3 Altcoins to Consider Buying Now

Bitcoin receives the lion's share of attention from crypto investors. Fair enough. Bitcoin accounts for a whopping 57% of the total market cap of the crypto market and is still the market benchmark for where crypto is headed next.

But several top altcoins could outperform Bitcoin. Some of these cryptocurrencies are already up anywhere from 30% to 50% in 2025 -- and it's only January. The three altcoins at the top of my list are Solana (CRYPTO: SOL), XRP (CRYPTO: XRP), and Chainlink (CRYPTO: LINK).

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1. Solana

It's impossible to ignore Solana. It's now the fifth-largest cryptocurrency in terms of market cap and has been on an absolute rocket ship in January. On Jan. 13, the price of Solana was $185. One week later, it was at $295. The thinking is that Solana, currently trading around $250, might make a run at $400 in 2025.

What's driving the surge in Solana's price? It's a combination of two key factors. First, Solana is a top prospect to get a spot exchange-traded fund (ETF) in 2025. If that happens, we'll likely see a steady flow of investor money into Solana throughout the year. According to JPMorgan Chase, as much as $6 billion could flow into Solana over the next 12 months.

Second, Solana is seeing a tremendous spike in new user activity, especially with trading volume on its decentralized cryptocurrency exchanges. Solana has become the leading blockchain for launching new meme coins, and its decentralized exchanges are where you buy and sell them. In mid-January, President Donald Trump even launched a meme coin on Solana, and it immediately soared to a valuation of $10 billion.

Image source: Getty Images.

Whatever you think about meme coins, you must admit they're effective at attracting new users, boosting overall activity, and driving up valuations. One of the most popular mobile apps right now is a Solana blockchain wallet called Phantom, which makes it easy to buy and sell meme coins. In January, Phantom landed a new round of venture capital money that values it at a cool $3 billion.

2. XRP

XRP surged in November as part of the post-election crypto rally. And it's surging again in January. For the year, XRP is already up 53%.

Ripple, the company behind the XRP crypto token, has been the subject of significant Securities and Exchange Commission (SEC) scrutiny for the past four years. But with former SEC Head Gary Gensler gone, the regulatory outlook for Ripple has cleared up considerably.

A new-look SEC is creating new possibilities for Ripple within the U.S. market. Case in point: Ripple recently launched a new U.S. dollar-backed stablecoin to support the XRP blockchain ecosystem.

With a much more favorable regulatory environment under Trump, XRP could skyrocket in value. Some investors think XRP -- currently trading at around $3 -- could eventually hit a price of $10.

3. Chainlink

Chainlink has been a crypto underperformer for the past few years, but a few factors are in Chainlink's favor as we head into 2025. First and foremost, Chainlink already appears to be benefiting heavily from Trump's pro-crypto policies. A "Trump-inspired" crypto company, World Liberty Financial, recently endorsed Chainlink, immediately leading to a 50% run-up in the crypto's price.

Chainlink remains the top blockchain data oracle in the world. When blockchains need data from a trusted third-party source, they turn to Chainlink. That makes Chainlink very valuable for decentralized finance (DeFi) since blockchains constantly need real-time data from the financial markets. During the previous crypto bull market rally in 2020-2021, Chainlink was a star performer thanks to its prowess in DeFi, and we're starting to see the same phenomenon in 2025.

In terms of future growth prospects, Chainlink is also emerging as a top blockchain player in the world of real-world asset (RWA) tokenization. The term "tokenization" might sound a bit arcane, but it simply refers to the process of transforming real-world assets (think stocks, bonds, and real estate) into digital assets on a blockchain. According to top-tier consulting firms like McKinsey & Company and the Boston Consulting Group, RWA tokenization is a potential multitrillion-dollar market opportunity.

Altcoins or Bitcoin?

Altcoins, by their very nature, tend to be more volatile than Bitcoin. Yes, the highs can be much higher, but the lows can be much lower. For example, Solana was up 11,171% in 2021 and 976% in 2023. But it lost 94% of its value in 2022. If you had invested in Solana in 2021, you would have been nearly wiped out. So, buyer beware.

That said, altcoins can be a great way to diversify your portfolio. Unless you're a devout Bitcoin maximalist, you probably should not go all-in on Bitcoin. And that's where Solana, XRP, and Chainlink enter the picture. They all do different things than Bitcoin and can provide needed diversification. If everything goes according to plan, they could also turbocharge your crypto returns in 2025.

Should you invest $1,000 in XRP right now?

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JPMorgan Chase is an advertising partner of Motley Fool Money. Dominic Basulto has positions in Bitcoin and Solana. The Motley Fool has positions in and recommends Bitcoin, Chainlink, JPMorgan Chase, Solana, and XRP. The Motley Fool has a disclosure policy.