2024 was the year that crypto finally tipped into the mainstream. New spot cryptocurrency ETFs started trading, crypto emerged as a campaign issue during the presidential election, and Bitcoin (BTC -0.01%) hit a price of $100,000 at the end of the year.
So it’s perhaps no surprise that many investors are now looking for ways to invest in crypto in 2025. But which cryptos are worth buying, and just how much exposure should you have to them? Let’s take a closer look.
Bitcoin
The obvious no-brainer pick here is Bitcoin, which was up another 125% last year, making it the best-performing asset in the world. And it wasn’t even close. The Nasdaq, for example, was up 30%, and the S&P 500 was up 24%.
Over the past decade, Bitcoin has consistently been one of the top-performing assets. While there have been some down years along the way -- with 2022 standing out as a particularly toxic year -- Bitcoin can generally be counted on to deliver double-digit, and even triple-digit, returns. Historical performance is no guarantee of future performance, but Bitcoin certainly has a stellar track record.
Heading into 2025, Bitcoin has a tremendous amount of momentum, thanks in large part to the campaign promises of incoming President Donald Trump. On the campaign trail, Trump promised to bolster the Bitcoin mining industry, make America the crypto capital of the world, and create a new strategic Bitcoin reserve. Combined, all of these factors are very bullish for Bitcoin.
Best of all, it’s never been easier to invest in Bitcoin. At one time, you needed a crypto wallet, specialized knowledge of the crypto market, and access to a cryptocurrency trading platform. Now, all you need to do to invest in Bitcoin is buy one of the new spot Bitcoin ETFs. That makes the process of investing in Bitcoin as easy as buying your favorite tech stock.
Solana and XRP
So which other cryptocurrencies could be getting spot ETFs of their own in 2025? Two of the top prospects are Solana (SOL 6.97%) and XRP (XRP 12.68%). Both rank among the Top 10 cryptos in terms of market cap, both have the attention of retail and institutional investors, and both have a relatively high probability of getting regulatory approval from the SEC.
These spot ETFs are important for one primary reason: they will lead to a new influx of money from investors, helping to push up the price of the underlying cryptocurrency. This is the same pattern we saw with the spot Bitcoin ETFs. According to JPMorgan Chase (JPM 1.97%), as much as $3 billion to $6 billion could flow into the new spot Solana ETFs, and as much as $4 billion to $8 billion could flow into the new spot XRP ETFs.
Image source: Getty Images.
Even if they do not get ETFs this year, both Solana and XRP are worthy of further consideration, based on their underlying functionality and utility. Solana is a leading smart contract blockchain network, with a very robust blockchain ecosystem. It also has a new mobile crypto strategy to onboard new users in 2025.
And XRP continues to be a trusted platform for settling financial transactions, especially those that involve cross-border money flows. Ripple, the company behind the XRP token, recently settled with the SEC on a long-running case, and now appears ready to launch a new wave of innovations to support the XRP blockchain network.
How much should you allocate to each crypto?
When it comes to investing in crypto, it’s important to get the allocation right. One popular way to do this is to look at the market cap of a specific cryptocurrency, and then calculate how much of the total crypto market cap it accounts for, using data from CoinMarketCap.
So, for example, Bitcoin has a market cap of approximately $2 trillion, which is 57% of the the $3.5 trillion crypto market. As a general rule of thumb, then, Bitcoin should account for at least 50% to 60% of your long-term crypto investment portfolio. Depending on your level of risk tolerance, you can adjust this figure higher or lower.
Another way to calculate how much to allocate to each crypto is by analyzing the new Coinbase 50 Index, which was designed by Coinbase Global (COIN 7.66%) to be the premier tracking index for the overall crypto market. Currently, Bitcoin has a 50% weighting in this index, while XRP has a 9% weighting, and Solana has a 5% weighting.
You might set a rule, then, that your top 3 holdings should account for two-thirds of your overall crypto portfolio. You then have some additional flexibility to add in a few high-risk, high-reward cryptos to round out your portfolio. Adding in a top AI crypto, for example, might be one way to turbo-charge your returns next year.
With this framework in mind, the task of investing in crypto in 2025 should not feel as daunting as it might now. Make Bitcoin the cornerstone of your investment strategy, and then find a few high-quality cryptos such as Solana or XRP to diversify your portfolio. Doing so will give you the best chance of maximizing the performance of your crypto portfolio over the long haul.
