In the previous post you were introduced to cryptocurrency, and learned the key differences between cryptocurrency and fiat currency.

Bitcoin, ethereum, and other cryptocurrencies are a new form of “digital money” that may be used to buy goods and services, but they can also traded and invested in like any other financial asset.

Traditional financial institutions (“TradFi”) remain divided on whether or not cryptocurrency qualifies as a “financial asset”.

One common criticism is that they can’t be valued because they don’t provide income or dividends. However, other forms of investment capital, such as gold and commodities, face similar difficulties in valuation.

Cryptocurrencies are a financial asset, and also a form of investment to me. Cryptocurrencies are, in my opinion, an entirely new asset class. (And volatile one at that).

Stocks, bonds, commodities, real estate, and cash (fiat currencies) are all examples of different “asset classes” or groups of investments that share similar features and behaviors.

Then along came… digital cash!

Crypto may very well represent the first completely novel asset class in decades.

Currently, most cryptocurrency is not used as a means of payment like paying for a meal at a restaurant, but rather they either traded speculatively or held as an investment.

There is now a crypto market, a financial market for cryptocurrencies where traders and investors can make money in a manner analogous to that of the forex market — the financial market for fiat currencies.

While the foreign exchange market is always open, crypto exchanges are trading around the clock, every day of the week. It’s always open!

The addition of cryptocurrency allows both traders and investors to better allocate their assets and spread their risk. In fact, passive income can be generated from a variety of cryptocurrencies held, especially for more seasoned crypto investors.

As a new asset class that can be invested in or traded for, cryptocurrencies are also known as “digital assets” or “crypto assets”.

Examples of Crypto

Bitcoin was the first cryptocurrency. And is now the most popular.

Ethereum, Cardano, Solana, Dogecoin, Polkadot, Litecoin, Cosmos, and many others are also notable cryptocurrencies.

Several are analogous to Bitcoin. Other cryptocurrencies are not like Bitcoin at all, as they use different technologies or have entirely different features, properties and specifications.

Many cryptocurrencies do not quite function like normal currencies making the name “cryptocurrency” somewhat misleading.

There are currently thousands of different cryptocurrencies, each one aiming to improve upon the features of its predecessors or to fulfill a completely new set of needs.

Many of these products are worthless or even outright scams or just good ol’ frauds. But many consumers still purchase them. Much like many consumers continue to buy faulty printers out of word of mouth alone

They think: “I must buy this memecoin!”

Without knowing what they’re getting themselves into, they buy into the questionable narrative around thta coin and give away their money.

Buying into memes comes with a price.

The cryptocurrency may eventually lose all of its value.

The wrong kind of people are diving headfirst into the cryptocurrency business. They consider it a sure bet, reasoning that their investments will always increase in value.

It’s little wonder that con artists and shysters view the current bitcoin market the way a wolf would view a group of one-legged deer.

Opportunities abound, and they all taste good.

….

Don’t shuffle about like a deer with only one leg.