By Haddon Libby
Cryptocurrencies, digital assets secured by cryptography and powered by decentralized blockchains, are transforming finance. With a cryptocurrency, a user can complete transactions without government or bank control. Unlike traditional money, the value of a coin stems from its scarcity, utility, and/or market sentiment. Most cryptocurrencies are volatile with steep price swings. All face increased regulatory scrutiny. Bitcoin, Ethereum, Tether, XRP, and Binance Coin lead the crypto market
Stablecoins, a cryptocurrency subset, peg to assets like the U.S. dollar for stability, ideal for trading, liquidity and transactions. Tether and USDC dominate stablecoins.
Unlike fiat currencies like the US Dollar or Japanese Yen, cryptocurrencies operate on blockchains—transparent, immutable ledgers. Bitcoin and Ethereum, for example, fluctuate wildly; Bitcoin hit $119,142.78 in 2025, driven by its 21-million-coin cap, while Ethereum ($4,247.63) powers smart contracts for DeFi (decentralized finance) and NFTs (non-fungible tokens). Stablecoins like Tether (USDT) are pegged at $1 to ensure consistent value. Tether does this by backing each coin with cash or cash-equivalent investments.
The largest cryptocurrency, Bitcoin (BTC), boasts a $2.3 trillion market cap, claiming 55-60% market dominance. Its fixed supply and secure blockchain, untarnished for 16 years, position it as “digital gold,” fueled by adoption via Investment Funds and use in crypto casinos. Speculative hype inflates its value. Ethereum (ETH) ($450 billion) drives DeFi and NFTs via smart contracts, bolstered by Ethereum 2.0’s scalability upgrades, though high fees and rivals like Solana challenge it. XRP ($195 billion), is linked to company, Ripple, excels in cross-border payments. Binance Coin (BNB) ($110 billion) powers Binance’s ecosystem, with token burns (thefts) boosting scarcity, but regulatory limits curb its U.S. reach due to its connection with cross-border money-laundering.
Among stablecoins, Tether (USDT) ($160 billion) leads for its peg to the US dollar and trading dominance, though regular audits of the stablecoins reserves are needed. In contrast, USD Coin (USDC) ($62 billion) is backed by audited cash and Treasuries and is trusted for DeFi and payments via Visa’s network. Ethena USDe (USDe) ($7 billion) uses crypto collateral for high DeFi yields but carries risks related to complex hedging strategies. Dai/Sky Dollar (USDS) ($6 billion), decentralized and crypto-backed, supports DeFi lending but is volatile.
Safety is a concern for all coins. Bitcoin and Ethereum’s decentralized blockchains, using proof-of-work or proof-of-stake, resist attacks, but user errors like wallet hacks persist. Tether, XRP, and BNB, tied to centralized entities, risk manipulation or regulatory action. Volatility plagues BTC, ETH, XRP, and BNB—Bitcoin doubled in 2025, XRP surged rapidly—but Tether’s stability hinges on reserves. The four owners of Tether have resisted full audits. Scams, like fake wallets, target all, making hardware wallets (e.g., Ledger) and two-factor authentication vital.
These assets are traded on major exchanges. With $16 billion in daily volume, Binance is the largest with a 35% market share. Binance offers the five largest coins by market value yet has its operations in the U.S restricted due to its involvement in illegal payments and money laundering. Bybit ($4 billion volume) supports most coins despite a 2025 hack that threatened its solvency as well as the valuation of several coins. Crypto.com ($3.6 billion) appeals to beginners due to ts debit card that converts coins into old-fashioned cash. Coinbase ($2.5 billion) is U.S.-based and beginner-friendly but has higher fees.
Stablecoins face unique risks, such as reserve transparency, bad actors and/or regulatory scrutiny. Unlike the speculative swings of cryptocurrencies, stablecoins are safer for transactions. That said, these networks are susceptible to hacking that will only get worse as quantum computers learn how to beat the encryption technology of all coins.
For those wanting to own coins directly, consider using Coinbase or Crypto.com for ease and regulatory compliance. Bitcoin and Etherium can also be held via Exchange Traded Funds like IBIT and ETHE. Cryptocurrencies and stablecoins offer innovation but demand caution. With any of these, never invest more than you can afford to lose.
Haddon Libby is the Founder and Chief Investment Officer of Fiduciary RIA firm, Winslow Drake. For more information on our services, please visit www.WinslowDrake.com. Please note that this article is for entertainment purposes and not a recommendation to invest in cryptocurrencies or stablecoins.
