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Is cryptocurrency a digital asset?

Digital asset and cryptocurrency. A review by a Bitcoin mixer: mixer.money
Is cryptocurrency a digital asset?

  1. What is an asset
  2. Crypto as a digital asset
  3. What are the dangers of selling cryptocurrency by the bulk of holders?
  4. Decentralization is at the heart of everything
  5. Will the mass adoption of crypto as an asset class spread around the world?

We offer the opinion of experts, who view cryptocurrency as a financial digital asset. Whether or not digital money can really be considered an asset, we are going to find out with Avinash Shekhar, Chief Executive Officer of ZebPay, and Joel John, the head of Ledger Prime.

The logo of the ZebPay cryptocurrency exchange.

What is an asset

Cryptoassets have long been referred to as an asset class. This term designates a financial instrument that has similar standard financial characteristics. Can crypto also be considered an asset class, and in what ways?

Crypto as a digital asset

According to Avinash Shekhar, crypto has all the necessary attributes of a developing asset class. These include the ability to retain the value in space and time for many years and a number of legitimate use cases. He believes the potential for cryptocurrencies is enormous.

Another important characteristic of this asset class is volatility, which is an inherent feature of any growing asset class, as it was previously for oil. Avinash expects the volatility of virtual assets to decline as they strengthen. At the same time, the expert argues that volatility will be unaffected by increased financial literacy among crypto-enthusiasts, increased number of token buyers and traders, or reduced fear of missing out on new opportunities.

According to Avinash, there is no relation between volatility and the decentralization of crypto. He strongly supports the concept of decentralized currencies, because it allows users to exercise power and determine the rules that make crypto the most sought-after and unique asset class. A truly decentralized system reduces the risks of manipulation or abuse. The novelty of this asset class being traded on a 24/7 basis also enhances its appeal.

Joel John also believes that the speculative nature of crypto is related to the fact that this is a new asset class. Still, he is confident that this decentralized digital asset has a self-regulated market, as seen in various countries such as Dubai, or the United States, which have a clear set of rules, with even India steadily catching up.

Chingari, India’s fastest-growing mobile app for short videos

Sumit Ghosh, CEO and co-founder of Chingari comments, “People have shown immense trust in cryptocurrencies in the last couple of years. One of the major things, why people are investing in crypto, is because people are looking for better returns. For example, Bitcoin’s supply will never surpass 21 million, making it a desirable inflation-resistant store of value. When you consider Bitcoin’s current market capitalization, which is over $ 850 billion, it is evident that it is on track to overtake global tech powerhouses like Microsoft in the near future. Because it has opened up new investment opportunities, it should be classified as an asset class.”

How speculative are crypto-assets and what changes are causing volatility?

Joel attributes the current volatility of cryptocurrency to three arguments.

  1. Every new technology goes through a phase of rapid speculation, whether it is shipping routes or the Internet in pursuit of growth and adventure.
  2. India is showing curiosity regarding crypto and considers it to be a potential source of viable income — crypto access is being regulated in this country.
  3. Bitcoin imitates stocks and currencies.

Nevertheless, the ongoing speculation around crypto, despite the strengthening of Bitcoin, can be attributed to its image as a gambling asset, the hunt for economic opportunity, and the wide availability of the Internet. All of this is to be adjusted in time and requires people to be financially literate.

What are the dangers of selling cryptocurrency by the bulk of holders?

A digital asset in Bitcoins or ethers with early investors can cause prices to plummet if they choose to liquidate their holdings. Joel says that crypto assets are mostly concentrated in the hands of early investors who were able to get richer because they reaped incredible dividends from the exponential rise in cryptocurrency prices as the crypto just emerged, with a frenetic demand that followed. Their appetite for high risk helped them keep the hype going for a long time. In this scenario, the sale of large amounts of crypto by the early investors would have little effect on the market, and as for liquidity, this would soon recover.

Decentralization is at the heart of everything

Avinash considers crypto a great asset class, with Bitcoin and Ether serving as a store of value and a reservoir of use cases.

 Digital asset in Bitcoins and Ethers. A review by a Bitcoin mixer: mixer.money

They will keep growing but they have also reached their maturity as a digital asset. For example, Bitcoin has become an asset class because of people looking for long-term profits rather than speculative trading.

It should not be overlooked that the decentralized network is a revolutionary enterprise that may soon overtake social media and other platforms. Avinash emphasizes the fact that DeFi (decentralized finance) is a very important part of the crypto ecosystem, and cryptocurrency is necessary to facilitate DeFi transactions. For example, in the DeFi Compound network, the COMP is a token built on the blockchain of other cryptosystems. Tokens are needed in NFT, Dapps, DeFi lending, and other blockchain products, which make different parts of the same crypto ecosystem.

Will the mass adoption of crypto as an asset class spread around the world?

The rapid growth of crypto indicates further adoption, though with a number of obstacles ahead. Joel says that the first series of change has already occurred. He justifies the inevitable rapid expansion and adoption of cryptocurrencies by referring to today’s indispensable household items such as the refrigerator, television and Internet, which, when just invented, were also considered revolutionary, new-fangled and going against the flow of everyday life.

The mass adoption of cryptography will mean a lot of crypto-transactions without buying tokens or using crypto ATMs. It will entail much more than the transformation of communication technologies and social networks with meta-universes, games, Web 3.0, and regional innovations. He believes the change will happen within 2 years and will attract the younger generation.

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