This article explains the term “blue chip” in the cryptocurrency sphere and helps you find blue chip cryptocurrencies.
If you’ve been reading crypto Twitter or various crypto media outlets and have been confused by the term “blue chip” in the cryptocurrency space, fear not! We will explain exactly what this means right here.
Coming from the legacy finance world, “blue chip” is a term that’s primarily used to describe a stock pertaining to a huge company with a positive established reputation. These companies are usually leaders within their industry, boasting high-quality financials and a history of delivering strong returns to their shareholders. Blue chip stocks are widely acknowledged as safe, long-term bets that make money for people over time, and now we’re lately seeing this term make the jump into the crypto world.
Blue Chip Cryptocurrencies
Now, cryptocurrencies aren’t exactly companies that issue stock, but we can still draw some connective tissue here. “Blue chip cryptocurrencies” are highly established, trusted, and have a large market capitalization — $2 billion or more is a good working figure to determine what is or isn’t a blue chip crypto.
Bitcoin and Ethereum easily fit the bill here. They are two of the oldest and most established cryptocurrencies available on the market today, with market caps that easily clear this $2 billion hurdle. But a cryptocurrency doesn’t have to be “old” within this nascent space in order to be safely considered a blue chip investment. You only need to sort a list of cryptocurrencies by market cap to determine what works as a “blue chip crypto.”
Let’s take a look at the top 15 in this criteria, as ranked by CoinMarketCap.com. Here’s what that list looks like today:
Even the 15th crypto on this list, Litecoin, is still north of $12 billion in total market capitalization. Even though crypto is notorious for its volatility, those who want to play this market with more conservative tactics only need to invest in the biggest individual coins.
It’s worth noting that many stablecoins fall into this blue chip category, which is pretty handy. While stablecoins aren’t subject to price fluctuation, they are an ideal vehicle for cashing in and out of the cryptos that are. You might consider the largest stablecoins, like USDT and USDC, as a kind of “poker chip” for playing the crypto market. They represent stable value, and their blue chip status means they are highly liquid — you can easily and predictably move from these coins to the fiat money that you pay your bill with.
It’s distinctly good news for adoption to see language like “blue chip” popping up in reference to crypto. Where investors used to sweat over safe investment in stocks that yield predictable returns, we’re now seeing this attitude make its way into crypto. Everything old is new again!