All lights appear to be flashing green for the crypto market right now. Bitcoin (BTC +0.54%) just hit a new all-time high of more than $123,000. New crypto legislation is making its way through Congress. And many are talking about "Stablecoin Summer."
In short, the stage could be set for a big year-end rally in the crypto market. Here are three cryptocurrencies that have the potential to soar during the next five months.
Bitcoin
Of course, the obvious pick is Bitcoin. Historically, Bitcoin has always led the market higher. So if you think that the crypto market is headed higher, then you need to think about buying Bitcoin, which accounts for a whopping 62% of the total value of the crypto market.
Institutional demand for Bitcoin remains strong. Money is once again surging into the spot Bitcoin exchange-traded funds (ETFs). At the same time, new Bitcoin treasury companies are launching left and right. These companies, modeled after Strategy (MSTR +4.46%), the original Bitcoin treasury company, are amassing billions of dollars to buy Bitcoin.
CRYPTO: BTC
Key Data Points
Moreover, Bitcoin is getting plenty of attention from the Trump administration. In many ways, the price of Bitcoin has become a proxy for the overall health of the crypto market and the success of the Trump administration's pro-crypto policies.
During "Crypto Week," President Donald Trump specifically linked the success of crypto to his overall campaign theme of "Make America Great Again." So I'm fully expecting a new push for an enhanced Strategic Bitcoin Reserve, as well as other moves that could send Bitcoin higher in the second half of the year.
Ethereum
If there's any cryptocurrency that comes close to Bitcoin in terms of support from the Trump White House, it's Ethereum (ETH +0.32%). If there is going to be a merger of traditional finance and blockchain finance, as many now expect, then Ethereum is going to be a big part of it.
Ethereum is still the go-to blockchain for decentralized finance (DeFi), where it holds a commanding 58% market share. Ethereum is also the primary blockchain for stablecoins, which have emerged as one of the hottest crypto success stories of the year. These are two areas of the crypto market that hold the highest appeal for Wall Street financial firms.
Image source: Getty Images.
Keep in mind, though, that Ethereum is up less than 2% for the year (as of July 17). So Ethereum is much less of a slam dunk than Bitcoin. But there is one key development coming up soon that could light a fire under Ethereum, and that is the imminent passage of the Clarity Act.
The Clarity Act, which is one of the two pieces of legislation under review by Congress during "Crypto Week," provides specific guidance on how digital assets should be regulated. The thinking now is that the overall regulatory treatment will be very favorable, opening the door for institutions to offer a much broader array of crypto-related financial products. That could unlock even more demand for DeFi, thereby helping to push the price of Ethereum higher.
The one meme coin you should not buy
During any bullish cycle, crypto investors typically rotate into riskier and riskier investments, as they search for higher and higher returns. That usually means an embrace of meme coins, which are among the riskiest and most speculative cryptocurrencies out there. At the end of 2024, the same phenomenon occurred, as pro-crypto euphoria led to meme coin buying.
CRYPTO: PENGU
Key Data Points
It's impossible to predict which meme coin will pop next, but it looks like Pudgy Penguins (PENGU +4.99%), the meme coin inspired by the Pudgy Penguins non-fungible token (NFT) collection, could lead the way. In the past week, Pudgy Penguins soared as much as 60%. That happened after Coinbase Global (COIN +6.23%) briefly changed its social media profile photo to a Pudgy Penguin. Crypto influencers and some crypto firms followed suit, showing their support for the meme coin.
I've written before about the perils of investing in dog-themed meme coins. Those warnings are even stronger for penguin-themed meme coins.
Buying priorities
If you are choosing which cryptocurrency to buy next, the clear choice is Bitcoin. If history is any guide, Bitcoin has the ability to perform well during periods of extreme market uncertainty. So, even if you are expecting market turmoil ahead due to tariffs, Bitcoin could provide a hedge. The same cannot be said for Ethereum, or any other altcoin.
There's no guarantee, of course, that Bitcoin will soar during the next few months. However, both Bernstein and Standard Chartered have recently come out with $200,000 price predictions for Bitcoin, so it definitely has the potential to double in value. If you're willing to accept the risks of investing in crypto, then Bitcoin could be a great way to turbocharge the performance of your portfolio in 2025.
