What is a safe cryptocurrency? Well, it depends.

Read on to see a couple of answers to that question based on different world views and investment goals. In the end, only you can decide which approach is the closest match to your own point of view. That being said, almost everyone can find a safe haven in the stormy crypto market.

Stablecoins

Theoretically, a robust stablecoin should be about as safe as a stack of ordinary dollar bills. They are designed to match the value of a fiat currency, typically the U.S. dollar or the euro, within a small margin of error. These tokens serve as digital motor oil for the financial systems of crypto-trading exchanges and services.

Converting monetary value from one cryptocurrency to another, or between the worlds of fiat and crypto, can be costly and slow when actual dollars and cents are involved. Translating the money flow into a handy stablecoin can achieve the same effect with lower costs and quicker execution.

To give investors a reason to fund this nifty tool, stablecoins may come with perks. For example, the popular stablecoin Tether carries solid interest rates when held on crypto platforms such as Crypto.com or CakeDeFi. Widely supported stablecoins like Tether and USD Coin can also be effective payment tools, given their stable valuations and low transaction fees.

In general, actively owning stablecoins may be your style if you also like to hold lots of cash in savings accounts, certificates of deposit, and other ultra-stable value stores. Just make sure your chosen coin is backed by robust collateral and managed by a solid organization.

Bitcoin

You may have heard of Michael Saylor, who currently serves as the executive chairman of data analytics company MicroStrategy (MSTR -1.11%).

Under Saylor's hand, MicroStrategy has converted all its cash reserves into Bitcoin (BTC -0.46%), adding more of the leading cryptocurrency through many different funding sources. The company pours cash flows from the software business into more Bitcoin, along with fresh debt and money raised by selling stock on the open market.

By the latest available count, MicroStrategy managed 132,500 Bitcoins, currently worth approximately $3.1 billion. It's one of the largest Bitcoin collections in the world, beaten only by countries like China and the Grayscale Bitcoin Trust mutual fund.

In Saylor's opinion, Bitcoin is the only cryptocurrency that can replace traditional currencies and gold as a global type of money. From this point of view, Bitcoin looks like the only safe and stable value store on the market today. As Bitcoin evolves into that worldwide money system, every other currency will lose value by comparison. As the dollar falls, so will the dollar-rated stablecoins. Therefore, a Bitcoin "maximalist" such as Michael Saylor would argue that Bitcoin is the only truly stable investment today.

This is, of course, an extreme opinion, and there is no special magic that guarantees Bitcoin's special place in the crypto universe. Better tools may come along, someone could find ways around Bitcoin's encryption layers, governments might put a heavy regulatory thumb on the leading crypto name, and so forth. I'm not saying that any or all of these risks will materialize, but I do recommend approaching Bitcoin (and all investments) more cautiously than Michael Saylor has shown.

A diverse crypto portfolio

Betting the farm on Tether, Bitcoin, or any other cryptocurrency is a risky strategy.

Here at The Motley Fool, we recommend building a diverse portfolio with at least a couple dozen stocks, addressing various markets and business models. You don't want to be left holding the bag if your only stock takes a dark turn.

The crypto market is no different, except that it has fewer robust names available, and it takes fewer cryptos to build a properly diversified portfolio.

So start with a foundation of Bitcoin and stablecoins, augmented by some smart contract platforms, cross-chain protocols, and specialized Web3 tokens. Have some fun with it and take a few risks. Some of the extra altcoins may fail, but others could very well pop instead, more than making up for the losing bets.

This approach makes sense to me, and I currently own more than a dozen cryptocurrencies. Bitcoin is my largest crypto holding, tightly followed by Ethereum, Ripple, and Polkadot. These are the tickers I expect to find their sea legs and beat the broader crypto market over the next decade or so. Nothing is guaranteed, and I may be wrong, but that's why I've injected smaller investments into a bunch of promising cryptocurrencies.

The other names are more speculative ideas that may or not work out in the long run. The law of averages suggests that a couple of them should rise to the challenge and make me some money. To me, that's how you build a risk-averse crypto collection.