyone now expects Bitcoin to climb even higher in 2024.

What's most attractive about Bitcoin is that it has a very important catalyst in place for next year, and that's the arrival of the first-ever spot Bitcoin exchange-traded fund (ETF) for the U.S. market. The current consensus is that final SEC approval will come in early 2024. Once the first ETF is approved, it could open the floodgates for institutional investors to move their money into Bitcoin, and that is likely to have a huge effect on Bitcoin's price.

The long-term picture for Bitcoin is even brighter. Due to Bitcoin's increasingly important role in the global financial system, adoption of Bitcoin is now at an all-time high. Cathie Wood of Ark Invest has calculated that there are at least eight different areas where Bitcoin is gaining traction globally. For example, Bitcoin is increasingly viewed as an alternative to gold as a safe store of value. As global adoption of Bitcoin grows over time, investors can expect the price of Bitcoin to rise as well.

Solana

Solana, up 545% for the year, has been one of the best-performing cryptocurrencies in 2023. Solana also just hit an 18-month high, and analysts continue to ratchet up their price predictions for Solana. Currently trading around $64, Solana has the potential to retrace its path back to its all-time high of $260 from November 2021.

In order to understand the long-term appeal of Solana, all you have to know is that Solana is the top competitor to Ethereum (ETH 3.49%). Both Solana and Ethereum are Layer 1 blockchain networks. What this means in practical terms is that they are the fundamental building blocks for everything that takes place in the blockchain world, from non-fungible tokens (NFTs) to decentralized finance (DeFi). This is what makes them so valuable.

By estimating Solana's future market share in several key blockchain niches, it's possible to arrive at an estimate of Solana's future valuation. According to investment firm VanEck, Solana only has to achieve a 30% market share in three key blockchain niches in order to be worth more than $3,200 by the year 2030.

XRP

Finally, there's XRP, which is up 87% for the year. While XRP's performance this year doesn't jump off the page the way Bitcoin's or Solana's performance does, it could end up being a bigger winner over the long haul.

XRP is currently trading under the $1 mark due to one primary reason: An ongoing court battle with the SEC that has now lasted three years. The case has been a huge drag on XRP financially. It has also significantly slowed down the pace of development of XRP's blockchain ecosystem, which is based around the Ripple payment network. Ripple Labs (the company behind the XRP token and the Ripple payment network) now estimates that the total cost to fight the SEC could end up being more than $200 million.

So the reason for buying XRP before the end of the year is simple: If XRP emerges victorious in its SEC court battle in 2024, its value could fly off the charts. We've already had a taste of that this summer, when the value of XRP nearly doubled overnight after a major court battle victory. Some analysts are now projecting that XRP could soar to $10. Once all the regulatory uncertainty around XRP lifts, it can get back to building out the Ripple payment network.

Keep your expectations in check

While all three of these cryptos have potentially explosive upside potential, just remember to keep your expectations in check. At the beginning of the year, just about everyone expected the continuation of crypto winter and the steady erosion of value in the crypto market. Instead, exactly the opposite happened. So what if the same thing happens in 2024? The market might zig when you expect it to zag.

For that reason, I wouldn't go all-in on any of these cryptos. You should always be looking to diversify as much as possible. As long as you focus on the long-term outlook, getting in early on these three cryptos could turn out to be a very profitable investment strategy.