Blue-Chip Token | Binance Academy

Blue-Chip Token

Intermediate

Oliver Gingold, an employee of Dow Jones, first used the term “blue chip” in 1923 to describe stocks that traded at $200 or more per share. The term originated from the color scheme of poker chips: among blue, white, and red chips, the blue chips had the greatest value. Today, blue-chip stocks aren't necessarily just expensive stocks. Rather, they are shares of companies that are widely believed to be high-quality, having withstood the tests of time and proven their financial health.

Similarly, certain cryptocurrencies have formed strong reputations throughout the short yet eventful history of the digital asset industry. Assets that are most commonly included into this category are bitcoin (BTC) and ether (ETH). Blue-chip cryptos have the biggest appeal for risk-averse investors, especially those looking to enter the space. Some benefits that blue-chip cryptos offer are:

Large market cap (usually more than $50 billion)
High liquidity
Lower volatility compared to many other digital assets
Institutional adoption

That said, blue-chip tokens are not immune to the market’s inherent volatility. Still, normally these coins do not lose as much value as most other cryptocurrencies when the digital asset market goes down.

However, neither prominence nor reputation can guarantee any future returns. Thus, it is important to always do your own due diligence and keep track of news pertaining to the industry to make informed decisions.

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