Have you ever wondered what is the safest cryptocurrency to invest in this 2023? With the increasing popularity of digital currencies, it’s essential to choose wisely when it comes to investing your hard-earned money.
The world of cryptocurrency can be intimidating, but with the right information, you can make confident, informed decisions about where to place your money. In this guide, we’ll reveal the top safest cryptocurrency options available.
By understanding the criteria for a secure investment, you can safeguard your finances and take advantage of cryptocurrency’s potential growth opportunities. So, buckle up and get ready to discover the top safest cryptocurrency to invest in!
What is a Cryptocurrency?
Before we dive into the main topic, which is identifying the safest crypto to invest in, you should first understand cryptocurrency’s basic terms.
Cryptocurrency, sometimes called crypto-currency or crypto, is a decentralized digital payment system that allows for secure, peer-to-peer transactions without intermediaries such as banks.
Instead of physical currency, cryptocurrency exists as digital entries in a public ledger known as a blockchain. These transactions are verified and recorded through a complex encryption process, making them highly secure.
Cryptocurrency is stored in digital wallets, essentially software programs that securely store the user’s public and private keys. The public key is used for receiving payments, while the private key is used for accessing and sending funds from the wallet.
The first and still the most well-known cryptocurrency is Bitcoin, which was created in 2009. Since then, numerous other cryptocurrencies have been developed, each with its own unique features and uses.
The value of cryptocurrencies can be highly volatile, with prices often driven by speculative trading. Some people trade cryptocurrencies as an investment, hoping to profit from price fluctuations. Others use it as a means of payment for goods and services due to its ease of use and low transaction fees.
Top 15 Safest Cryptocurrency to Invest
Based on a variety of factors – such as current pricing action, target roadmaps, future potential, and mass appeal – here’s a list of the safe cryptocurrencies to invest in now for 2023.
Bitcoin (BTC)
Market cap: Over $350 billion
Bitcoin is a decentralized digital currency that was created in 2009 by an unknown individual or group of individuals who used the pseudonym, Satoshi Nakamoto. It operates on a decentralized ledger system called blockchain that records all transactions on the network and helps to prevent fraud and cyber attacks.
Transactions in Bitcoin are verified and processed through a cryptographic process called proof-of-work, making it a secure form of currency. In recent years, Bitcoin has gained significant popularity, which has resulted in a significant increase in its market value.
In May 2016, one Bitcoin was worth around $500, but as of January 10, 2023, it’s trading in the range of $17,500 to $18,000. That’s why it’s considered by many as one of the safest cryptos to invest in. Despite its volatility, Bitcoin has proven to be a resilient cryptocurrency, bouncing back from market crashes and showing steady growth over time.
Ethereum (ETH)
Market cap: Over $ 170 billion
Ethereum is a blockchain-based platform that operates as a decentralized platform for building and running decentralized applications (dApps) and smart contracts. Developers widely use it due to its potential applications and capacity to run smart contracts, self-executing agreements that automatically trigger when certain conditions are met.
Ethereum has also experienced tremendous growth in its value, going from $11 in April 2016 to over $3,000 in March 2022, which represents an increase of over 27,000%.
However, the overall market crash in late 2022 caused Ethereum to drop to its yearly low of $1,091 on November 9, 2022. Since then, it has rebounded and is now trading near $1,400, as of January 10, 2023.
Tether (USDT)
Market cap: Over $66 billion
Tether is a stablecoin, a type of cryptocurrency designed to maintain a stable value relative to a fiat currency, such as the US dollar or the Euro. It is designed to reduce the volatility that is common in other cryptocurrencies. As a result, it is favored by investors who are wary of the extreme price swings of other cryptocurrencies.
Tether is backed by a reserve of fiat currencies, which helps ensure its value remains stable and is, therefore, a safer investment option for those looking to invest in cryptocurrencies but are concerned about market volatility.
Binance Coin (BNB)
Market cap: Over $45 billion
Binance Coin (BNB) is the native cryptocurrency of Binance, one of the largest and most widely used cryptocurrency exchanges globally. It serves multiple purposes, including trading and paying fees on the Binance platform and being used for travel bookings and payment processing.
BNB has shown remarkable growth since its launch in 2017, rising from a price of $0.10 to $285 as of January 10, 2023. This represents an increase of over 280,000%, making it a highly valuable investment.
Binance Coin can be traded or exchanged for other cryptocurrencies, such as Ethereum or Bitcoin, making it a versatile addition to any crypto portfolio.
XRP (XRP)
Market cap: Over $18 billion
XRP, created by the same founders behind digital technology and payment processing company Ripple, is a form of cryptocurrency that facilitates exchanges of different currencies on the Ripple network.
XRP has experienced significant growth, rising from $0.006 at the beginning of 2017 to $0.37 as of January 10, 2023. This represents an increase of over 6,000%, making it a promising investment option.
XRP is favored by investors who appreciate the stability and security of a payment processing platform and the potential for growth in the cryptocurrency market.
Cardano (ADA)
Market cap: Over $11 billion
Cardano is a blockchain platform that prioritizes efficiency and environmental sustainability. It uses proof-of-stake validation, which significantly speeds up transaction time and reduces energy usage compared to other proof-of-work platforms like Bitcoin.
Despite modest growth compared to other major cryptocurrencies, Cardano’s ADA token has still seen a substantial increase, rising from a price of $0.02 in 2017 to $0.32 as of January 10, 2023, which represents an increase of nearly 1500% that’s why many believe that Cardano is one of the safest cryptos.
Solana (SOL)
Market cap: Over $33 billion
Solana is a blockchain platform designed to power decentralized finance (DeFi) uses, decentralized apps (dApps), and smart contracts.
It uses a unique hybrid proof-of-stake and a proof-of-history mechanism that provides fast and secure transactions.
The Solana network is powered by its native token, SOL, which has seen significant growth since its launch in 2020, rising from a price of $0.77 to $101 by March 1, 2022, an increase of nearly 13,000%.
Polkadot (DOT)
Market Cap: Over $5 billion
Polkadot (DOT) is a blockchain interoperability protocol that connects different chains, allowing for data exchange and transactions across parallel blockchains while maintaining security.
It was founded in 2016 by Ethereum’s core founder, Gavin Wood, and has the unique characteristic of having no hard limit on its total supply. Polkadot’s price reached its all-time high of $55.11 in May 2021 but experienced a drop to $4 in December 2022.
As of January 10, 2023, it is priced at $5.10, which is still a considerable increase from its launch price. Polkadot’s versatility and ability to connect various blockchains make it an exciting investment opportunity for those seeking exposure to the crypto market’s growth.
Litecoin (LTC)
Market Cap: Over $6 billion
Litecoin (LTC) is a decentralized, open-source blockchain project created in 2011 by Charlie Lee, a former Coinbase software engineer. The project was created as a faster alternative to Bitcoin, with a quicker transaction confirmation time.
Bitcoin heavily influenced the design and code of Litecoin, but with some changes to improve speed and efficiency. Litecoin’s faster transaction time makes it an attractive option for people looking for a safe coin to invest in and send payments worldwide without the need for a middleman.
LTC’s total supply of 84 million tokens is widely regarded as the “silver to Bitcoin’s gold.” The cryptocurrency has seen a growing number of merchants accepting it as a form of payment, and it is currently the 11th-largest cryptocurrency in the world, valued at around $84 per token.
Avalanche (AVAX)
Market Cap: Over $4 billion
AVAX is the native token of the Avalanche blockchain, which supports smart contract functionality and uses the Proof of Stake (PoS) mechanism. This makes it a safe crypto to buy and one of the fastest and most secure smart contract platforms in the DeFi space.
Like Ethereum, Avalanche allows developers to create decentralized applications on its network using the Solidity programming language.
The Avalanche network has a limited supply of 720 million AVAX tokens, with half of them created and distributed at the time of launch in 2020 and the rest to be generated through the minting process as staking rewards.
Additionally, unlike Bitcoin and Ethereum, Avalanche’s transaction fees are burned, adding to the scarcity of AVAX. The AVAX token was priced at around $4.00 when it launched in September 2020 and reached its peak of $134.87 on November 23, 2021. As of January 10, 2023, AVAX is valued at around $15.4.
Dogecoin (DOGE)
Dogecoin is a decentralized, open-source digital currency that was created as a joke by its founders Billy Markus and Jackson Palmer in 2013. Despite its humble beginnings, Dogecoin has gained a large and loyal following, with famous investors such as Elon Musk and Vitalik Buterin sitting on the board of the Doge Foundation.
Dogecoin allows for low-cost peer-to-peer transactions and rewards content creators such as musicians for sharing their work. The currency was created to be as “ridiculous as possible”, with a goofy image of a Shibu Inu as its mascot.
USD Coin (USDC)
USD Coin is a stablecoin launched in 2018 by co-founders Jeremy Allaire and Sean Neville. As its name suggests, it is pegged to the value of the U.S. dollar, with each USD coin in circulation backed by $1 held in reserve.
The currency is issued by regulated financial institutions and is part of the Centre Consortium. USD Coin provides a stable and secure alternative to other cryptocurrencies, making it a safe crypto investment and an attractive option for investors who are looking to avoid the fluctuations commonly associated with digital currencies.
Uniswap (UNI)
Uniswap is an ideal cryptocurrency to buy. A decentralized trading protocol that became popular in recent years for its ability to facilitate automated trading of DeFi tokens. It is an AMM (automated market maker) that aims to improve the efficiency of token trading and provide liquidity where needed.
The automated process of market-making reduces costs and risks for traders. Also, it allows anyone to create a liquidity pool for a pair of crypto tokens without the need for identity requirements.
Uniswap V3 was launched in May 2021 and has been well-received by the trading community, with increasing interest in pairing UNI to AUD and EUR price pairs.
The growth in interest in all forms of trading and investing in cryptocurrencies, combined with increased liquidity, suggests that Uniswap is worth watching in the future, with experts anticipating price will go up to $60 over the next year.
Polygon (MATIC)
Polygon is a user-friendly platform that transforms Ethereum into a multichain system and is backed by popular exchanges such as Coinbase and Binance. The core component of Polygon is its SDK, a modular and flexible framework that supports building multiple applications, such as roll-up chains.
Polygon aims to resolve the scalability problems commonly associated with other cryptocurrencies, with its Plasma framework capable of supporting an unlimited number of decentralized applications on its infrastructure.
Polygon operates as a Layer-2 scaling solution, allowing for faster and more efficient processing of transactions, and currently supports a range of DeFi protocols in the Ethereum ecosystem. The MATIC token is used for payment services on Polygon and runs on the Ethereum blockchain.
In the future, Polygon may extend its support to other base chains, making it interoperable with a wider range of digital currencies.
Bitcoin Cash (BCH)
One of the safest crypto coins, Bitcoin Cash, is a decentralized, open-source digital currency that aims to provide fast, low-cost peer-to-peer transactions. Unlike traditional payment methods, Bitcoin Cash operates without intermediaries such as banks, making it a censorship-resistant form of money.
With a limited supply of 21 million coins, Bitcoin Cash combines scarcity with the ease and freedom of using physical cash. Additionally, its micro fees, fast payment processing, and privacy features make it an attractive option for individuals and businesses.
As a peer-to-peer electronic cash system, Bitcoin Cash allows for direct transfers from one person to another, just like traditional physical cash. It operates on a decentralized network that is independent of control by financial third parties, giving users complete control over their funds.
The Bitcoin Cash network can process transactions at high speeds, with low fees, typically around 1/10th of a cent. This makes it an ideal option for merchants who want to accept payments quickly and easily via computer or smartphone.
8 Factors Affecting Cryptocurrencies
Supply and Demand
The value of cryptocurrency is primarily driven by supply and demand dynamics. A particular token’s price can increase if its demand grows faster than its supply. Some cryptocurrencies, like Bitcoin, have a finite supply cap, with only 21 million Bitcoins in existence.
Other cryptocurrencies, like Ethereum, do not have a set supply cap. The supply of some cryptocurrencies is controlled by governing teams, who can either release more tokens to the public or “burn” existing tokens to manage the money supply.
The demand for a particular cryptocurrency can be influenced by various factors, such as its increasing popularity, growing awareness, and increased utility. When a currency becomes more widely used and gains recognition as a valuable investment, its demand can increase, driving up its price.
Production Cost
New cryptocurrency tokens are generated through a process known as “mining.” Miners use computers to verify the next block on the blockchain. The more competition to mine a specific cryptocurrency, the more difficult it becomes as miners race to solve complex mathematical problems to verify blocks.
This increases the cost of mining, as miners require more powerful computing equipment to be successful. As the cost of mining goes up, the value of the cryptocurrency being mined also increases.
Miners won’t engage in mining activities if the value of the currency they are mining isn’t enough to offset their costs. As long as there is demand for blockchain, the currency’s price will have to increase.
Cryptocurrency Exchanges
Cryptocurrency exchanges typically list the most popular and mainstream tokens, such as Bitcoin and Ethereum, which trade on multiple exchanges. Some smaller tokens, however, may only be available on a few exchanges, which can limit access for investors.
If wallet providers offer cryptocurrency exchange services, they will charge a fee to aggregate quotes across several exchanges, which increases the cost of investing. If a cryptocurrency is thinly traded on a small exchange, the exchange fee may be too high for some investors.
Conversely, if a cryptocurrency is listed on multiple exchanges, it can attract more investors and increase demand, which drives its price.
Competition
There are over 13,000 different cryptocurrencies, with new ones being launched regularly. While launching a new cryptocurrency is relatively easy, it’s more challenging to make it viable, as the currency must build a network of users.
If a cryptocurrency offers a useful application on the blockchain, it can quickly attract a large user base, especially if it improves upon the limitations of existing cryptocurrencies.
When a new competitor gains traction, it can reduce the value of existing cryptocurrencies and increase the value of the new currency.
Internal Governance
A fixed set of rules does not govern cryptocurrency networks. Instead, they are based on the needs of the community they serve. Some cryptocurrencies allow their holders to have a say in how the token is mined or used.
Changes to a token’s governance require consensus among stakeholders. Investors typically prefer stable governance, as it provides more stable pricing. However, the slow process of updating software protocols can limit the value of cryptocurrencies.
If an update unlocks value for cryptocurrency holders but takes a long time to implement, it can negatively impact the current stakeholders.
Regulations
Cryptocurrency is regulated, but governments have not yet developed clear guidelines for regulating this asset class, making it a risky and volatile investment. Products like exchange-traded funds (ETFs) or futures contracts could increase access for investors and drive up their value.
Regulation can also allow investors to bet against the price of cryptocurrencies with futures contracts or options, reducing their price volatility. However, regulation can also negatively impact demand for cryptocurrencies.
If a governing body changes the rules and a cryptocurrency investment falls out of favor or use, it can cause its price to drop.
Node Count
The number of nodes in a cryptocurrency network is a good indicator of its community strength. The higher the number of nodes, the stronger the community and the more likely it is to withstand potential crises.
To find the node count of a specific currency, you can check its home page or do a Google search. By comparing the node count and total market capitalization of a currency with that of a more popular currency, you can gain insight into how node count can influence the price.
Social Media
Social media hype, as well as influential individuals on those platforms, can have a significant impact on the price of a cryptocurrency.
While cryptocurrency exchanges provide information about the blockchain or currency, it’s important to consider other sources of information, as they may not always be accurate.
Nevertheless, they can still affect the volatility of a cryptocurrency’s price. It’s crucial to approach such sources of information with caution and perform thorough research before making any investment decisions.
How to Invest in Cryptocurrency Safely
Investing in cryptocurrency can be risky, and you might ask, “what is the safest way to buy crypto?”. You can take steps to minimize your risk and ensure a safer investment. The following are some tips you can do to safely invest in cryptocurrency.
- When investing in crypto, you must ensure that your device is secure. Public computers and Wi-Fi networks are not always safe, and they can expose you to potential fraud. Using a personal computer and a virtual private network (VPN) can help establish a secure connection and keep your personal financial information safe.
- When choosing a crypto exchange, it’s essential to research and select a reputable one. Consider the cryptocurrencies available, the fees for buying and selling, and the exchange’s track record. Review the exchange’s user terms and agreements to understand where your funds will be kept and what happens if the exchange goes bankrupt. Additionally, read user reviews to see if there are any major red flags to be aware of.
- The way you store your crypto is also an important factor to consider. While keeping your currency in a web-based wallet hosted by your exchange may be convenient, it could lead to potential issues down the line, such as the inability to convert your coins to real cash or in case of an exchange failure. An alternative option is to use a “hardware wallet,” which stores the private key to your cryptocurrency in an offline storage device, providing added security.
- Before investing in cryptocurrency, it’s essential to think carefully about your budget. No matter the type of asset you’re investing in, you need to consider your current financial situation and determine how much you can afford to invest. Never invest more than you can afford to lose, as there are no guarantees in the investing world.
Choose the Safest Cryptocurrency to Invest
Investing in cryptocurrency can be a lucrative opportunity, but it’s essential to choose wisely when it comes to where you place your money. By taking the time to research and understand what makes a coin worth investing, you can rest assured that you’re making secure, confident choices for your portfolio.
Additionally, by diversifying your investments, conducting due diligence, using secure wallets, and regularly monitoring your investments, you can further protect your finances and reap the rewards of your investment. So, choose the safest cryptocurrency to invest in and reap the benefits of this powerful financial opportunity. Take control of your wealth today!
