The Bitcoin (BTC 3.73%) halving on April 19 was one of the most anticipated events of the year for crypto investors. Previous Bitcoin halvings have led to spectacular crypto market rallies, and the expectation is that this halving cycle -- despite the recent downturn in price for Bitcoin -- will be no different.
So which cryptocurrencies are best positioned to soar in value after the Bitcoin halving? In addition to Bitcoin, three cryptos could turn in some spectacular gains over the next 12 months.
1. Stacks
Stacks (STX 1.03%) is a blockchain designed to piggyback on the long-term success of Bitcoin. As a Layer-2 blockchain, it sits on top of the Bitcoin blockchain and provides extra scalability and functionality. You can think of it as making the core Bitcoin blockchain better than it already is.
While Stacks may not yet be a household name, it currently ranks as one of the 35 largest cryptos with a $3 billion market cap. For the year, Stacks is up 40%, which lines up nicely with Bitcoin's 40% returns. That correlation makes sense since Stacks is tied to the long-term success of Bitcoin.
With Bitcoin going increasingly mainstream as a result of the new spot Bitcoin exchange-traded funds (ETFs), demand for Stacks' offerings will grow. Some people don't just want to hoard their Bitcoin -- they want to do things with it. And that's where Stacks comes into the picture. The more functionality it can make available to Bitcoin holders, the more valuable it should become.
2. Fetch.ai
The growing intersection of artificial intelligence (AI) and blockchain technology is fueling the demand for AI crypto tokens. Since there is no official ChatGPT token, the next best option is Fetch.ai (FET 0.54%), a crypto token designed to power the future AI economy. Fetch.ai currently has a $1.7 billion valuation and ranks as one of the top 50 cryptocurrencies by market cap.
Image source: Getty Images.
Fetch.ai describes itself as "an open, permissionless, decentralized machine learning network with a crypto economy." That's a mouthful, but it just means that Fetch.ai is the go-to destination if you need bots, data, or services (known as "agents") related to AI. Say, for example, you're interested in building a new AI bot for your company or industry. You wouldn't need to build it from scratch. Theoretically, you'd be able to find everything you need via the Fetch.ai platform.
For the year, Fetch is up a head-spinning 200%. As long as the narrative around AI remains intact, the sky's the limit for Fetch.ai. That being said, even after posting triple-digit returns this year, Fetch.ai still trades for just $2. So for less than the cost of a cup of coffee, you can invest in the future of AI technology.
3. Solana
Finally, there's Solana (SOL 3.05%), which has the potential to become "the next Ethereum." For now, Ethereum is still the 800-pound gorilla in the Layer-1 blockchain space, but Solana is a worthy rival. When it comes to areas such as decentralized finance, Solana is rapidly gaining ground. And remember: Solana was tagged as a potential "Ethereum killer" back in 2021, so it wouldn't surprise anyone if it eventually surpasses Ethereum.
That being said, there are a few issues with Solana. Namely, it continues to be bogged down with random network outages that last far longer than they should. And much of its recent growth appears to be fueled by meme coin mania, which is likely not sustainable over the long haul.
But I'm still a big believer in Solana's long-term growth prospects. It's the only major blockchain with a mobile crypto strategy. The big idea here is that if people have a physical hardware product to put in their hands -- the Saga crypto phone -- they will be much more likely to use the Solana blockchain. According to Solana, the Saga phone could be the way to onboard tens of thousands of new users.
And the winner is...
Three cryptos, three very different approaches to the crypto future. If you want to double down on your Bitcoin investment and stay within the Bitcoin ecosystem, then Stacks might be an intriguing option. If you're willing to embrace the risk of investing in AI, then Fetch.ai might be the right choice for you.
But my favorite pick remains Solana. In my view, it's the perfect example of a large-cap crypto with truly phenomenal long-term growth prospects. Given that Solana's market cap is $60 billion, and Ethereum's market cap is $360 billion, the potential exists for Solana to rise six-times in value over the next few years. If you buy into the idea of Solana being "the next Ethereum," then this might be the one crypto to buy after the Bitcoin halving.
Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Fetch, and Solana. The Motley Fool has a disclosure policy.
