Warren Buffett once stated, "Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1." To be sure, Buffett detests cryptocurrencies. However, his two rules are good ones to follow for crypto investors. But the recent cryptocurrency meltdown made doing so next to impossible.
It wasn't entirely impossible to avoid losing money during the massive meltdown, though. Here are two cryptocurrencies that barely budged during the recent crypto crash.
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1. USD Coin
Unsurprisingly, stablecoins held up better than any other cryptocurrencies. USD Coin (USDC +0.01%) stood out as one of the most stable of the stablecoins during the recent turmoil. It's the fourth-largest cryptocurrency with a market cap of nearly $51 billion.
CRYPTO: USDC
Key Data Points
What makes USD Coin so stable? All of its tokens are fully backed by a combination of cash and short-dated U.S. government obligations. This means that the stablecoin is redeemable at any time in U.S. dollars on a one-for-one basis.
It also helps that the organization behind USD Coin, global financial technology company Circle, tries to be transparent. Circle is licensed for transmitting money in 46 U.S. states, Washington, D.C., and Puerto Rico. The company publishes monthly attestation reports created by accounting firm Grant Thornton that detail the reserve balances that back up USD Coin.
Payment processing giant Visa even selected USD Coin as its first cryptocurrency accepted as a settlement option. This move by Visa, announced in March 2021, lends even more credibility to USD Coin.
2. Binance USD
You probably won't be shocked in the least that another top stablecoin barely budged during the crypto crash as well. Binance USD (BUSD 0.12%) remained steady while most digital tokens were plunging. It ranks as the ninth-largest cryptocurrency in the world with its market cap of close to $17.8 billion.
CRYPTO: BUSD
Key Data Points
Similar to USD Coin, Binance USD is backed one-for-one by U.S. dollars. The official website for the stablecoin even refers to it as "digitised [sic] U.S. dollars."
Binance USD was launched in 2019 by Binance, a leading cryptocurrency exchange, and its partner, Paxos, a financial technology company specializing in blockchain solutions. The stablecoin has been approved by the New York State Department of Financial Services. Paxos provides online monthly attestation reports for Binance USD created by accounting firm Withum.
As you'd expect, Binance USD can be traded on Binance's exchange. However, the stablecoin is also supported on more than 20 other cryptocurrency exchanges.
Rule No. 3
If you owned USD Coin or Binance USD, you wouldn't have taken the thrashing that holders of nearly every other cryptocurrency experienced in recent days. On the other hand, you wouldn't have made any money by merely owning the stablecoins.
There is a way to earn money by staking both cryptocurrencies, however. Staking involves committing your tokens to support transaction confirmation by the underlying blockchain.
Currently, annual yields for staking USD Coin are as high as 12%. You can earn as much as 13.3% staking Binance USD. Yields will vary based on the exchange you use and how long you stake your tokens.
Perhaps Warren Buffett needs to add a third rule: Make money while not losing money. In the crypto world, staking USD Coin and Binance USD are arguably two of the best ways to follow this extra rule.
