If you only read the front pages of the financial headlines, you might get the impression that 2023's most exciting story was the rise of generative artificial intelligence (AI). However, digital asset enthusiasts have every right to view cryptocurrency's breathtaking comeback from the previous year's crypto winter as the year's top investment story.
Anticipating follow-through in 2024, investors might choose to diversify their holdings across multiple cryptocurrencies instead of putting all their chips on one coin. As always, be sure to temper your hand-over-fist enthusiasm with proper position sizing, as volatility and large declines are the norm in the crypto-sphere.
Bitcoin: Start with the obvious choice
You know the old saying: A rising tide lifts all boats. In the world of stocks, the tide that does the lifting is the S&P 500; in the crypto realm, it's Bitcoin (BTC -2.36%).
No cryptocurrency is really safe to invest in like the S&P 500 is. Yet, Bitcoin is probably the safest digital asset to buy in 2024. After all, Bitcoin has the biggest market cap of all cryptos, as well as the widest adoption and name recognition.
Furthermore, the loudest buzz in the crypto-verse lately is the possible Securities and Exchange Commission approval of a spot Bitcoin exchange-traded fund (ETF). The speculation on Wall Street is that the SEC will give the green light for a spot Bitcoin ETF by Jan. 10.
But there's no point in getting hung up on specific dates. Whether a spot Bitcoin ETF gets approved in January or not, it's anticipated to happen reasonably soon, and this will make it easier for retirement accounts and various funds to invest indirectly in Bitcoin. Hence, instead of trying to guess the timing of this monumental event, investors can simply position themselves in advance with a reasonably sized stake in Bitcoin.
Shiba Inu: A community with a burning desire
Thanks to Bitcoin's ascendance in 2023, meme coins are back with a vengeance, and formerly mocked tokens are now getting the recognition they deserve. If you'd like to diversify your Bitcoin holdings with an ultra-cheap but surprisingly popular digital asset, consider Shiba Inu (SHIB -4.26%).
One analogy is that Shiba Inu is like silver to Bitcoin's gold -- if Bitcoin rallies, Shiba Inu will almost certainly soar.
Don't get caught up in the debate over when Shiba Inu's price will reach a full penny (it now trades for about $0.000009). Instead, just take it one step at a time and enjoy the vibrant Shiba Inu community, which is highly active on X (formerly known as Twitter).
And don't be surprised if you see this community talking about deliberately burning or destroying Shiba Inu tokens. Some Shiba Inu holders proudly burn their tokens to reduce the enormous available supply and thereby potentially put a floor on the price. Consider it a constructive and destructive act at the same time.
Ethereum: The yang to Bitcoin's yin
If a spot Bitcoin ETF gets approved sooner or later, which cryptocurrency would be next in line for an SEC-approved ETF? A meme token like Shiba Inu would be a fun pick, but the most obvious choice would be Ethereum (ETH -0.33%), the second-biggest crypto by market cap.
JPMorgan Chase analysts expect Ethereum to outperform Bitcoin this year, citing esoterica like "the forthcoming EIP-4844 upgrade or Protodanksharding" (explained by one source as "a proposal to reduce transaction costs and boost the number of transactions per second"). Yet it's not necessary to delve into the arcane to take a bullish position on Ethereum in 2024.
Rather, one can simply consider that Ethereum has utility because some altcoins are built upon an Ethereum's foundation or layer. Again, a silver-to-Bitcoin's-gold analogy comes to mind, since silver is considered the more useful metal due to its wider industrial applications.
Another yin-yang dynamic applies because Bitcoin outperforms Ethereum some years, but the opposite occurs during other. It's impossible to predict which token will post bigger returns in 2024, but since Bitcoin outperformed Ethereum last year, the latter may be due to play catch-up this year.
All of this remains to be seen, of course. No matter how it plays out, though, it's sensible to lean toward bigger names like Bitcoin and Ethereum, and then diversify into more speculative coins like Shiba Inu, if you're going to go hand over fist with cryptocurrency.
