A look at blue-chip cryptos and NFTs – CNBCTV18 | Jewelry Dukan

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The term “blue chip” is derived from the game of poker. The game has red chips, green chips and blue chips. Of the three, blue chips have the highest value. Therefore, this term was originally used in the 1920s to describe stocks that trade at a higher price than the rest. However, this blue-chip tag now refers to stocks of established companies and institutions that have grown and become mammoths over time. And with the emergence and rapid adoption of digital assets, the term is now being used in cryptocurrency and NFT markets as well.

When it comes to investment advice, people often suggest going for “blue chip” stocks. These are financially and fundamentally sound securities that are often presented as safe investments, especially over the long term.

Now, like many things from traditional finance, this “blue chip” tag and ethos of investing in big projects has trickled down to the cryptocurrency and NFT markets as well. With that in mind, we quickly explained what this blue chip classification means and which projects fall under it. Let’s go!

What are blue chip cryptos and NFTs?

The term “blue chip” is derived from the game of poker. The game has red chips, green chips and blue chips. Of the three, blue chips have the highest value. Therefore, this term was originally used in the 1920s to describe stocks that trade at a higher price than the rest. However, this blue-chip tag now refers to stocks of established companies and institutions that have grown and become mammoths over time.

And with the emergence and rapid adoption of digital assets, the term is now being used in cryptocurrency and NFT markets as well. Blue chip cryptos refer to large tokens that have established themselves as pioneers in the asset class and have solid reputations among their peers. Blue chip NFTs refer to projects whose financial value has been growing steadily over a period of time.

Here are some other factors cryptos/NFTs must meet to qualify as blue chip projects:

• Legacy in the market

• The credibility of the founder(s).

• Institutional support

• High liquidity/interchangeability and market capitalization

• Low volatility

• Degree of decentralization

Now let’s look at some existing blue chip cryptos and NFT projects:

Bitcoin:

Although there are thousands of cryptocurrencies, Bitcoin is usually the first name that pops up when digital assets are mentioned. Bitcoin is the longest surviving cryptocurrency with the highest market cap of 39.6 percent, making it inevitably one of the blue chip projects. Beyond its age, Bitcoin also checks all the boxes on the above list of criteria. Bitcoin is also the most highly correlated with the stock market than any other cryptocurrency and therefore reacts first to larger stock price movements.

Ether:

With a market capitalization of 17.7 percent, Ethereum is the second largest cryptocurrency behind Bitcoin. This second generation cryptocurrency sits at the top of the crypto usage rankings thanks to its novel smart contract system. Several DeFi projects and over 3,000 decentralized applications (dApps) call the Ethereum blockchain their home, which is why it has received significant support from financial institutions. Also, during The Merge, the blockchain has just transitioned from a proof-of-work mechanism to a proof-of-stake mechanism, which positions it perfectly to initiate future savings in transaction costs and gas fees.

Binance Coin:

This is the native cryptocurrency of Binance, the world’s largest crypto exchange by trading volume. It was launched in 2017, making it much younger than Bitcoin and Ethereum. Still, it’s quickly climbed to third place in market cap (4.5 percent). It has multiple use cases and a multinational footprint, making it one of the most sought-after projects in the cryptosphere.

Other blue-chip crypto projects include Ripple (famous for its instant global money transfer capabilities) and Cardano (launched as Ethereum’s rival).

Now let’s dive into blue chip NFTs as well and see what they entail:

Bored Ape Yacht Club (BAYC):

The BAYC is a collection of 10,000 NFTs, each featuring a bored looking monkey with a unique combination of accessories. Created by Yuga Labs, this NFT collection has attracted many prominent investors including Madonna, Justin Bieber, Jimmy Fallon and Post Malone among others. Since then, these NFTs have sold for hundreds of thousands of dollars each, making the entire project worth billions. In March 2022, the total sales volume of the project surpassed the $2 billion mark.

Crypto Punks:

This is the first Ethereum-powered NFT project launched by Larva Labs and remains popular to this day. Launched in 2017, the Crypto Punks collection is as old as the BNB chain. With 10,000 unique characters, this project is said to be the inspiration for all blockchain powered digital art. The total sales of this art collection is $1.08 billion. Some other popular blue-chip NFT projects are Cool Cats, Art Blocks, and Azuki.

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