Cryptocurrency investors are currently basking in the glow of significant gains, particularly those focusing on the leading assets of Bitcoin (BTC) and Ethereum (ETH). Despite earlier fluctuations this year, both cryptocurrencies have shown impressive recoveries, positioning themselves strongly as the year winds down.
As attention shifts to potential investments for the remainder of the year, experts weigh in on four notable cryptocurrencies that warrant close observation. Bitcoin—often considered the cornerstone of the crypto market—continues to capture investor interest. Though it has faced volatility, Bitcoin’s price surged over 19% year-to-date as of early September. Historically, September has been challenging for Bitcoin; industry expert J. Ryan Smolarz notes that this month is typically weaker. However, he suggests that this year could differ, citing the potential for institutional investors to quietly accumulate positions, possibly mitigating declines during market dips. Furthermore, he highlights upcoming Federal Reserve decisions on interest rates as key factors that could heavily influence Bitcoin’s trajectory.
Solana (SOL) is another cryptocurrency under scrutiny. Experts emphasize the importance of its validator distribution, which remains a point of concern. Chad Cummings, an attorney and CPA, warns that Solana’s centralization and history of significant outages present systemic risks, particularly if the market experiences a downturn. Currently, a substantial portion of Solana’s stake—over 33%—is managed by fewer than 30 validators, raising alarms about potential vulnerabilities.
Ethereum has also mirrored the highs and lows observed in Bitcoin’s performance this year, enjoying a nearly 30% gain year-to-date as of the beginning of September. Smolarz acknowledges Ethereum’s critical role in driving crypto innovation, despite the looming uncertainties of September mirroring those affecting Bitcoin. He believes Ethereum’s strong fundamentals and continuous upgrades, coupled with increasing institutional investments primarily through Exchange-Traded Funds (ETFs), provide a robust support system.
Another cryptocurrency catching attention is Arbitrum (ARB). Cummings points out that the treasury governance of Arbitrum could face heightened regulatory scrutiny under new decentralized autonomous organization (DAO) reporting mandates stipulated by the GENIUS Act. With more than $2.5 billion under its DAO treasury, Arbitrum is tasked with adhering to new regulatory standards, including registering beneficial owners and making annual disclosures. Cummings warns of potential ramifications if the DAO’s governance participants fail to comply, which may lead to classification as unregistered investment advisers under U.S. regulations.
As the cryptocurrency market continues to evolve, key players like Bitcoin, Ethereum, Solana, and Arbitrum hold significant potential that investors are keen to monitor closely as they navigate the final months of the year.
