Crypto-assets attract the attention of the media, the public, central banks and governments. There are many types of crypto assets with various goals, such as establishing payment privacy or decentralizing centralized services and authorities.
Crypto-assets consist of not only decentralized cryptocurrencies but also digital goods, commodities and other services that combine the market and the technology. Crypto coins are tokenized assets that operate by blockchain. The crypto-asset class has the potential to change the economic aspects of numerous industries.
The largest crypto assets are Bitcoin, Ripple and Ethereum’s Ether. However, they are not the only ones. Since crypto-assets offer big financial opportunities, investors seek for more promising ones such as cardano, bluecoin, to diversify their portfolios.
There are over 4000 crypto-assets in the world now. Yet they can be broken down into three categories. These categories will also most likely change as the industry is still in the development stage.
Types of Crypto-assets.
- Cryptocurrencies: Cryptocurrencies realize three main functions. They are a unit of account, means of exchange, storage of value. Consequently, they are used for purchasing goods or storing money for further purchases or as investment tools. Some famous cryptocurrencies are Bitcoin (BTC), Litecoin (BTC) and Bitcoin Cash (BCH).
- Crypto tokens: These crypto-assets are digital services provided by the blockchain system. Tokens involve social webs, media, games as well as secured assets that are based on the blockchain technology. Asset tokens are used for earning streams, companies, interest payments. Examples of crypto tokens are Tend, Steem, Maecenas.
- Cryptocommodities: Digital commodities are provided by the blockchain system. For example, computer power, network, and store capacity are considered commodity assets. These commodities can serve required functions but in the form of tokens. Examples of cryptocommodity type are IOTA, Ether, Filecoin.
Benefits of Crypto-assets:
Crypto-assets are believed to be a smart addition to investment funds, as they possess the following features.
- Assets consist of cash, stocks, bonds, and alternative investments.
- Since crypto-assets are digital native tokens, some of their advantages are that they are highly liquid and have large trading volumes.
- They are an inseparable part of this new technology which is very promising and offers exceptional opportunities for investors.
- Assets that are independent of traditional markets can reduce total portfolio risks. Assets like Bitcoin or Ether have no connection with other markets.
Yet, Ethereum is more than a cryptocurrency platform it also enables the creation of smart contracts just like the Stellar network. To find out more about the features of the Stellar system stay on top of xlm news.
Importance for investors.
It is important for investors to research every asset and its peculiarities. They also need to monitor their holdings and a great and easy way to do so is using a crypto checker. To learn how to use this tool efficiently you can check out this useful cryptocurrency portfolio tracker guide.
To summarize, using multiple crypto-assets is likely to reduce volatility. At the same time, it will improve your profits. Investors can easily include crypto assets into diversified portfolios, and even a small distribution can have an obvious positive influence on portfolio quality.