Many cryptocurrencies plunged in 2022 as rising rates, the collapses of high-profile exchanges and tokens, and regulatory threats drove investors toward safer investments. That "crypto winter" dragged on throughout the first half of 2023.

But over the past 12 months, investors gradually pivoted back toward cryptocurrencies in anticipation of lower interest rates and a warmer macro environment. So if you believe brighter days are ahead for the crypto market, it might be the right time to load up on these three cryptocurrencies.

A network of digital lines in the shape of a chainlink.

Image source: Getty Images.

1. Bitcoin

Bitcoin's (BTC -1.10%) price hit a new all-time high of $73,580 on March 14. It subsequently pulled back to about $65,000, but it's still up more than 130% over the past 12 months. That rally was driven by three main catalysts.

First, the U.S. Securities and Exchange Commission (SEC) approved the first 11 spot price exchange-traded funds (ETFs) for Bitcoin this January. That approval made it much easier to directly invest in Bitcoin, which was previously only accessible through direct purchases or ETFs tethered to trusts and future contracts.

Second, more investors are paying attention to the next "halving," which will reduce the rewards for mining Bitcoin in half this April. That process, which occurs every four years, will likely drive Bitcoin's price higher by tightening its available supply. Lastly, hopes for lower interest rates and a broader fear of missing out (FOMO) drew more investors back to Bitcoin. Bitcoin's price will likely remain volatile, but those tailwinds could drive its price much higher through the end of the year.

2. Ethereum

Ethereum (ETH -0.22%) also rallied 90% to about $3,500 over the past 12 months. Those gains were driven by hopes for spot price ETF approvals, major upgrades for improving the Ethereum Network's operating efficiency, and the development of more decentralized tokens and apps across its blockchain.

Ethereum's price recently slumped after the SEC requested more information from the Ethereum Foundation and continued its drive to reclassify Ether and other Ethereum tokens as securities. The SEC also reiterated its view that Bitcoin was the only cryptocurrency that could be classified as a commodity instead of a security.

That setback doused hopes for a quick approval of spot price ETFs for Ether, but it could head higher once it clears these regulatory hurdles. Ether's supply has still been steadily decreasing ever since it shifted from the "proof-of-work" (PoW) model to a more energy-efficient "proof-of-stake" (PoS) model in late 2022, and its token burns are accelerating that decline. Therefore, it might be smart to accumulate some Ethereum while the market is paying a lot more attention to Bitcoin.

3. XRP

XRP (XRP -0.49%), the native cryptocurrency of the Ripple payment protocol network, rallied more than 40% over the past 12 months but remains more than 80% below its all-time high of $3.84 from January 2018.

Like Bitcoin and Ethereum, XRP struggled with an exodus of investors as interest rates rose. However, XRP also faces unique regulatory and competitive headwinds.

On the regulatory front, the SEC sued Ripple and two of its executives in late 2020 for raising $1.3 billion through an unauthorized offering of XRP tokens. The regulators argued that those tokens should have been classified as unregistered securities. But last July, a U.S. court ruled that Ripple's sales of XRP tokens didn't constitute sales of unregistered securities, and subsequently shot down an appeal by the SEC three months later. The SEC then dropped its lawsuit against Ripple's two executives, but the two parties are still headed for a final court battle in April.

As for the competition, Ripple needs to keep pace with similar blockchain-powered networks like Ethereum, which serves a broader range of markets; and Solana, which processes its transactions at a faster rate. Those challenges are daunting, but If Ripple wins its case against the SEC and upgrades its network to keep pace with its competitors, its price could climb a lot higher over the next few months.