Here are my top risk-averse cryptocurrencies

Volatility comes with the territory in the world of digital currencies but here are three that may hold up better than the rest.
The post Here are my top risk-averse cryptocurrencies appeared first on The Motley Fool Australia. –

This article was originally published on All figures quoted in US dollars unless otherwise stated.

This article was originally published on All figures quoted in US dollars unless otherwise stated.

The cryptocurrency market keeps expanding and that means a lot more choices for investors looking for exposure in digital currencies. Risk is inherent in all types of cryptocurrency, but there are some denominations that should hold up better on a relative basis. 

Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and USD Coin (CRYPTO: USDC) are my three largest personal investments in the cryptocurrency space. They also happen to be my top choices in terms of limiting the unusually high risks that come with the wild price swings for the market. 


The world’s best known cryptocurrency is Bitcoin, and understandably so. It’s the one that put digital currencies on the map. With a market capitalisation of $1.1 trillion, it is more valuable than the next 40 cryptocurrencies combined. If Bitcoin were a stock there would only be five US publicly traded companies commanding larger market caps.

Bitcoin is the industry standard. Some companies are converting some of their cash reserves to Bitcoin, and a growing number of financial platforms are allowing their customers to trade in the top dog of digital currencies. 

There are risks, of course. Bitcoin has been susceptible to sharp spikes and plunges. We’ve seen it happen this year. Bitcoin peaked in April, only to shed more than half of its value by June. It would go on to more than double, hitting fresh all-time highs earlier this month. If this is the kind of volatility that scares you away, you’re not going to want to hear that it has had even bigger crashes in the past. Bitcoin has always bounced back, but that’s obviously not a guarantee of future performance. 

Bitcoin is also coming under fire this year for the vast amount of energy consumed in mining for the crypto as a proof-of-work platform. It’s also expensive to transfer relative to some more nimble digital currencies. It’s not perfect, but it’s the default crypto as long as it sits atop the market cap throne.


The world’s second-most valuable denomination — with a market cap just above $500 million — is Ethereum. Despite commanding less than half of Bitcoin’s value it overtook the top dog as the most traded crypto on Coinbase Global in the last two quarters.

Ethereum’s blockchain tech has the superior functionality when it comes to use cases beyond being merely a store of capital. Ethereum has become a popular choice for decentralised applications — dApps — for gaming transactions, advertising, and non-fungible token bidding wars. Bitcoin’s recent Taproot update will help it close the gap on some fronts, but Ethereum’s already looking ahead to its next major transformation.

Ethereum is migrating away from proof-of-work to proof-of-stake, a shift that will make the world’s second-most valuable crypto even more energy efficient when it comes to generating new tokens but also help speed up transactions and related costs. 

USD Coin

Picking a stablecoin as my third choice for risk-averse cryptocurrencies may not seem fair, but it certainly makes the cut as a digital currency. Coinbase created USD Coin — more commonly referred to as USDC — and the leading trading exchange stands by it as coin with a price locked at $1 and pegged 1-to-1 with the US dollar. 

Why would you want to own a crypto locked at $1? Coinbase only offers a 0.15% yield on traders holding the stablecoin, but there are far better alternatives elsewhere if you’re willing to risk it on another app that will lend, stake, or otherwise use your USDC. Platforms like Celsius Network currently pay more than 10% on USDC. Voyager is rolling out a debit card where you can earn 9% interest on your USDC until you use it for purchase. 

Chasing yield on USDC is riskier than just parking it on Coinbase or in a crypto wallet and even if you’re OK with just earning 0.15% on Coinbase, you are at the mercy of the platform’s financial viability. It’s still a low-risk crypto with a decent $37 billion currently in circulation. 

This article was originally published on All figures quoted in US dollars unless otherwise stated.

The post Here are my top risk-averse cryptocurrencies appeared first on The Motley Fool Australia.

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

Before you consider cryptocurrency, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and cryptocurrency wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Shiba Inu Coin sank 7% today

My first crypto buy: Solana

The DigitalX share price has tumbled 30% in 8 days. What’s happening?

Did the Bitcoin and Ethereum bubble burst just signal a crypto market top?

Why ASIC chair warns ‘great caution’ needed when investing in crypto

Rick Munarriz owns shares of Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool Australia’s parent company The Motley Fool Holdings Inc. owns shares of and recommends Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!