©Reuters. Attention! What are the crypto whales buying right now?
A thread on social media platform Twitter (NYSE:) analyzed the top 10 cryptocurrency wallets on DeBank. Let’s see what were the key takeaways from the thread and which cryptocurrency whales are actually buying right now.
Stablecoins Most wallets contain stablecoins to trade various digital assets. Unlike most cryptocurrencies, stablecoins are backed by a reserve asset such as gold or the US. A stablecoin is a tokenized version of these underlying assets.
Although it can be used as a means of payment, the extreme price fluctuations make it difficult for it to be widely accepted. There is no point in investing in stablecoins as they are tied to a reserve asset. Instead, you can stake or lend these cryptocurrencies and create a passive income stream.
Fantom Fantom (CRYPO:FTM), a blockchain platform launched in December 2019, runs on a proof-of-stake consensus mechanism. It can execute thousands of transactions per second at a very low cost.
In addition, Fantom is also compatible with Solidity, a programming language used to create smart contracts on (CRYPTO:ETH). At the moment, Fantom is already the sixth largest DeFi platform with $6 billion in total value locked.
Valued at a market cap of $3 billion, the FTM token is down 70% from its all-time high, making it attractive to crypto whales.
Yield Farming Most of the analyzed wallets stake their Ethereum tokens and have large positions in DeFi protocols like Aave, Curve, and Convex, which allows them to generate a passive income stream.
Leveraging your cryptocurrencies through lending protocols can yield generous returns. There are protocols whereby cryptocurrency holders can access the value of their holdings without liquidating their assets through over-collateralized lending.
The interest rate, or annual percentage return, depends on the demand and supply of the underlying digital asset. The protocol portion of the ecosystem is called Anchor, and it offers lenders a 19.5% return.
NFTs Several wallets are also exposed to blue-chip NFTs, or non-fungible tokens. An NFT is created on a blockchain and is used to guarantee ownership of an asset in digital form. A majority of these NFTs have been launched on the Ethereum blockchain.
Here artists can use NFTs and sell their paintings or creations to art collectors. So the owner or creator of the NFT can also earn revenue through royalties if the art is used online. Similar to cryptocurrencies, NFTs are also highly risky as they remain a speculative asset class.
Ethereum Around 60% of the top 10 wallets have exposure to Ethereum, the second largest cryptocurrency by market cap.
Launched in 2015, Ethereum was the first blockchain network to support smart contracts, which are computer programs that run automatically when certain conditions are met. Smart contracts reduce the need for an intermediary, which lowers transaction costs while increasing reliability.
In addition, Ethereum’s blockchain can host other cryptocurrencies, called tokens, via its ERC-20 compatibility standard. This compatibility has been the most common use of the Ethereum blockchain as over 280,000 ERC-20 tokens have already been launched.
The post Attention! What are the crypto whales buying right now? first appeared on The Motley Fool Canada.
Stupid contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Aave, Bitcoin, Ethereum, and Terra. The Motley Fool recommends Twitter.
This article was first published on The Motley Fool
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