Here Are 3 Cryptocurrencies Riding the Wave of Bitcoin's Recent Rally

Bitcoin (CRYPTO: BTC) set another all-time high on Monday, Oct. 6, breaking the $125,000 barrier and leading to a surge in cryptocurrency prices. The cryptocurrency market cap -- the total value represented by cryptocurrencies -- also topped a record $4.38 trillion, up more than 12% in 30 days.

There was already a lot of optimism in crypto markets about what's been dubbed "Uptober," a month that's often ended up in the green. Then came the federal government shutdown, which fueled gains in assets such as crypto, gold, and silver as investors sought alternatives and ways to hedge against uncertainty. In contrast, the U.S. dollar index (DXY) is down about 9% year to date.

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As I write this (Oct. 7), every single non-stablecoin cryptocurrency in the top 20 by market cap has risen during the past seven days. Here are three to keep on your radar.

1. Ethereum

Ethereum (CRYPTO: ETH) has surged more than 9% in the past week, though it fell short of setting a new all-time high. Ethereum -- the first ever smart-contract crypto -- continues to dominate decentralized finance (DeFi) and stablecoins. More than half the total $300 billion of stablecoins was issued on Ethereum.

On Oct. 6, Grayscale announced a U.S. first: Two of its spot Ethereum exchange-traded products would enable staking. Staking is a way that investors can generate yield by tying up their assets and contributing to network security. Investors can now earn returns on staked Ethereum through the Grayscale Ethereum Trust (NYSEMKT: ETHE) and Grayscale Ethereum Mini Trust ETF (NYSEMKT: ETH).

2. BNB

More than riding on Bitcoin's coattails, BNB (CRYPTO: BNB) is making its own waves this month. The multi-faceted token is up about 30% in the past week, having just set its own high of more than $1,300. BNB is being driven higher by multiple tailwinds, including growth in decentralized finance and institutional adoption.

Originally called Binance Coin, BNB has evolved far beyond its original use as a token for the Binance crypto exchange. BNB is the native coin for the BNB Smart Chain, a popular smart-contract ecosystem that accounts for 6% of the total value locked (TVL) across all DeFi protocols. Its TVL is up 24% during the past month, according to DefiLlama.

BNB is surging on the back of several pieces of news, including that it was the first purchase made by Kazakhstan's government-backed Alem Crypto Fund. The fund -- created in strategic partnership with Binance Kazakhstan -- aims to create a financial reserve by investing in digital assets.

It's worth noting that in 2023, Binance founder Changpeng Zhao pleaded guilty to violating money laundering laws. He served four months in prison and the new chief executive officer, Richard Teng, has since faced the task of giving Binance a more regulatory-friendly face. Even so, in 2024, Forbes estimated that Zhao owned more than 60% of the BNB in circulation.

3. Solana

Although Solana (CRYPTO: SOL) has benefited from surging crypto prices this year, it has lagged a little as institutional funds favored Bitcoin and Ethereum. That may change if (or when) various spot Solana ETFs get the green light. Unfortunately, the government shutdown could delay that process. It isn't clear if the Securities and Exchange Commission will approve any crypto ETFs while operating a skeleton crew.

Nonetheless, Solana is up 9% during the past week. It seems to be taking a growing share of the real-world asset tokenization market, which allows ownership of anything from real estate to equities and art to be recorded on the blockchain. This could prove transformative for cryptocurrencies.

According to RWA.xyz, Solana is in seventh place in terms of the value of tokenized assets on its chain. However, with an increase of almost 40% in the past month, it's also growing faster than any of the top-10 networks. If Solana, with its reputation for speedy transactions and low fees, can show financial institutions it is also secure, its chain may have another day in the sun.

Look beyond the wave

Faced with economic uncertainty, government shutdowns, and a falling dollar, it's understandable for investors to look for alternatives. And as cryptocurrencies become more mainstream with an influx of institutional and corporate capital alongside real-world use cases, they become more viable.

However, these are still high-risk investments. It's only a few years since the industry's last dramatic crash that saw the collapse of popular exchanges and platforms. And transparency and reporting in crypto markets is a long way from publicly listed stocks.

There are lots of good reasons to add cryptocurrency to your portfolio, particularly if you manage the risk by ensuring it only makes up a small percentage of your overall investments. When prices are surging as they are now, one way to avoid making emotional financial decisions is to be clear on your long-term investment thesis before you hit the buy button.

Emma Newbery has positions in BNB, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.