Bitcoin’s Inflation Alarm Rings True: 3 Cryptos to Buy Now

Market focus is on the Federal Reserve’s potential interest rate hikes due to stubborn inflation, with some investors considering the possibility of rate increases. Recent economic data, including a Consumer Price Index report showing a 3.5% increase in prices from a year earlier, has fueled speculation about the Fed’s next move. Combined with, heightened instability in the Middle East led to Bitcoin (BTC-USD) being sharply sold off. It now trades for around $66,000 at the time of writing. Still, I think there are some cryptos to buy despite this.

For one, it should be noted that Bitcoin traded at some considerably overvalued levels on the Relative Strength Index (RSI) for the weekly and monthly charts, a key indicator for measuring overbought and oversold levels. It then follows that brief pullback is healthy for the coin, giving bulls a rest before surging higher.

Of course, we are also going to see the Bitcoin halving event on Apr. 20, with some analysts predicting that it will catalyze a strong bull run, repeating the behavior of previous events.

I remain firmly bullish on Bitcoin’s prospects for this year, and this applies to the rest of the crypto ecosystem as well. So here are three cryptos to buy to take advantage of Bitcoin’s temporary pullback.

Bitcoin (BTC-USD)

Bitcoin is my number one pick for investors this year. Although one is free to speculate with memes and less-capitalized coins, I strongly believe that crypto investors should stick to investments that match their short and long-term time horizons. BTC has this potential. 

The issue with trading more speculative coins is that one could end up bagholding a significant amount of coins that have questionable futures. The case for Bitcoin is more robust in my opinion, although its volatility could be too much for many.

For a longer-term perspective, analysts predict a steady increase in Bitcoin’s price through to 2030, with annual increments suggesting a gradual rise to around $88,713.92 by the end of the decade. This long-term optimism is mirrored by the general upward trend in Bitcoin’s price over the past year, where it has generally outperformed against other assets​.

This makes BTC one of those cryptos to buy.

Ethereum (ETH-USD)

Ethereum (ETH-USD) is another one of those blue-chip cryptos to buy that I think investors should consider holding along with Bitcoin. As cryptocurrencies are still speculative assets they are sensitive and can be prone to being sold off in large quantities when things go bad in the macro view. Still, bagholding ETH is not the worst position to be in. There are theories that ETH’s market cap could one day surpass Bitcoin’s.

Meanwhile, from a financial perspective, ETH has demonstrated resilience with a positive price trajectory throughout early 2024. Analysts predict Ethereum’s price could potentially reach new highs, with some predictions indicating a target around $5,300, driven by both technological upgrades and increasing institutional adoption.

Ethereum’s transition to proof-of-stake (PoS) has laid a robust foundation for its future. The network is seeing growing adoption of its layer 2 solutions. It is also offloading some of the risks from crypto’s continued energy use.

Bitcoin is in a somewhat dangerous and speculative position as its energy use is what secures the network. However, many consider the energy used to be wasteful. PoS is one proposed solution that does not rely on miners. That could give ETH a significant competitive advantage moving forward.

Binance Coin (BNB-USD)

Binance Coin (BNB-USD) is used in a variety of purposes within the Binance ecosystem. Originally launched as an ERC-20 token on the Ethereum blockchain, Binance Coin has since evolved into its own native blockchain, Binance Chain. This transition has empowered BNB with greater utility and efficiency within the Binance ecosystem.

One of the primary functions of BNB is to serve as a utility token on the Binance exchange. Traders can use BNB to pay for trading fees, enjoying discounts when they use BNB instead of other cryptocurrencies. This not only incentivizes traders to hold BNB but also drives demand for the token on the exchange.

I think that BNB could be one of the most successful initial coin offerings (ICO) of all time. Binance has remained one of the strongest crypto exchanges globally despite its recent ruins with regulators.

My view is that Binance will continue its dominance in the market. That makes it one of those cryptos to buy.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.