The crypto market is a treacherous sea, yet legions of investors are drawn to it. Why? Because of its explosive gains! But some of you are smart. You actually want to manage your risk. So let’s explore some low-risk cryptocurrency investments.
It’s 2020 and the crypto market is slightly more mature now. People like you and me are starting to look for more sustainable investments. The riskiest investments are generally the low cap coins, especially newly launched ICOs, IEOs, or STOs.
Therefore, if you want to proceed cautiously, high-cap cryptocurrencies are recommended.
But don’t get it twisted. You might think that any cryptocurrency in the top twenty or top ten is a low-risk investment. That’s not true.
XRP, for instance, is not a low-risk investment. XRP is a wild card. It’s unpredictable, controversial, and so different from most cryptocurrencies in its structure.
Yet it is the top 3rd cryptocurrency in market cap, currently worth almost $12 billion.
Bitcoin SV is another high-risk cryptocurrency in the top ten. Like seriously, I can’t even begin to describe how awful this project is. One of the worst in the space. Mostly because it is run by a scammer.
So no, not all coins with high market cap are low risk. Keep that in mind.
Disclaimer: The crypto market is inherently risky. Even the low-risk investments in crypto may be high risk when compared with traditional markets. I am not a financial adviser and this isn’t financial advice.
With that being said, it’s all about trade-offs. High risk = high reward. Low risk = Low reward.
Now keep in mind that I did my own fundamental analyses on these cryptocurrencies. But these are opinions only.
For me, these are the top 5 currencies that are relatively safe. They are not necessarily the best. But for me, they are low risk investments.
Low Risk Crypto Investments
5. Cardano (ADA)
Cardano is an open source project that aims to build a system for running financial applications. Its native currency is ADA, which serves as the digital cash of its network.
What sets Cardano apart from every other cryptocurrency is its methodology. Cardano takes a scientific and rigorous approach in building its system: a system that is peer-reviewed.
What does peer-reviewed mean? It means that every protocol and technical innovation they build has to go through quality control review from world-class experts on the technology.
Why? Because the team needs the backend framework of their platform to be built with high assurance code — mission-critical level of reliability. This is the same quality of programming that goes on when engineers build avionics (airplane software).
See how methodical and careful their approach is?
To top it all off, Cardano is run by Charles Hoskinson, co-founder of two successful cryptocurrecy projects: Ethereum and Bitshares. So relatively, your money is in good hands. I consider this a low risk investment.
Year 2019 Price Movement
4. Monero (XMR)
This is the only cryptocurrency in this list that is not in the top 10.
The reason I think XRM is a relatively low risk crypto investment is, well, it is the best in its class.
There are a variety of privacy coins floating around the crypto space. None of them, so far, is on par with Monero.
Monero utilizes 3 extremely potent privacy features:
- Ring Signatures — conceals the sender
- RingCT — conceals the transaction details
- Stealth addresses — conceals the receiver
On top of that, Monero is also building an internet overlay that can conceal users on a network level. To put this in layman’s terms, they are trying to create a VPN that can escape even the NSA’s and CIA’s pursuit, in a sense.
This is what I’d like to call complete internet invisibility.
Unlike other privacy coins like Dash and Zcash, Monero’s privacy is not optional. Why? Because that would dilute the potency of its privacy.
We know for a fact that privacy coins have a place in the world. For a lot of people, privacy is a basic human right. So we do have a use case, we just need the technology to scale enough to handle millions of users and more.
Also, the privacy coin is about 6 years old, and manages to stay on the top 15, even with all the new ones coming in.
Year 2019 Price Movement
3. Binance Coin (BNB)
Some of you probably know about the Binance crypto exchange. It’s not perfect, but I have no doubt that it’s still the world’s leading cryptocurrency market.
Binance entered the crypto scene sometime in 2017 and had a meteoric rise in popularity among exuberant crypto enthusiasts/investors. The exchange issues BNB as its native token, primarily offering it to users in exchange for trading fee discounts.
Since then, Binance has evolved into a large-scale ecosystem that provides various services in the blockchain industry and crypto space. And so BNB’s utility broadened as well.
The token’s price skyrocketed even during the all-time low of the bear market in 2018. BNB handled the “crypto winter” like a boss, putting even Bitcoin to shame.
Here are some of Binance’s products:
- Exchange — a centralized crypto exchange using BNB
- Binance Chain — Binance’s blockchain which houses BNB
- Binance DEX — a decentralized exchange that uses BNB
- Launchpad — a fundraising platform that uses BNB
- Over-The-Counter Trading — for institutional and private investors
- Binance Labs — a blockchain incubation platform
- Binance Academy — offering multi-language blockchain education
- Trust Wallet — Binance’s own crypto wallet
As you can see, BNB’s use case is largely dependent on the success of Binance as an entity and as an ecosystem. I see that as a good thing because Binance is probably the most influential company in the crypto space today.
Here are some places that utilize BNB:
With Binance continuing to increase their relevance in this industry, I can say with confidence that there is more upside to investing in BNB today.
Year 2019 Price Movement
2. Ethereum (ETH)
You probably have heard of Ethereum. The number 2 of crypto.
It was proposed by blockchain prodigy Vitalik Buterin back in 2013. Initially released in 2015, Ethereum started getting widely adopted sometime in 2016 by cryptocurrency projects.
And to this day, Ethereum still runs the majority of blockchain-based applications worldwide. It has multiple use cases that encompasses dozens of industries.
Because of this, and its branding, Ethereum has the most developer activity among all cryptocurrency projects. Yes! Even more than Bitcoin.
Why? Because Ethereum is general purpose.
And there are way too many blockchain projects built on or integrated with it. If Ethereum fails, nearly half the crypto community will likely die with it. Developers will never let that happen.
As we speak, Ethereum is currently being heavily developed and is about to transition to version 2.0. For me, now is a good time to invest in Ethereum.
Year 2019 Price Movement
1. Bitcoin (BTC)
You knew this was coming.
Of course, Bitcoin is hands down the safest investment in the crypto market. It is the big brother of all blockchain projects. It all started here.
Bitcoin was released in 2009.
11 years down the line and it’s still the dominant cryptocurrency. Hell, over 60% of the nearly $300 billion crypto market cap is made of Bitcoin.
Let that sink in.
Some of the best cryptographers in the world are working hand in hand to make Bitcoin the:
- Primary internet currency
- World currency
BTC is also the most popular cryptocurrency in the world. Supported by major players like legendary VC investor Tim Draper, Twitter founder Jack Dorsey, billionaire ex-hedge fund manager Mike Novogratz, and many more.
Even Elon Musk called Bitcoin “brilliant”.
There’s no room to tell you in detail why it is the most secure, decentralized and transparent currency in the world, as that would take a whole post in and of itself. But it is.
Back in 2017, so many newcomers came into the crypto space asking for my opinion. Basically, they wanted to invest their hard-earned cash anywhere as long as its crypto, which was crazy by the way. But I always say:
“If you’re not gonna do your research properly and just want to invest blindly because crypto is hot and popular right now, then I suggest you stick with Bitcoin. Otherwise, you’re gonna get burned.”
That’s what I would say to a dear friend even today. But research is absolutely important before investing, for crying out loud. Hopefully, people are more mature now (I sincerely hope so).
Year 2019 Price Movement
Conclusion
Low-risk cryptocurrency investments are extremely hard to find. And despite the market calming down a little bit these past two years, cryptocurrencies remain a high risk asset to invest in.
With that being said, if you choose to take a chance on high market cap cryptocurrencies with a proven track record, you are relatively on the safer side of things.
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