Bitcoin's (BTC 0.34%) halving, which occurred on April 19, was one of the biggest catalysts for the cryptocurrency market this year. That closely watched event, which halves the rewards for mining Bitcoin every four years, was widely expected to tighten the top cryptocurrency's supply and stabilize its market price.
Along with the halving, the approvals of Bitcoin's first spot price ETFs and hopes for lower interest rates all brought back the bulls and boosted its price by more than 140% over the past 12 months. I personally believe Bitcoin still has plenty of room to run, but investors should also consider investing in three other promising cryptocurrencies -- Ether (ETH 1.42%), Solana (SOL 0.32%), and XRP (XRP 0.27%) -- as the crypto winter finally ends.
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1. Ether
Ether, the native cryptocurrency of the open source Ethereum network, differs from Bitcoin in two ways. First, it switched from the energy-intensive proof of work (PoW) mining method (used by Bitcoin) to the more energy-efficient proof of stake (PoS) system for transaction validation in Sept. 2022. That "Merge" reduced the Ethereum network's total mining energy consumption by 99.95%.
Second, Ethereum's blockchain can be used for the development of decentralized apps (dApps), non-fungible tokens (NFTs), smaller cryptocurrencies, and other crypto assets. That flexibility makes it more appealing to developers than Bitcoin's blockchain, which can only be used to mine more Bitcoin.
The bulls believe the Ethereum network will continue to expand as developers create more dApps and tokens, and that some of those applications will disrupt traditional financial institutions. As that ecosystem matures, the value of Ether -- which is already the world's second-largest cryptocurrency -- will stabilize and continue to rise.
Several firms, including Ark Invest and VanEck, are also pressing regulators to approve their spot price Ether ETFs. If that effort succeeds, Ether's price could rally even higher.
2. Solana
Ethereum's main competitor is Solana, which also operates an open-source blockchain for the development of decentralized apps and tokens. It uses the same PoS process as Ethereum, but it accelerates the process with its own proof-of-history (PoH) method. That key difference enables Solana to process transactions at a much faster rate than Ethereum.
Solana suffered two major setbacks in 2021 and 2022. First, the explosive growth of the NFT market caused severe congestion and security issues across its network. Second, the cryptocurrency exchange FTX -- one of Solana's biggest backers -- went bankrupt and started liquidating its tokens to raise fresh cash for its creditors.
However, Solana's price eventually stabilized and recovered as it upgraded its network and weathered FTX's massive sales. Its blockchain is still being used to produce popular meme coins like BONK (BONK -3.67%) and WIF (WIF -0.70%), as well as decentralized exchanges like Jupiter and Orca. It rolled out Solana Pay, which was integrated into Shopify last year, to reach more mainstream users. It also settled more stablecoin transactions for Visa and Circle.
All of those developments indicate that Solana, which is now one of the world's five most valuable cryptocurrencies, still has plenty of room to grow as the crypto market warms up again.
3. XRP
XRP is the native cryptocurrency of the Ripple payment protocol network, which was launched in 2012. Ripple instantly settles real-time gross payments, remittance payments, and currency exchange transactions with low fees and no chargebacks, typically transferring money across international borders. Financial institutions like Travelex Bank, Tranglo, and Sentbe subsequently tethered themselves to Ripple's payment network, but its XRP tokens haven't been as widely accepted for payments as Bitcoin or Ether.
For now, XRP's biggest challenge is a U.S. Securities and Exchange (SEC) lawsuit that was launched in late 2020 in response to Ripple's offering of $1.3 billion in XRP tokens. The SEC argues that offering consituted an illegal sale of unregistered securities. The final phase of that trial started this April and will likely drag on for at least a few more months.
Ripple seems to be winning that battle so far. Last July, a judge ruled that XRP tokens weren't actually unregistered securities, and the SEC dropped its separate lawsuits against two of Ripple's executives. If Ripple finally scores a decisive victory against the SEC, XRP's price -- which is trading nearly 90% below its all-time high -- should head much higher.
