The crypto investing space is rapidly changing. Impacts of Russia’s invasion of Ukraine are rippling across both Wall Street and the digital currency industry. Of course, the tension is only building on an existing bearishness that saturates cryptocurrency and other high-risk investments. Now, investors are looking for safe cryptos to buy in the wake of the news, and they might not be sure of where to look.
As I reported earlier this morning, both tech stocks and cryptos are being rocked by Russia. The fear from the invasion is causing a flight of money from crypto exchanges, to the tune of nearly a quarter of a billion dollars. The result is a quickly depleting market capitalization of the industry. This in itself is rocking crypto prices, sending nearly every coin and token plummeting 5%, 10%, even 20% in a single 24-hour period. However, it also compounds on issues stateside, where the Fed is not looking to budge on its interest rate hikes, even in the midst of the conflict and its effect on the stock market.
The Fed and the militarized disputes are serving as a one-two punch to the digital asset class. Investors are feeling the heat, and as a result, they are looking for risk-off investments to save their money in anticipation of the worst. Unfortunately, many of these investors don’t see refuge in any cryptos; however, they should.
Luckily, there are several options for storing one’s fiat in digital currency. In fact, there are even ways to take those store of value investments and actually leverage them for passive income. Let’s take a look at three:
- TerraUSD (UST-USD)
- Paxos Gold (PAXG-USD)
- Bitcoin (BTC-USD)
Safe Cryptos to Buy Now: TerraUSD (UST-USD)
TerraUSD is one of the top stablecoins on the market, boasting a market cap of over $12 billion. Yes, the coin is one of the best safe cryptos to buy for investors who are looking to find refuge in an inflation-resistant coin; but, what really makes UST appealing is its relationship with Terra (LUNA-USD) and its role in the Anchor Protocol (ANC-USD) — the only two of the top 100 cryptocurrencies posting gains on the week.
UST is different from other stablecoins in that its value isn’t tied to a reserve of USD; rather, the $1-pegged UST keeps its value through its supply’s linkage with the supply of LUNA. When UST’s price falls below $1, UST holders can mint LUNA by burning their UST holdings. This earns holders LUNA coins and decreases UST supply while also pushing prices back up. Likewise, if UST surpasses $1, LUNA holders can burn their coins and mint UST to the opposite effect. If this doesn’t sound like a very sound way of holding the stablecoin’s peg, fear not; the Luna Foundation Guard, a decentralized autonomous organization (DAO) that oversees the Terra ecosystem, just raised $1 billion dedicated to financing a reserve for UST.
Its linkage to LUNA is an appealing feature, especially considering how LUNA has been able to weather through today’s volatility. The coin is one of the only cryptos that’s posting a positive seven-day average. Another crypto faring well through the turmoil is the Anchor Protocol, a DeFi platform that also happens to be closely linked to UST. Using Anchor, one can stake their UST at an astonishingly consistent annual percentage yield (APY) of 20%. This return is one of the largest available, and the fact that it does not ebb and flow like other DeFi platforms is a huge added plus.
Paxos Gold (PAXG-USD) Leads Increasingly Popular Gold-Backed Crypto Class
Gold-backed cryptos are certainly a small niche of the wider crypto industry. And yet, with everything going on around the world, they are rapidly becoming a favorite refuge for risk-averse investors. Those that don’t want to pull their funds out of digital assets can use these cryptos to expose themselves to more safe purchases. Paxos Gold is one of the largest and one of investors’ favorite safe cryptos to buy.
Paxos Gold is a token by stablecoin project Paxos; PAXG’s price is linked with that of one ounce of London Good Delivery gold. Paxos acts as a custodian for its investors, holding reserves of gold in Brink’s vaults. Every ounce of this reserve is serialized and linked specifically with each token. The result is that investors can actually track down their exact gold holding by linking their crypto wallet full of PAXG on the Paxos website. The assets are also instantly redeemable, meaning one can swap their PAXG one-to-one for the physical gold if desired.
So, by investing in PAXG, one gets all of the benefits of the historically sound gold commodity. But, it also provides holders with the added bonus of DeFi capabilities. Where one can’t really do much with their gold holdings, they can take their PAXG tokens and stake them for passive income, making them effectively better than gold itself. Centralized finance (cefi) platforms like Gemini, Nexo and the Celsius Network allow one to stake their holdings for annual percentage rates (APRs) of up to 6%.
Safe Cryptos to Buy: Bitcoin (BTC-USD)
When it comes to buy-it-and-forget-it cryptocurrencies, Bitcoin is the standard. For nearly a decade, crypto savants have been buying the crypto and holding in anticipation of prices beyond one’s wildest imagination. Of course, the crypto has certainly delivered on its “millionaire-maker” reputation, rising from pocket change valuations to an all-time high near $70,000.
So, why buy Bitcoin now? Well, as this afternoon is demonstrating, it still is one of the best store of value plays, thanks to its monolithic stature. Indeed, the coin did fall 10% to start the day; this is thanks in huge part to the Russia-Ukraine conflict and resulting panic. But fast forward a few hours, and the coin is now posting a 2% gain on the day. It’s one of the only cryptos to fully recover from the flash crash. This is thanks in huge part to its market cap. With $725 billion to its name, Bitcoin possesses about half of the entire crypto market capitalization of $1.5 trillion.
This conflict will not keep Bitcoin permanently down, nor will almost any other market turbulence. It is beyond huge, and it can survive volatility in a way the no other crypto can. That’s because there’s no fear of that market cap hitting $0 like there is with almost every other project.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
