Here, we have the best cryptocurrency to invest in and especially as a beginner. Starting out as a cryptocurrency investor definitely is not easy.
Many people want to invest in cryptocurrencies, but they don’t know where to start. That are so many cryptocurrencies and ways to buy that it is quite confusing.
Best Cryptocurrency To Invest In
Bitcoin is around since 2011. For the past few years, practically everyone has watched the Bitcoin price head for the stars, and many feel they have missed out on a terrific investment opportunity.
If only they had been an early investor!
Here is the reality of cryptocurrency investing.
Crypto Millionaires Club
Imagine buying Bitcoin when it was $1, and watch it run up to over $60,000.
Many of the alternate coins (ALT coins) to Bitcoin also took off like a rocket with stratospheric prices.
Everyone can imagine this cryptocurrency dream. Cashing out and buying a yacht, a fancy car, a mansion to die for and, vacationing in the best hotels around the World.
Boom To Bust Nightmares
However, there is another side to investing in cryptocurrencies. The reality is that while Bitcoin went up over $60,000 USD, it is now back down to approximately $23,000 at the time of writing.
All the best ALT coins such as Ether, Litecoin, Dogecoin, Monero etc., have had dramatic price drops too.
Cryptocurrencies Gone Bad
Since 2011, there have been hundreds of cryptocurrencies, which have gone bust, either through no one buying those coins, outright scams, or bad project development. Many cryptocurrency projects were simply abandoned.
Each time, investors have been badly burned.
Stolen Cryptocurrencies From Exchanges
Imagine watching the price of your Bitcoins or ALT coins heading towards the moon.
Then you read that the Exchange where your cryptos are stored, has been hacked and tens of thousands of cryptos has been stolen.
I will describe how it feels.
A feeling of utter terror reaches into your stomach and through your whole body.
You log into your crypto exchange account, and there is nothing left. You run to the bathroom and throw up.
This is the reality for many crypto investors since 2011. From being a millionaire to bust in seconds.
There have been many cryptocurrency exchanges hacked into. Here are just a few of the major Cryptocurrency Exchange hacks in recent years.
- Coincheck – In January 2018, hackers broke in, and stole cryptos worth $534 million
- Coinbene – In March 2019, cybercriminals broke in, and stole over $105 million in cryptocurrencies
- KuCoin – In September 2020, criminals managed to steal over $281 million worth of crypto coins and tokens.
Bad Software Leaving Open Doors
In simple terms, cryptocurrency and blockchain technology is mainly about software development and cryptography. The data and product is also stored in various places whether on computers, servers or in Data Centers etc.
Each blockchain, protocol, cryptocurrency coin, token, wallet, exchange etc., is developed using various programming languages and develop tools. Every product will have new product development improvements.
Many times, when a new product improvement update is pushed out, there can be bugs in the code, which leave the product vulnerable to hackers or bad actors.
Unfortunately, we have witnessed many development disasters resulting in cryptocurrencies being stolen.
Nerves Of Steel
When you look at the ups and downs of cryptocurrency prices, the scams and the hacks, you really do need nerves of steal.
Or invest the smart and safe way.
Best Cryptocurrency To Invest In For Beginners
To ease your way into the world of cryptocurrency, you need to choose a cryptocurrency that is stable, and at the same time, allow you to earn some nice interest along the way.
Introducing Stablecoin Cryptocurrencies
Stablecoins are a particular group of cryptocurrencies. Their value is always pegged, to another currency, asset, commodity or financial instrument.
Many stablecoins are pegged to the US Dollar. Others are pegged to the British Pound, and the Euro currency.
With stablecoins, the coin or token is matched with a 1 to 1 conversion to the fiat currency.
How Are Stablecoins Backed?
There are a number of ways, that stablecoins stay pegged to the US Dollar or other currency.
Fiat Backed Stablecoins
A fiat backed stablecoin keeps prices level by storing fiat currencies, backing each coin on a one to one basis.
The largest of these is Tether, with a market capitalization of over $60 billion at the time of writing.
Now, Tether claim to be backed fully with US dollars, meaning 1 Tether stablecoin is equal to 1 US Dollar.
A recent report of Tether’s holdings in June 2022 confirmed that Tether had $66.4 billion in assets, with $28.8 billion in Treasury bills, $6.8 billion in money market funds, $5.4 billion in cash and some small holdings.
Along with the above, there was an in additional 8.5 billion US dollars in commercial paper, which is an unsecured form of promissory note, that pays a fixed rate of interest.
Asset Backed Stablecoins
An asset backed stablecoin is similar to a fiat backed one, except that it holds physical assets. For example gold or other commodities. However, assets can also be collateral based assets such as property.
These are pretty complex stablecoins, which use algorithms and smart contracts to protect price stability, by increasing or decreasing supply, using market forces to maintain a level price.
Crypto Backed Stablecoins
Crypto collateralized stablecoins are backed by a basket of one or more other cryptocurrencies. The cryptocurrency market, can be vert volatile with large swings in prices, both up and down. This can make the 1 to 1 pegging quite difficulty using cryptocurrencies as a backing for the stablecoin.
Some stablecoins are a risky investment and a few have become total failures. This is generally because, they are not backed by secure funding whether currency or assets.
A big stablecoin failure happened earlier in 2022.
The Terra UST lost its peg to the USD. Then panic set in. Some investors got out quick. Others were too slow to get out in while the stablecoin crashed to practically zero.
What a nightmare!
Terra UST was an algorithm based stablecoin. They are complex and risky. Here is an explanation on what happened with Terra UST
USDP Pax Dollar Stablecoin
USDP is a cryptocurrency from the Paxos Trust Company. This stablecoin uses the Ethereum blockchain.
Every USDP token is pegged to the US dollar, which means the USDP price consistently remains around the $1 level, unlike more volatile cryptocurrencies whose prices rise and fall frequently.
According to the Paxos website, USDP is subject to strict regulatory oversight by the New York State Department of Financial Services, and it meets the highest standards of consumer protection.
Also, very importantly, USDP reserves are held in cash and cash equivalents. This means that customer funds should be safe and available for redemption.
The Paxos USDP home page for more information.
Here is a terrific discussion on the various types of stablecoins and why the Paxos USDP is the future of stablecoin.
Wallets To Secure USDP Stablecoins
Now, if you only want to purchase USDP stablecoins, without investing them to earn interest, they can be secured in a software or hardware wallet.
Hardware wallets allow cryptocurrencies including stablecoins to be stored off the internet.
Best Cryptocurrency To Invest In To Earn Interest
Now, before I go any further, I need to be clear regarding investment advice.
Independent Investment Advice
My strongest advice is that the information, which I provide here should not be taken as financial advise. It is important that you complete your own independent research on the information which I provide, and also to speak with your own financial advisor.
How To Earn Interest On USDP
In the Crypto decentralized finance (DeFi) World, there are many exchanges, which offer interest on your cryptocurrency. When you visit a crypto exchange website, look for the “Earn” or “Staking” menu.
The interest rates on offer are a lot better than your normal bricks and mortar banks, where zero to 1% interest rate is normal now.
Cryptocurrencies Earn APY Interest Rates
Many cryptocurrency earning or staking accounts pay compounding APY interest rates instead of APR.
- APY stands for annual percentage yield, which is based on the compound investment.
- APY is more profitable than APR since it includes interest on interest, and not only interest on the initial investment.
7.5% Interest On USDP With ABRA Interest Earning Account
ABRA operate a very easy to use app, which allow users to buy, sell, trade and earn interest on cryptocurrencies.
At the time of writing, ABRA are offering 7.5% APY interest on USDP.
ABRA was launched in March 2015, so it is pretty well established in the World of cryptocurrency DeFi.
Visit the ABRA home page to research more on this offer.
8% Interest On USDP With Nexo Interest Earning Account
Since 2018, Nexo has been providing FinTech operations to millions of users worldwide to borrow, earn, and exchange cryptocurrencies.
At the time of writing, Nexo are offering 8% APY on USDP with their interest earning account.
Now, with Nexo, you can receive higher interest earnings if you purchase a certain amount of their Nexo token.
However, Nexo is a cryptocurrency whose value goes up and down. Therefore your interest earn could be meaningless if their Nexo token went down in value from the price you paid for the token.
Likewise if the Nexo token crypto coin goes up in value, then you are also gaining in 2 ways. You would earn interest on the USDP and the Nexo token coin would go up in value.
From around May 2022, to the time of writing, cryptocurrencies have experienced a large sell off. This would include the Nexo token.
So, the best option is just to take the straight forward interest rate on USDP, without buying their Nexo token.
Visit the Nexo Earn interest page for more information.
Both ABRA and Nexo are leaders in the field of cryptocurrency trading, borrowing, earning and decentralized finance.
Now, these are just 2 cryptocurrency earnings accounts, which allow you to earn interest on your USDP savings.
There are many other stablecoins where you can earning interest.
However, USDP is a properly backed stablecoin, which you can enjoy earning a nice interest.
What Are The Potential Risks?
Investing your money always has risks. Even keeping your money in a regular bank account has risks as the financial institution can go bankrupt. Keeping your money at home also has risks.
Owning USDP and investing it through an earnings account also has risks.
For example, interest rates can go up or down so you may not receive the same interest rate forever.
The financial institutions where you are earning interest on your USDP could get into financial difficulties, stop withdrawals and even go bankrupt.
Other Cryptocurrency Investment Risks
When you start researching and investing in cryptocurrencies, you will come across a lot of new investment strategies, many of which you will not understand.
Stay away from any of these until you understand how they work. Also, if it sounds too good to be true, then it probably is.
Learn as much as you can and keep up to date with the latest cryptocurrency blockchain news.
Dipping Your Toe Nicely Into Cryptocurrency
There are risks to any investment. Smart people minimize those risks.
With USDP stablecoin, you have a coin, which is backed 1 to 1 with the US dollar.
This is very good especially if you live in a country, where your currency is getting weaker through Government economic mismanagement.
With ABRA or Nexo account, there are very nice compounding interest rates on offer.
This is especially good now that we are living in times of higher inflation. Both of these companies have very good backing and well known in the industry.
Overall, you should only invest a small portion of your savings into cryptocurrencies and especially in the beginning.
I will leave you with one last video where the CEO and Co-Founder of Paxos, Chad Cascarilla is being interviewed.