7 Potentially Lucrative Crypto Investment Opportunities in 2023

The primary reason to believe that crypto investment opportunities should be lucrative in 2023 is obvious.

The crypto space generally moves with a certain negative correlation to the stock market and traditional financial systems. The ratio is far from exact, but any concerns about the financial markets usually translate into capital inflows into the cryptocurrency markets.

So, further disruptions and shocks will lead to lucrative opportunities in crypto. These opportunities are lucrative because the movements are oversized. It is fair to say that crypto volatility is greater than stock market volatility. Thus, the gains are greater in coins and tokens than in listed shares. Stick with the most established cryptos, which offer strong upside and relative safety.

Bitcoin (BTC)

Source: Sittipong Phokawattana / Shutterstock.com

Bitcoin (BTC-USD) has already proven to be a lucrative crypto investment so far in 2023. With price gains over 70% so far this year, investors are well aware of Bitcoin’s lucrative upside and overall potential. It has outperformed the S&P 500, which is up 8% so far in 2023.

What is interesting about Bitcoin in a pricing sense is that it is clearly moving positively with the stock market: Both are up this year with BTC up much more strongly.

As the banking crisis showed, Bitcoin has value as a negative hedge. As shock rippled through the banking sector, stocks fell, but Bitcoin moved higher. Investors are well aware of this connection.

Given that leading indicators and prominent economists expect a recession in the second half of this year, it is likely that more shocks will materialize.

These shocks will likely originate in the traditional financial system which should in turn provide Bitcoin with a potent catalyst. Any recession will only strengthen the DeFi movement and BTC as a leading asset in the space.

Ethereum (ETH)

Source: shutterstock.com/BT Page

Much of the same argument above applies Ethereum (ETH-USD) as a solid investment. It has strengthened by about 65% in 2023, with a marked upturn after the banking collapse. Ethereum is the dominant platform that underpins so many other cryptocurrencies that exist today. It is therefore a barometer for the overall space.

The notion of Ethereum as digital oil is an apt analogy. The more activity there is in the cryptocurrency space, the better it is for Ethereum. Its smart contracts execute the programs that allow inter-party transactions to happen on the internet. It is fuel for the crypto economy.

Again, it is reasonable to assume that Ethereum may see additional catalysts in the form of future unpredictable shocks. Investors should assume that traditional finance and crypto will continue to converge this year.

XRP (XRP)

Source: Shutterstock

XRP (XRP-USD) offers plenty of potential upside. The potential catalyst isn’t exactly a surprise to anyone vaguely familiar with the crypto space: Ripple should prevail in the lawsuit against it by the Securities and Exchange Commission alleging that Ripple offered XRP as collateral.

No one knows when that judgment will happen, only that many expect Ripple to prevail. If the judge declares that XRP was a token all along, the price will rise. Again, not news to anyone remotely familiar with crypto and the case specifically. How much it can rise is the real question.

Speculation from late last year suggests that the price ranges between $1 and $3.84. XRP is trading below $0.50 at the time of writing after falling due to Bitcoin’s inability to sustain a price level of $30k.

The quick calculation therefore results in 100% upside in the worst-case scenario expected. That’s a lucrative return by most calculations.

USD coin (USDC)

Source: Gorev Evgenii / Shutterstock.com

USD coin (USDC-USD) is actually not a lucrative crypto opportunity in the same sense as other cryptos in this article. It is a dollar-pegged stablecoin designed to mirror the US dollar in price. So it is not really expected to rise in price at all. Investors want it to remain at $1 indefinitely.

It is lucrative considering its utility as a liquidity exit for investors looking to convert the crypto into USD.

As a crypto investor, one of the worst case scenarios would be one where your crypto assets suddenly appreciate, but you can’t cash out. That is what USD Coin and all stablecoins offer in terms of utility.

USD Coin is simply one of the biggest stable coins out there and is therefore worth holding. Tether (USDT-USD) is the most popular stablecoin and has a market capitalization of 2-3X that of USDC.

I would not argue for one over the other, but rather that crypto holders simply invest in either.

Solana (SOL)

Source: Rcc_Btn / Shutterstock.com

Solana (SOL USD) received a lot of attention due to its potential as an Ethereum killer earlier in the pandemic. It was heralded as a potential Ethereum killer for one simple reason: Speed. Speed ​​kills and Ethereum’s lack thereof were and continue to be a real liability.

The speed I’m referring to is transaction speed. The number of transactions a network can perform in a given time period (usually measured per second) limits scalability.

That’s a real problem for Ethereum as the standard bearer in the smart contract space. If it is too slow, it is a real problem: the “oil” of the crypto-economy must not have bottlenecks, otherwise scalability becomes a real problem.

But Ethereum remains sluggish with a TPS reading that has changed little even after the “Merge” late last year. Meanwhile, Solana’s TPS reading is about 100X that of Ethereum at the time of writing. It suggests that if the argument about Ethereum successors arises again, Solana will see sharp price increases.

Polygon (MATIC)

Source: sdx15 / Shutterstock.com

Polygon (MATIC USD) remains valuable for the simple problem just discussed: Ethereum speeds remain slow. Polygon is a layer 2 scaling solution. Layer 2 scaling solution is simply jargon with Layer 1 blockchain referring to Bitcoin and Ethereum.

These so-called scaling solutions are simply technical solutions to problems plaguing first-generation dominant blockchain protocols. Ethereum’s problem, as mentioned, is speed, or lack thereof.

Polygon’s TPS is theoretically as high as 65,000 transactions per second. So, Polygon has the tool as a kind of processor for Ethereum, which remains too slow.

In short, Polygon will remain relevant as long as Ethereum is dominant and has slow transaction speeds. That seems to be the case for the foreseeable future.

Ethereum is the dominant performer of smart contracts across cryptocurrencies. And it’s slow. Polygon was trading near $3 at the height of crypto mania. It now trades for around $1, but has the same potential and utility as it ever did.

Dogecoin (DOGE-USD)

Source: Shutterstock

I must have written it Dogecoin (DOGE USD) is a joke a dozen times before, but it’s a joke that can make crypto investors a lot of money. And since we are discussing lucrative crypto investment opportunities, I will repeat these ideas again.

Dogecoin is a joke based on a famous shiba inu meme. Both inspired Shiba Inu (SHIB-USD) the crypto, which in itself is another joke. I would argue that even though both cryptos are funded by investors who realize as much, there is a way to make money.

Shiba Inu and Dogecoin are synonymous in my mind. They have both become a mechanism for speculative crypto investors to achieve returns on volatility. I think of them as gauges of speculation in crypto. If investors behave more erratically, SHIB should move in an oversized manner.

At the date of publication, Alex Sirois did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Guidelines for publication.