The impending Bitcoin (BTC -5.75%) halving in April is one of the most anticipated events in the blockchain and crypto world, and for good reason. In the three previous halvings, the price of Bitcoin surged higher afterward, and many investors expect the same thing to happen this time around.

As a result, many investors are planning to buy Bitcoin before the halving event. But which other cryptocurrencies stand to benefit from the halving? Here are four that could be ready to soar.

Cryptocurrencies highly correlated with Bitcoin

Although the prices of all cryptocurrencies are correlated with Bitcoin to some degree, a handful of top cryptocurrencies have shown historically higher-than-average correlations. In other words, if you track the price of Bitcoin, and you track the price of these cryptocurrencies, you’ll see that they tend to zig and zag largely in unison. So if Bitcoin is poised for a major break-out after the halving, shouldn’t you be looking for other cryptocurrencies most likely to go along for the ride?

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With that in mind, it’s hard to ignore Ethereum (ETH -8.26%), which has been highly correlated with Bitcoin for much of its existence. This correlation has been as high as 0.95 (1 is perfect correlation). However, after Ethereum fundamentally changed its blockchain architecture as part of The Merge in 2022, the correlation between Bitcoin and Ethereum began declining.

In a note to its institutional clients in April 2023, Coinbase Global (COIN -1.13%) discussed that changing correlation, which had fallen from a 12-month average of 0.90 to a new level of 0.82. At the time, it looked like the paths of the two cryptos were finally diverging.

However, according to cryptocurrency correlation matrices, it appears that the 12-month correlation has climbed back to 0.89. Intuitively, this makes sense, given that both Bitcoin and Ethereum are up by an identical 60% so far in 2024. While you may not be getting a near 1:1 correlation, as prevailed in the early days of Ethereum, most investors would probably be happy with capturing 90% of the returns of Bitcoin.

Undervalued cryptocurrencies

For the sake of argument, I’m going to suggest that the title of “undervalued cryptocurrency” only applies if a cryptocurrency is trading more than 50% below its all-time high. That standard can help identify those that have a lot more room to run in this crypto market rally.

For example, consider the difference between Solana (SOL -9.94%) and Avalanche (AVAX -6.94%). Both are popular Layer-1 smart contract blockchain platforms, so it’s interesting to compare them on a head-to-head basis.

At a price of about $187, Solana is 29% below its high of $260. In contrast, Avalanche is trading more than 60% below its high of $146. Of late, Avalanche has started to gain momentum with investors, and I think much of this comes from the realization that, even at a price of more than $50, it could be remarkably undervalued.

Two other cryptocurrencies ranked in the top 20 by market capitalization are also worthy of further attention simply because they are trading at such substantial discounts from their highs: Cardano (ADA -11.48%), which is trading 76% below its peak, and Chainlink (LINK -13.53%), which is trading 62% below its peak.

Rules and guidelines for picking winners

There are no ironclad rules to indicate which cryptocurrencies are going to soar in 2024, but one can use certain guidelines to help winnow the field of potential buys. For example, one cryptocurrency that historically has been highly correlated with Bitcoin is Litecoin (LTC -6.95%), but it did not make my list.

Similarly, I did not include any metaverse crypto tokens or meme coins on the list. While they might appear to be undervalued based on their current prices compared to their historical highs, I think that there are much better investments out there.

If forced to choose just one of the four cryptos on my list — Ethereum, Avalanche, Cardano, and Chainlink — my top pick for maximum potential upside would be Avalanche. It is highly correlated with Bitcoin (a 12-month correlation of 0.79), and now ranks as one of the top 10 cryptocurrencies on Coinbase in terms of daily trading volume. Moreover, its recent tech upgrade (“Durango”) has received positive reviews.

But keep in mind that crypto is a notoriously volatile asset class, and there is an elevated level of risk anytime you invest in relatively unknown altcoins. So if you’re particularly risk-averse, it might be best to focus on the one cryptocurrency that is best positioned to benefit from the upcoming halving, and that’s Bitcoin itself.